By Ataguba Aboje, Esq
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The recent revelations surrounding the alleged fraud and money laundering activities of former Kogi State Governor Yahaya Bello have brought to light the disturbing role played by The American International School of Abuja (AISA) in potentially facilitating these illicit financial transactions.
The school’s response to the Economic and Financial Crimes Commission’s (EFCC) investigation where it admitted having received the sum of $845,852 as advance tuition for 5 of the former governor’s children until they graduate from ASIA raises serious concerns about its compliance with anti-money laundering laws and regulations in Nigeria and the possibility of an unholy alliance that may have facilitated and abetted the former governor’s alleged money laundering activities.
It is perplexing and inexplicable why the lump sum payment made by Yahaya Bello, a politically exposed person (PEP), which covered the school fees of his children until their graduation, and which significantly exceeded the actual fees, did not raise suspicion or lead to enhanced due diligence and trigger the school’s reporting obligations under the Money Laundering (Prevention and Prohibition) Act, 2022. Such a transaction, characterized by its unusual nature and lack of apparent economic rationale, should have been deemed suspicious and potentially indicative of money laundering activities, necessitating the filing of a Suspicious Transaction Report (STR) as mandated by the Act.
It is even more perplexing and raises further suspicions about AISA’s conduct that the school willingly accepted a sum significantly exceeding the required school fees until graduation. Compounding this suspicious behaviour is AISA’s current stance of expressing willingness to refund “back to the State” only the excess amount beyond the actual school fees. This proposed course of action is highly questionable and raises concerns about the school’s potential involvement in facilitating or benefiting from the alleged proceeds of the former governor’s unlawful activities.
The school’s conduct does appear to have significantly breached the provisions of the Money Laundering (Prevention and Prohibition) Act, 2022. The substantial payment of $845,852 (approximately N1.3 billion) made by the former governor, allegedly from the proceeds of an N80.2 billion fraud, should have raised serious red flags for AISA. By accepting this lump sum payment, which significantly exceeded the actual school fees required until graduation, AISA potentially violated Section 7(1) of the Act. This section mandates that financial institutions and designated non-financial businesses and professions must report transactions that appear to have no economic justification or lawful objective, or those that involve funds reasonably believed to be the proceeds of criminal activities.
AISA’s failure to report this suspicious transaction constitutes a potential breach of Section 7(2), which requires the submission of a written report detailing the relevant information and reasons for suspicion within 24 hours of the transaction. Furthermore, by retaining the funds AISA may have violated Section 20 of the Act, which prohibits the retention of proceeds from an unlawful act.
Compounding these potential breaches is AISA’s proposal to refund “back to the State” only the excess amount, while retaining the portion covering the school fees. This action raises concerns about the school’s adherence to Section 4 of the Act, which requires financial institutions and designated non-financial businesses to identify and verify the identity of customers, beneficial owners, and any persons acting on behalf of the customer. Given the former governor’s status as a politically exposed person (PEP), AISA had an obligation under Section 4(7) and 4(8) to apply enhanced due diligence measures, including establishing the source of wealth and funds, and conducting ongoing monitoring of the relationship.
By accepting the substantial payment without adequate scrutiny and failing to report the suspicious transaction, AISA may have facilitated or benefited from the alleged money laundering activities of the former governor. These actions could potentially constitute offences under Section 18(2) of the Act, which prohibits the acquisition, use, retention, or control of funds that are reasonably known or ought to have been known to be the proceeds of an unlawful act.
Based on the alleged breaches of the Money Laundering (Prevention and Prohibition) Act, 2022, the EFCC could potentially file the following charges against AISA and its relevant officers or employees:
- Failure to report suspicious transactions (Section 7(1)(2))
- Failure to conduct customer due diligence (Section 4)
- Potential money laundering offense (Section 18(2))
- Retention of proceeds of an unlawful act (Section 20)
If found guilty, AISA and its officers could face severe penalties, including substantial fines, imprisonment, or both, as stipulated in the Act.
The EFCC should seek the application of the concept of a constructive trust which can be a valuable tool in tracing and recovering unlawful payments made to the school. A constructive trust is an equitable remedy imposed by a court to prevent unjust enrichment when a person or entity holds property or funds that rightfully belong to someone else. If the court imposes a constructive trust, the school would be required to return the unlawful payments to Kogi State, the rightful beneficiary. This may involve a court-ordered seizure, repayment plan or other arrangements to ensure the funds are returned in a timely and appropriate manner.
AISA’s alleged complicity in the Yahaya Bello money laundering scandal represents a grave disregard for anti-money laundering laws and regulations in Nigeria. The school’s failure to report suspicious transactions, conduct proper customer due diligence, and uphold its obligations under the Money Laundering (Prevention and Prohibition) Act, 2022, is a serious breach that deserves swift and decisive action from the relevant authorities.
The EFCC should thoroughly investigate AISA’s role in this matter and, if warranted, pursue appropriate legal action to hold the school accountable for its alleged transgressions which may have arisen knowingly, from complacency or wilful negligence, none of which provides a valid defence against potential charges.
Written by Ataguba Aboje, Esq
Barrister and Solicitor of the Supreme Court of Nigeria, Solicitor of the Senior Courts of England and Wales, Certified Information Privacy Europe (CIPP/E), He can be reached at ataguba.aboje@aandgsolomon.com
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