One of the biggest scams of the '90s
One of the most fascinating scams that occurred between 1995 and 1998 involved Emmanuel Nwude, a Nigerian scammer who managed to sell a fake airport to a Brazilian bank. Such a scam is unlikely to be successful in today’s world as people are more aware of scams as a result of the surge in internet scams worldwide.
Nowadays, hardly anyone falls for those emails promising us fortunes that seemingly fall from the sky.
I bet we’ve all received that email about an “investment opportunity” or the long lost aunt who left us millions in their will. But, we all know better than to respond to those!
The scam
Emmanuel Nwude the mastermind behind the scam had previously worked as a director of the Union Bank of Nigeria. His banking background gave him access to the knowledge, documentation and links that made him more believable when it came to executing his scam. Emmanuel’s experience as a bank director meant that he had ample knowledge of how to conduct himself in a business setting and probably had a certain confidence about him that put his victims at ease.
- Emmanuel Nwude
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To execute his scam Emmanuel impersonated Paul Ogwuma, who at the time was the governor of the Central Bank of Nigeria. His accomplices were Emmanuel Ofolue, Obum Osakwe, Nzeribe Okoli and the Ikechukwu’s, a husband and wife duo. With the help of his accomplices and his new identity, Emmanuel was able to connect with Nelson Sakaguchi, the then director of the Brazilian bank, Banco Noroetse.
Emmanuel pitched the idea of getting the Brazilian bank involved in developing the Nigerian economy by investing in the building of a new airport in Nigeria’s capital, Abuja. Emmanuel sweetened the deal for Nelson by informing him that should the deal be successful, he would be in line to pocket $10 million as commission. The promise of a hefty payout was enough to intrigue Nelson and he fell for the scam. Between 1995 and 1998 he paid the fraudsters $191 million in cash and the remaining $51 million in the form of outstanding interest from Banco Noroetse.
The scam falls apart
Emmanuel and his crew almost got away with the scam. But, things began to unravel when Banco Santander, a Spanish bank wanted to takeover the Brazilian bank in August 1997. The takeover meant that thorough investigations of the Brazilian bank’s financial statements was conducted. During this period many board meetings between the two banks took place and in December 1997, top officials from the Spanish bank questioned why almost half of the Brazilian bank’s capital was sitting in an unprotected account in the Cayman Islands.
As this discrepancy could not be sufficiently explained as there was no new airport in Abuja, formal investigations were initiated. Criminal investigations also had to be carried out in multiple jurisdictions which included Brazil, Nigeria, Switzerland and England. In an effort to ensure that the sale of the Brazilian bank still went through, the owners of the bank had to pay the missing $242 million from their own pockets. Despite this, the Brazilian bank eventually collapsed.
The culprits apprehended
Although the scam took place between 1995 and 1998, Emmanuel and his accomplices were only brought to court in 2004. The complexity of the case meant that specialist investigations had to be carried out. As a result of this, the criminal investigations only began to take shape in 2002. This is when the then Nigerian president, Olesegun Obasanjo established an anti-graft agency, the Economic and Financial Crimes Commission (EFCC).
When the scammers were brought before the Abuja High Court they faced over 100 counts of fraud and bribery related charges. They originally pleaded not guilty.
However, their defense began to crumble when one of the fraudsters confessed. Despite a confession from one of his accomplices, Emmanuel still tried to evade justice by attempting to bribe the chairman of the EFCC with $75 000. This did not end well for him as the chairman refused the bribe resulting in additional bribery charges being added to Emmanuel’s docket.
The prosecutors in the matter managed to secure as a witness, Nelson Sekaguchi, the man who had been conned into making payments for the non-existent airport. Following his testimony Emmanuel and the rest of his remaining crew plead guilty. Emmanuel was sentenced to five years in prison and ordered to pay $10 million as a fine to the federal government.
This seems like a very small amount for someone who had defrauded a bank of over $200 million dollars. The fine was probably a mere drop in the ocean for him.
[*] Questions. . .
This scam is one of the biggest banking scams of the century. It is quite difficult to understand how such a scam was even allowed to happen. A deal involving millions of dollars usually involves hours of due diligence exercises by lawyers and the various professionals involved. It is mind-boggling how an established bank was able to fall victim to such a scam.
Why did the bank not send a crew to Abuja to observe the construction of the airport? Why didn’t Nelson ask more questions? There are so many more questions than answers to this story. But, one thing is for sure, this scam forms an integral part of banking history that will be studied by bankers for years to come.
