$144m fraud: How Diezani, Omokore, Aluko blew billions on ‘lavish lifestyle’

Embattled former minister of petroleum, Diezani Alison-Madueke, has come under more intense heat as details of her alleged profligacy and lavish lifestyle while in office emerged.

Fresh information gleaned from court papers filed against her and two of her alleged associates, Kola Aluko and Jide Omokore, by the United States Department of Justice (US-DOJ) in Houston showed that the trio spent huge sums of money on the acquisition of luxury assets in the United States, with funds believed to have been proceeds from the illegal sales of Nigerian crude oil, allocated to a number of shell companies allegedly under the control of the associates of the former minister.

In court depositions filed under the Kleptocracy Asset Recovery Initiative, the US-DOJ sought a forfeiture order over assets worth about $144m.

Some of the assets listed in the court papers include a $50m luxury condo apartment in New York and the $80m yacht, which were acquired as conduits for laundering illegal funds made from crude oil swap deals.

The $50m New York condo is at One57, located opposite Carnegie Hall in midtown Manhattan. The building currently holds the record for the most-expensive residential sale in New York following a $100.5m apartment purchase in 2014.

The condo purchased by Aluko is rated as the 8th most expensive unit in the building. Following his inability to sustain repayment of the mortgage on the apartment, mortgagee put it up for auction, scheduled to hold on July 19.

He is also alleged to have purchased the Galactica Star, a 65-meter yacht that cost $80m.

US-DOJ asserted that its investigations directly pointed to the duo of Aluko and Omokore as being the ones who funded Diezani’s alleged extravagant lifestyle by funneling huge funds back to her.

The US prosecutors claimed that they acted as fronts in the acquisition of luxury real estate in and around London for Alison-Madueke and her family members. They further alleged that the homes were renovated and equipped with exquisite furniture, artworks and other luxury items purchased at Alison-Madueke’s direction, at costs running into millions of dollars.

Both Aluko and Omokore are alleged to have paid bribes between 2011 and 2015 to Diezani, for facilitating the award of billion-dollar oil swap contracts to shell companies owned by the businessmen to sell Nigeria’s crude oil.

Through the oil swap contracts, which were essentially barter arrangements, crude oil was exchanged for refined products, as the country’s local refineries could not meet the national demand given their epileptic production.

Records show that between 2010 and 2014, when Diezani was petroleum minister, the country allocated over 352 million barrels of oil worth a total of $35bn for oil swap deals.

However, the contracts were mostly opaque, leading to the nation losing more than $900m in crude oil swap deals between 2009 and 2012 alone.

When he was the Governor of the Central Bank of Nigeria, Emir Muhammadu SAnu$i, described them as “not properly structured, monitored and audited.” In the papers filed in the court case, prosecutors gave some details of the funds funneled back to Diezani or payments made on her behalf by her alleged associates: “In one day in May 2012, Mr. Aluko was said to have wired $461,500 and $262,091 to two furniture stores in Houston from a Swiss bank account, on behalf of Mrs. Alison-Madueke.

In return, the prosecutors alleged that Diezani directed a subsidiary of the Nigerian National Petroleum Corporation to award Strategic Alliance Agreements contracts (SAAs) to two shell companies created by Aluko and Omokore: Atlantic Energy Drilling Concepts Nigeria Ltd. and Atlantic Energy Brass Development Ltd. (the Atlantic Companies).

Under the SAAs, the Atlantic Companies were required to finance the exploration and production operations of eight onshore oil and gas blocks. In return for financing these operations, the companies expected to receive a portion of the oil and gas produced.

However, the two companies provided only a fraction of the funding agreed on or even did not provide anything at all in some instances.

The companies also failed to meet other obligations under the SAAs, including the payment of $120m entry fee.

Notwithstanding their failure to fulfill the terms of the SAAs, the companies were still allowed to lift and sell more than $1.5bn worth of Nigerian crude oil. Like a set piece in a soccer match, the companies turned around and allegedly used a series of shell companies and intermediaries to launder a portion of the total proceeds of these arrangements into and through the United States.

When he became aware of the sordid details, President Buhari cancelled the oil swap arrangement in November 2015, seven months after taking office. In the court papers, Diezani is quoted to have cautioned Aluko in a recorded conversation not to acquire the yacht: “If you want to hire a yacht, you lease it for two weeks or whatever. You don’t go and sink funds into it at this time when Nigerian oil and gas sector is under all kinds of watch.”

Apparently, as the court papers now show, Aluko brushed her advice aside and still bought the yacht.