Diezani Alison-Madueke - MV Galactica Star yacht (United States chapter)

According to court documents, from 2011 to 2015, Nigerian businessmen Kolawole Akanni Aluko and Olajide Omokore conspired with others to pay bribes to Nigeria’s former Minister for Petroleum Resources, Diezani Alison-Madueke, who oversaw Nigeria’s state-owned oil company. In return, Alison-Madueke used her influence to steer lucrative oil contracts to companies owned by Aluko and Omokore. The proceeds of those illicitly awarded contracts totaling more than $100 million were then laundered in and through the United States and used to purchase various assets through shell companies. The real estate was also used as collateral for loans to Aluko and shell companies he controlled. As part of the forfeiture process, those lien holders were paid. The forfeited assets include a $50 million condominium in One57 - 157 W. 57th Street - one of Manhattan’s most expensive buildings, other luxury real estate in California and New York, as well as an $80 million yacht, known as Galactica Star.

The complaint states that Aluko, Omokore and others funded a lavish lifestyle for Alison-Madueke, conspiring to purchase millions of dollars in real estate in and around London for Alison-Madueke and her family members, then renovated and furnished these homes with millions of dollars in furniture, artwork and other luxury items purchased at two Houston-area furniture stores at Alison-Madueke’s direction. Aluko and Omokore also laundered proceeds into and through the U.S. to purchase U.S. real estate. During the period from March 2012 through January 2015, Aluko purchased more than $87 million dollars’ worth of real property in the United States and an $80 million luxury yacht.

In return for the bribes, Alison-Madueke allegedly used her influence as Petroleum Minister to direct a subsidiary of the Nigerian National Petroleum Corporation to award contracts to two shell companies created by Aluko and Omokore: Atlantic Energy Drilling Concepts Nigeria Ltd. and Atlantic Energy Brass Development Ltd, in 2011 and 2012. The companies were incorporated in Nigeria in 2010 and 2013 respectively, and were both owned by holding companies incorporated in the British Virgin Islands, beneficially owned by Aluko and Omokore. Omokore acted as a registered director of both Nigerian companies.

Under the contracts, the two companies were required to finance the exploration and production operations of eight on-shore oil and gas blocks. However, according to the DOJ complaint, the companies provided only a fraction of the agreed upon financing or, in some instances, failed entirely to provide it. The companies also failed to meet other contractual obligations, including the payment of a $120 million entry fee. Nevertheless, the companies were allegedly permitted to lift and sell more than $1.5 billion worth of Nigerian crude oil.

A February 2014 report prepared by the then-governor of the Central Bank of Nigeria determined that Atlantic Energy Drilling Concepts Nigeria Ltd “had neither the technical expertise nor the capital to develop the joint venture, but [was] none-the-less able to lift crude and retain the proceeds . . . up to 70% of the profit of the Joint Venture.” The report concluded that the arrangement was set up “for the purpose of acquiring assets belonging to the [Federal Republic of Nigeria] and transferring the income to private hands.”  Atlantic Energy Brass Development Ltd allegedly sold $811 million worth of crude oil over the course of one year to a UK subsidiary of Glencore, “despite failing to meet any obligations” under its contract with the Nigerian state-owned oil company, according to the complaint.

In addition to the Nigerian companies and its BVI holding companies, the conspirators also set up a number of other BVI-registered companies and at least three companies incorporated in the Seychelles that were used by Aluko and Omokore to purchase real estate in the United Kingdom, allegedly for the benefit of Alison-Madueke. The $82 million yacht was bought by a company incorporated in the British Virgin Islands that was controlled and beneficially owned by Kolawore Aluko; the sale was brokered by a financial and corporate services company based in Guernsey. At least three companies incorporated in U.S. states – Nevada, Delaware, and California – were used by conspirators to spend corrupt funds at a furniture store in Houston, pay for transportation services, and purchase a property in Santa Barbara, California.

[Source: United States v. The MV Galactica Star, et al., 4:17-cv-02166 (S.D.Tex.) and related cases]

The United States reached an agreement with the Federal Republic of Nigeria to return over $52.8 million in assets that were forfeited as corruption proceeds linked to former Nigerian petroleum minister Diezani Alison-Madueke. The assets were forfeited through investigations conducted by the Kleptocracy Asset Recovery Initiative of the International Unit of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS). These assets were laundered through the U.S. financial system using luxury purchases and U.S.-based bank accounts. The funds, recovered through DOJ civil forfeiture actions, will be used to fund  electrification projects and capacity building of criminal justice practitioners in Nigeria under monitored agreements.

[Source: Department of Justice]