The Galactica Star’s owner is Kolawole Aluko, a petroleum and aviation mogul who is one of four defendants accused of helping to cheat Nigeria out of nearly $1.8 billion owed to the government on massive sales of oil.
In a separate investigation, Nigerian authorities are also reportedly probing whether Mr. Aluko helped smuggle millions of dollars out of the country as kickbacks to Nigeria’s former petroleum minister, Diezani Alison-Madueke.
Mr. Aluko is part of a constellation of Nigerian oil executives, state governors, cabinet ministers, military officials and tribal chiefs within the Panama Papers. Mossack Fonseca, a Panama-headquartered law firm with offices around the world, worked for three former Nigerian oil ministers who used companies to buy boats and homes in London, the records show.
The prevalence of Nigerians within the Panama Papers may be no coincidence. Nigeria loses more money from illicit activity, including graft and corporate tax abuse than any other African nation, research by anti-corruption groups indicates. As much as 12 percent of Nigeria’s annual gross domestic product is lost to illicit financial flows, according to Oxfam.
“Our firm, like many firms, provides worldwide registered agent services for our professional clients (e.g., lawyers, banks, and trusts) who are intermediaries,” Mossack Fonseca told ICIJ. “As a registered agent we merely help incorporate companies, and before we agree to work with a client in any way, we conduct a thorough due-diligence process, one that in every case meets and quite often exceeds all relevant local rules, regulations, and standards to which we and others are bound.”
Mossack Fonseca declined to answer specific questions and said, in providing its services, “we follow both the letter and spirit of the law. Because we do, we have not once in nearly 40 years of operation been charged with criminal wrongdoing.”
In October 2015, London police questioned Mrs. Alison-Madueke, Nigeria’s oil minister from 2010 to 2015, as part of investigations into allegations of bribery and money laundering. The investigations are ongoing. The ex-minister, who graduated with an architecture degree from Howard University in Washington, D.C., in 1992, is in London undergoing cancer treatment, her lawyers said.
Media reports have described Mr. Aluko as a key ally to Mrs. Alison-Madueke, a relationship both have previously denied. He rose to prominence around 2011 when Nigeria’s government awarded two companies he founded or owned valuable oil blocks on a no-bid basis. One of his companies, Atlantic Energy, was created the day before it inked the deals to acquire multimillion-dollar oil licenses.
Mr. Aluko is part of a circle of oil traders who are the subject of frequent media speculation in Nigeria. His lifestyle has earned him the reputation of being Nigeria’s playboy. He bought an apartment in Manhattan for $8.6 million and, according to The New York Times, paid more than $70 million to buy four homes in Santa Barbara and Beverly Hills.
The Nigerian government won a court order in May freezing assets linked to Mr. Aluko, two companies he directed and one of his business partners. The Lagos High Court order listed Mr. Aluko’s yacht along with property in London, four homes in California, two penthouses in Manhattan, one in Dubai, 132 houses and apartments in Nigeria and land in Canada and Switzerland. The court also ordered Mr. Aluko not to sell or dispose of more than $67 million in four bank accounts in London and Switzerland, an assortment of watches, a 58-car collection, and three airplanes.
Through a representative, Mr. Aluko told ICIJ that “I have never been prosecuted and convicted in any country. I am aware that a criminal investigation was started in the UK. However, to date, I have not been made aware of any law enforcement action to be undertaken against me.”
Aluko told ICIJ that the information relating to the award of oil contracts to his company was “misguided” speculation.
“As a private citizen, I organise my business and family matters to maximise convenience, as well as operational and administrative efficiency. My companies operate in accordance with the laws and regulations of the relevant jurisdictions and, insofar tax liabilities arise, they pay taxes in the jurisdictions in which taxes are due to be paid.”
Criminal charges for alleged crude oil fraud against Mr. Aluko were dropped in June as a result, according to media reports, of authorities’ inability to locate and serve the Swiss resident.
ICIJ was unable to reach a lawyer or representative of Mrs. Alison-Madueke.
News reports in Nigeria and Britain indicate that the U.S. Federal Bureau of Investigation, the U.K.’s National Crime Agency, and Switzerland’s Attorney General are investigating Mr. Aluko for his role in companies and transactions that were allegedly used to conceal Mrs. Alison-Madueke’s transfer of wealth outside Nigeria.
Switzerland’s Office of the Attorney General confirmed to ICIJ that it had received a request from the United Kingdom in relation to Mr. Aluko. U.K. authorities and the FBI did not confirm or deny the existence of an investigation.
Mossack Fonseca’s internal records show that Mr. Aluko owned four companies in the British Virgin Islands, one of the world’s busiest offshore havens. He was director of another, Fragola Ltd, in the Seychelles. In May 2013, Mr. Aluko paid $11.05 million to buy Almaty United Investors Limited, a BVI company that owned property in Dubai.
One of Aluko’s companies, Earnshaw Associates Limited, was directed on paper by a succession of three companies in Nevis, Switzerland and the BVI, financial hubs prized for their secrecy. The company was incorporated three weeks after Mrs. Alison-Madueke was appointed to head the Ministry of Petroleum Resources in April 2010.
In March 2014, Earnshaw Associates registered a Bombardier Global Express jet in Malta, according to documents sent through Mossack Fonseca. The 18-seat Bombardier is the same model of aircraft that Nigerian media reported Mrs. Alison-Madueke used during her time in office.
Oil Chief
Long before Mr. Aluko, Mossack Fonseca had faced questions about its Nigerian customers. In 2007, when the firm’s employees realized that an offshore company was being used by a former advisor to Olusegun Obasanjo, Nigeria’s president from 1999 to 2007, Jürgen Mossack reminded his staff that “in this firm, everyone knows that dealing with Nigerians always gives you headaches. It’s inevitable that this case involves a crime or fraud.”
Other suspect Nigerian deals seemed to have passed unnoticed.
One crude oil sale contract between three offshore companies, for example, provided for commissions so high that, one expert consulted by ICIJ said, the most obvious explanation is that the oil was stolen. Another file is a $12 million loan from a shell company to a Nigerian typed on half a sheet of paper.
“I had to sign dozens of pages of paperwork for my home loan,” said Aaron Sayne, a financial crimes lawyer and expert witness in dozens of oil fraud cases in Nigeria, after looking at the document. “And my home certainly isn’t worth $12 million.”
[160725-nigeria-06] In 1995 – 15 years before Mrs. Alison-Madueke became Nigeria’s first female petroleum minister – Dan Etete was sworn into the same office.
Mr. Etete, a mustachioed power-player from the oil-rich Bayelsa State, served as oil minister until 1998. His tenure became the subject of investigations after he left office. He was convicted in France of money laundering, and authorities in three countries continue to examine allegations that portions of a billion-dollar oil deal involving a company linked to Mr. Etete were transferred or pocketed as bribes by political figures and middlemen.
The Panama Papers reveal that Mr. Etete and the company, Malabu Oil & Gas Limited, signed a consultancy agreement with an offshore company created by Mossack Fonseca to negotiate the sale of oil blocks to China, a deal that never proceeded. Others documents appeared under Etete’s reported alias, Omoni Amafegha. Amafegha’s company, Pentrade Securities Inc., featured the signature of Richard Granier-Deferre, a French oil trader who was fined approximately $200,000 in 2007 by a Paris court as an accessory to Mr. Etete’s money laundering. The company was incorporated in 1998 when Mr. Etete was oil minister and opened a bank account in Gibraltar. Mr. Amafegha also owned Henkel Investments Ltd, which bought a boat in January 1998.
Mr. Etete denied using Amafegha as an alias and said he had never heard of Pentrade Securities Inc. or Henkel Investments. He denied owning or having owned Malabu. “It’s all just enemies that created this misinformation,” said Mr. Etete.
“I have nothing to do with any Panamanian companies,” Mr. Etete told ICIJ. “I have never been there or sent anyone there to open an account.”
The fall
At his peak, the oil magnate and luxury yacht owner Mr. Aluko was a globetrotter whose round face regularly graced celebrity Instagram pages and entertainment tabloids. When he was spotted in Paris in October 2013, Nigerian media thrilled at the suggestion he was dating supermodel Naomi Campbell. That same year, he launched a $500 million infrastructure development fund alongside Hollywood actor Jamie Foxx and partied in New York City at Leonardo DiCaprio’s 39th birthday bash. He was snapped at the side of rapper P Diddy in Ibiza, Spain, the following summer. The music star tweeted a photo of himself alongside a smiling Mr. Aluko with the caption “NIGERIA I LOVE YOU.” [160725-nigeria-05]
At the same time, tongues wagged back home. Mr. Aluko was regularly cited in Nigerian media as one of “the minister’s men,” a clique of Nigerian oil traders who had burst onto the scene and secured a string of oil licenses from Minister Alison-Madueke’s office with startling ease. In 2011 and 2012, Aluko’s Atlantic Energy, which boasted of “strong government relationships,” grabbed eight crude oil licenses in the Western Niger Delta. Atlantic sent tens of millions of dollars of crude oil to Italy, the United States, Germany, the Netherlands and elsewhere throughout 2012 and 2013, according to documents seen by ICIJ.
In September 2014, however, rumours floated in Nigerian media suggesting that Mr. Aluko and his companies had fallen out of favour with Mrs. Alison-Madueke. By September, Atlantic defaulted on its loans and owed Nigeria $1.3 billion in cash and other obligations. The Nigerian government and banks sent out confidential pleas to would-be angel investors in the hope they would be willing to step in with $700 million and fill the hole left by Atlantic’s bankruptcy.
Two months later, Mossack Fonseca employees doing a routine background check on Mr. Aluko discovered online news articles claiming that Nigerian authorities might ask Interpol, the world’s police body, to help extradite the magnate. Interpol has denied it ever sought the Nigerian. And while the Internet chatter was enough to spook some of Mossack Fonseca’s employees, the firm remained at Mr. Aluko’s service.
It wasn’t until June 2015 that Mossack Fonseca took a second look at Aluko after it received a demand from the British Virgin Islands Financial Investigation Agency to produce documents about Earnshaw Associates.
Mossack Fonseca told BVI authorities that “we do not have information about any bank accounts or assets held by” Earnshaw, despite having signed documents more than a year earlier to help Mr. Aluko’s company register a private jet.
In August 2015, the situation grew worse when the law firm realized it had no contact or personal documentation for Mr. Aluko. One Mossack Fonseca employee worried that this was a potential breach of the BVI’s requirement that offshore middlemen keep such information for at least five years after a company is mothballed.
An employee sought help from Mr. Aluko’s Swiss wealth manager, Johnnie Ebo Quaicoe, and shared links to four unflattering online news articles.
“I’m dumbfounded that Mossack Fonseca will print excerpts from tabloids,” Mr. Quaicoe wrote from Geneva.
“If Mr. Aluko is truly a wanted person,” Mr. Quaicoe chided Mossack Fonseca, “he would not be difficult to find because he is a resident in Switzerland.” Swatting the concerns aside, Mr. Quaicoe instead asked Mossack Fonseca to assist with a “major” $30 million mortgage with a Luxembourg bank. The loan was to be provided by Banque Havilland S.A. The collateral securing the loan would include the Galactica Star, the boat that Beyoncé and Jay-Z had rented for their Mediterranean cruise.
Mossack Fonseca agreed to process the paperwork needed to pull off the loan.
But concerns continued
In September 2015, a Mossack Fonseca employee discovered new media reports that alleged Mr. Aluko was “on the run from the law over several controversial and fraudulent dealings in the petroleum industry.” Employees handling the loan deal asked colleagues for “comfort to proceed without being seen as facilitators to money laundering activities and corruption.”
By October 2015, Mossack Fonseca had had enough – almost.
It cut its final ties with three of Mr. Aluko’s four companies, which had been inactive since 2014, and prepared a memo for BVI authorities outlining the law firm’s concerns about Mr. Aluko’s activities.
Before sending the memo, however, Mossack Fonseca certified the $30 million loan for Mr. Aluko’s Earnshaw Associates. A Mossack Fonseca employee justified the decision to help push through the paperwork by noting that the firm had already been working on the same loan transaction for months.
Mr. Quaicoe told ICIJ he could not discuss his work with Mr. Aluko. “I conduct business in accordance with the laws of the relevant jurisdictions pursuant to the contracts of services concluded with my clients,” Mr. Quaicoe said.
Ross S. Delston, a Washington, D.C., attorney and anti-money laundering expert, said that in general, banks, other financial institutions and financial intermediaries such as law firms, real estate agents and trust and company service providers should be skeptical whenever they’re dealing with clients who are involved in the oil business, are rumoured to have close connections to politicians, have been subjects of negative news stories and come from countries, like Nigeria, that are considered high-risk geographies for corruption, money laundering and other financial crimes.
“Taken together, these indicators and risk factors present not just red flags for money laundering or other financial crime but rather can be characterized as fireworks on the Washington, D.C., Mall on the Fourth of July,” Mr. Delston said.
As Mr. Aluko was securing his loan, the heat on Mrs. Alison-Madueke and her friends was increasing. In October 2015, a small number of Mrs. Alison-Madueke’s family members appeared in a London court on bribery and corruption charges, and police seized some of the minister’s assets, including $39,000 in cash. Nigerian authorities have continued to arrest and arraign other alleged Mrs. Alison-Madueke confidants. Mrs. Alison-Madueke could not be reached for comment.
In May 2016, the Federal High Court in Lagos granted the Nigerian government’s request for an order freezing assets linked to Mr. Aluko and three others. The four owed Nigeria $1.76 billion dollars in unpaid dues from crude oil sales, the government’s court filings alleged, and had shuffled “large sums to offshore accounts.”
The amount “is equal to the combined 2016 budgets of about 4 States in Nigeria which monies would be utilized to cater for about 13 million” people, the government noted. Nigeria had suffered “immense losses and damage” thanks to the failure by Mr. Aluko and the others to pay what they owed.
The court has frozen both of the assets used by Mr. Aluko to secure his $30 million loan in late 2015 – the luxury yacht and the Manhattan apartment in the 157 W. 57th Street skyscraper known as “The Billionaires Building.”
Mr. Aluko and the three other defendants “could use phony companies to dispose or dissipate their assets” out of Nigeria’s control, the government argued in an effort to keep Mr. Aluko and the others from selling off their assets before authorities could confiscate them. The government pointed to the sale, in April 2016, of Mr. Aluko’s 15,000- square-foot home in Beverly Hills as a sign “of desperation,” an indication of his desire to avoid “the long arms of the law.”
In July, Nigeria’s Economic and Financial Crimes Commission laid charges in court against several Nigerians with alleged ties to former minister Alison-Madueke. In a last-minute change, Mr. Aluko’s name was dropped from the charge sheet after government prosecutors admitted they had been unable to serve him with documents.
Contrary to his wealth manager’s claims, it seems, Mr. Aluko remains difficult to find.
Mr. Aluko is part of a constellation of Nigerian oil executives, state governors, cabinet ministers, military officials and tribal chiefs within the Panama Papers. Mossack Fonseca, a Panama-headquartered law firm with offices around the world, worked for three former Nigerian oil ministers who used companies to buy boats and homes in London, the records show.
The prevalence of Nigerians within the Panama Papers may be no coincidence. Nigeria loses more money from illicit activity, including graft and corporate tax abuse than any other African nation, research by anti-corruption groups indicates. As much as 12 percent of Nigeria’s annual gross domestic product is lost to illicit financial flows, according to Oxfam.
“Our firm, like many firms, provides worldwide registered agent services for our professional clients (e.g., lawyers, banks, and trusts) who are intermediaries,” Mossack Fonseca told ICIJ. “As a registered agent we merely help incorporate companies, and before we agree to work with a client in any way, we conduct a thorough due-diligence process, one that in every case meets and quite often exceeds all relevant local rules, regulations, and standards to which we and others are bound.”
Mossack Fonseca declined to answer specific questions and said, in providing its services, “we follow both the letter and spirit of the law. Because we do, we have not once in nearly 40 years of operation been charged with criminal wrongdoing.”
In October 2015, London police questioned Mrs. Alison-Madueke, Nigeria’s oil minister from 2010 to 2015, as part of investigations into allegations of bribery and money laundering. The investigations are ongoing. The ex-minister, who graduated with an architecture degree from Howard University in Washington, D.C., in 1992, is in London undergoing cancer treatment, her lawyers said.
Media reports have described Mr. Aluko as a key ally to Mrs. Alison-Madueke, a relationship both have previously denied. He rose to prominence around 2011 when Nigeria’s government awarded two companies he founded or owned valuable oil blocks on a no-bid basis. One of his companies, Atlantic Energy, was created the day before it inked the deals to acquire multimillion-dollar oil licenses.
Mr. Aluko is part of a circle of oil traders who are the subject of frequent media speculation in Nigeria. His lifestyle has earned him the reputation of being Nigeria’s playboy. He bought an apartment in Manhattan for $8.6 million and, according to The New York Times, paid more than $70 million to buy four homes in Santa Barbara and Beverly Hills.
The Nigerian government won a court order in May freezing assets linked to Mr. Aluko, two companies he directed and one of his business partners. The Lagos High Court order listed Mr. Aluko’s yacht along with property in London, four homes in California, two penthouses in Manhattan, one in Dubai, 132 houses and apartments in Nigeria and land in Canada and Switzerland. The court also ordered Mr. Aluko not to sell or dispose of more than $67 million in four bank accounts in London and Switzerland, an assortment of watches, a 58-car collection, and three airplanes.
Through a representative, Mr. Aluko told ICIJ that “I have never been prosecuted and convicted in any country. I am aware that a criminal investigation was started in the UK. However, to date, I have not been made aware of any law enforcement action to be undertaken against me.”
Aluko told ICIJ that the information relating to the award of oil contracts to his company was “misguided” speculation.
“As a private citizen, I organise my business and family matters to maximise convenience, as well as operational and administrative efficiency. My companies operate in accordance with the laws and regulations of the relevant jurisdictions and, insofar tax liabilities arise, they pay taxes in the jurisdictions in which taxes are due to be paid.”
Criminal charges for alleged crude oil fraud against Mr. Aluko were dropped in June as a result, according to media reports, of authorities’ inability to locate and serve the Swiss resident.
ICIJ was unable to reach a lawyer or representative of Mrs. Alison-Madueke.
News reports in Nigeria and Britain indicate that the U.S. Federal Bureau of Investigation, the U.K.’s National Crime Agency, and Switzerland’s Attorney General are investigating Mr. Aluko for his role in companies and transactions that were allegedly used to conceal Mrs. Alison-Madueke’s transfer of wealth outside Nigeria.
Switzerland’s Office of the Attorney General confirmed to ICIJ that it had received a request from the United Kingdom in relation to Mr. Aluko. U.K. authorities and the FBI did not confirm or deny the existence of an investigation.
Mossack Fonseca’s internal records show that Mr. Aluko owned four companies in the British Virgin Islands, one of the world’s busiest offshore havens. He was director of another, Fragola Ltd, in the Seychelles. In May 2013, Mr. Aluko paid $11.05 million to buy Almaty United Investors Limited, a BVI company that owned property in Dubai.
One of Aluko’s companies, Earnshaw Associates Limited, was directed on paper by a succession of three companies in Nevis, Switzerland and the BVI, financial hubs prized for their secrecy. The company was incorporated three weeks after Mrs. Alison-Madueke was appointed to head the Ministry of Petroleum Resources in April 2010.
In March 2014, Earnshaw Associates registered a Bombardier Global Express jet in Malta, according to documents sent through Mossack Fonseca. The 18-seat Bombardier is the same model of aircraft that Nigerian media reported Mrs. Alison-Madueke used during her time in office.
Oil Chief
Long before Mr. Aluko, Mossack Fonseca had faced questions about its Nigerian customers. In 2007, when the firm’s employees realized that an offshore company was being used by a former advisor to Olusegun Obasanjo, Nigeria’s president from 1999 to 2007, Jürgen Mossack reminded his staff that “in this firm, everyone knows that dealing with Nigerians always gives you headaches. It’s inevitable that this case involves a crime or fraud.”
Other suspect Nigerian deals seemed to have passed unnoticed.
One crude oil sale contract between three offshore companies, for example, provided for commissions so high that, one expert consulted by ICIJ said, the most obvious explanation is that the oil was stolen. Another file is a $12 million loan from a shell company to a Nigerian typed on half a sheet of paper.
“I had to sign dozens of pages of paperwork for my home loan,” said Aaron Sayne, a financial crimes lawyer and expert witness in dozens of oil fraud cases in Nigeria, after looking at the document. “And my home certainly isn’t worth $12 million.”
[160725-nigeria-06] In 1995 – 15 years before Mrs. Alison-Madueke became Nigeria’s first female petroleum minister – Dan Etete was sworn into the same office.
Mr. Etete, a mustachioed power-player from the oil-rich Bayelsa State, served as oil minister until 1998. His tenure became the subject of investigations after he left office. He was convicted in France of money laundering, and authorities in three countries continue to examine allegations that portions of a billion-dollar oil deal involving a company linked to Mr. Etete were transferred or pocketed as bribes by political figures and middlemen.
The Panama Papers reveal that Mr. Etete and the company, Malabu Oil & Gas Limited, signed a consultancy agreement with an offshore company created by Mossack Fonseca to negotiate the sale of oil blocks to China, a deal that never proceeded. Others documents appeared under Etete’s reported alias, Omoni Amafegha. Amafegha’s company, Pentrade Securities Inc., featured the signature of Richard Granier-Deferre, a French oil trader who was fined approximately $200,000 in 2007 by a Paris court as an accessory to Mr. Etete’s money laundering. The company was incorporated in 1998 when Mr. Etete was oil minister and opened a bank account in Gibraltar. Mr. Amafegha also owned Henkel Investments Ltd, which bought a boat in January 1998.
Mr. Etete denied using Amafegha as an alias and said he had never heard of Pentrade Securities Inc. or Henkel Investments. He denied owning or having owned Malabu. “It’s all just enemies that created this misinformation,” said Mr. Etete.
“I have nothing to do with any Panamanian companies,” Mr. Etete told ICIJ. “I have never been there or sent anyone there to open an account.”
The fall
At his peak, the oil magnate and luxury yacht owner Mr. Aluko was a globetrotter whose round face regularly graced celebrity Instagram pages and entertainment tabloids. When he was spotted in Paris in October 2013, Nigerian media thrilled at the suggestion he was dating supermodel Naomi Campbell. That same year, he launched a $500 million infrastructure development fund alongside Hollywood actor Jamie Foxx and partied in New York City at Leonardo DiCaprio’s 39th birthday bash. He was snapped at the side of rapper P Diddy in Ibiza, Spain, the following summer. The music star tweeted a photo of himself alongside a smiling Mr. Aluko with the caption “NIGERIA I LOVE YOU.” [160725-nigeria-05]
At the same time, tongues wagged back home. Mr. Aluko was regularly cited in Nigerian media as one of “the minister’s men,” a clique of Nigerian oil traders who had burst onto the scene and secured a string of oil licenses from Minister Alison-Madueke’s office with startling ease. In 2011 and 2012, Aluko’s Atlantic Energy, which boasted of “strong government relationships,” grabbed eight crude oil licenses in the Western Niger Delta. Atlantic sent tens of millions of dollars of crude oil to Italy, the United States, Germany, the Netherlands and elsewhere throughout 2012 and 2013, according to documents seen by ICIJ.
In September 2014, however, rumours floated in Nigerian media suggesting that Mr. Aluko and his companies had fallen out of favour with Mrs. Alison-Madueke. By September, Atlantic defaulted on its loans and owed Nigeria $1.3 billion in cash and other obligations. The Nigerian government and banks sent out confidential pleas to would-be angel investors in the hope they would be willing to step in with $700 million and fill the hole left by Atlantic’s bankruptcy.
Two months later, Mossack Fonseca employees doing a routine background check on Mr. Aluko discovered online news articles claiming that Nigerian authorities might ask Interpol, the world’s police body, to help extradite the magnate. Interpol has denied it ever sought the Nigerian. And while the Internet chatter was enough to spook some of Mossack Fonseca’s employees, the firm remained at Mr. Aluko’s service.
It wasn’t until June 2015 that Mossack Fonseca took a second look at Aluko after it received a demand from the British Virgin Islands Financial Investigation Agency to produce documents about Earnshaw Associates.
Mossack Fonseca told BVI authorities that “we do not have information about any bank accounts or assets held by” Earnshaw, despite having signed documents more than a year earlier to help Mr. Aluko’s company register a private jet.
In August 2015, the situation grew worse when the law firm realized it had no contact or personal documentation for Mr. Aluko. One Mossack Fonseca employee worried that this was a potential breach of the BVI’s requirement that offshore middlemen keep such information for at least five years after a company is mothballed.
An employee sought help from Mr. Aluko’s Swiss wealth manager, Johnnie Ebo Quaicoe, and shared links to four unflattering online news articles.
“I’m dumbfounded that Mossack Fonseca will print excerpts from tabloids,” Mr. Quaicoe wrote from Geneva.
“If Mr. Aluko is truly a wanted person,” Mr. Quaicoe chided Mossack Fonseca, “he would not be difficult to find because he is a resident in Switzerland.” Swatting the concerns aside, Mr. Quaicoe instead asked Mossack Fonseca to assist with a “major” $30 million mortgage with a Luxembourg bank. The loan was to be provided by Banque Havilland S.A. The collateral securing the loan would include the Galactica Star, the boat that Beyoncé and Jay-Z had rented for their Mediterranean cruise.
Mossack Fonseca agreed to process the paperwork needed to pull off the loan.
But concerns continued
In September 2015, a Mossack Fonseca employee discovered new media reports that alleged Mr. Aluko was “on the run from the law over several controversial and fraudulent dealings in the petroleum industry.” Employees handling the loan deal asked colleagues for “comfort to proceed without being seen as facilitators to money laundering activities and corruption.”
By October 2015, Mossack Fonseca had had enough – almost.
It cut its final ties with three of Mr. Aluko’s four companies, which had been inactive since 2014, and prepared a memo for BVI authorities outlining the law firm’s concerns about Mr. Aluko’s activities.
Before sending the memo, however, Mossack Fonseca certified the $30 million loan for Mr. Aluko’s Earnshaw Associates. A Mossack Fonseca employee justified the decision to help push through the paperwork by noting that the firm had already been working on the same loan transaction for months.
Mr. Quaicoe told ICIJ he could not discuss his work with Mr. Aluko. “I conduct business in accordance with the laws of the relevant jurisdictions pursuant to the contracts of services concluded with my clients,” Mr. Quaicoe said.
Ross S. Delston, a Washington, D.C., attorney and anti-money laundering expert, said that in general, banks, other financial institutions and financial intermediaries such as law firms, real estate agents and trust and company service providers should be skeptical whenever they’re dealing with clients who are involved in the oil business, are rumoured to have close connections to politicians, have been subjects of negative news stories and come from countries, like Nigeria, that are considered high-risk geographies for corruption, money laundering and other financial crimes.
“Taken together, these indicators and risk factors present not just red flags for money laundering or other financial crime but rather can be characterized as fireworks on the Washington, D.C., Mall on the Fourth of July,” Mr. Delston said.
As Mr. Aluko was securing his loan, the heat on Mrs. Alison-Madueke and her friends was increasing. In October 2015, a small number of Mrs. Alison-Madueke’s family members appeared in a London court on bribery and corruption charges, and police seized some of the minister’s assets, including $39,000 in cash. Nigerian authorities have continued to arrest and arraign other alleged Mrs. Alison-Madueke confidants. Mrs. Alison-Madueke could not be reached for comment.
In May 2016, the Federal High Court in Lagos granted the Nigerian government’s request for an order freezing assets linked to Mr. Aluko and three others. The four owed Nigeria $1.76 billion dollars in unpaid dues from crude oil sales, the government’s court filings alleged, and had shuffled “large sums to offshore accounts.”
The amount “is equal to the combined 2016 budgets of about 4 States in Nigeria which monies would be utilized to cater for about 13 million” people, the government noted. Nigeria had suffered “immense losses and damage” thanks to the failure by Mr. Aluko and the others to pay what they owed.
The court has frozen both of the assets used by Mr. Aluko to secure his $30 million loan in late 2015 – the luxury yacht and the Manhattan apartment in the 157 W. 57th Street skyscraper known as “The Billionaires Building.”
Mr. Aluko and the three other defendants “could use phony companies to dispose or dissipate their assets” out of Nigeria’s control, the government argued in an effort to keep Mr. Aluko and the others from selling off their assets before authorities could confiscate them. The government pointed to the sale, in April 2016, of Mr. Aluko’s 15,000- square-foot home in Beverly Hills as a sign “of desperation,” an indication of his desire to avoid “the long arms of the law.”
In July, Nigeria’s Economic and Financial Crimes Commission laid charges in court against several Nigerians with alleged ties to former minister Alison-Madueke. In a last-minute change, Mr. Aluko’s name was dropped from the charge sheet after government prosecutors admitted they had been unable to serve him with documents.
Contrary to his wealth manager’s claims, it seems, Mr. Aluko remains difficult to find.
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