Allen Onyema And Air Peace V. US Department Of Justice: Points To Ponder By Prof. Emmanuel N. Emenyonu – TheNigerialawyer

The Nigerian media space went agog when the United States
District Court for the Northern District of Georgia Atlanta
Division on November 19, 2019, filed Case 1:19-cr-00464, A “True
Bill”, otherwise known as Grand Jury Criminal Indictment against
the persons of Allen Ifechukwu Athan Onyema, a Nigerian Citizen,
the Chairman and CEO of Air Peace; and Ejiroghene Eghagha, a
Nigerian citizen and the Chief of Administration and Finance of Air
Peace. Commentators have speculated on the guilt or innocence of
the accused. Others have offered some theories relating to the
motivations and hidden hands behind the Indictment.

In all, the indictment alleges in its 36 pages and 88
paragraphs 35 counts of diverse criminal offences. Count
One alleges Conspiracy to Commit Bank Fraud an offence covered by
title 18 of U.S. Code (U.S.C.) § 1349. Counts Two to Four allege
Bank Fraud contrary to 18 U.S. C. § 1344. Counts Five to Eight
allege Conspiracy to Commit Credit Application Fraud, covered under
18 U.S. C. § 371. Counts Nine through Thirty-Five allege Money
Laundering, covered under 18 U.S.C § 1957. Finally, Count
Thirty-Six, Aggravated Identity Theft, 18 U.S.C. § 1028A(a)(1).
Counts One to Eight, name both Allen Onyema and Ejiroghene Eghagha
as defendants. Counts Nine to Thirty-Five, specifically name only
Allen Onyema as defendant. Count Thirty-Six names Ejiroghene
Eghagha as the sole defendant. If convicted of any of the charges,
the Indictment is seeking for forfeiture to the United States of
any property derived from proceeds traceable to such offenses,
including Money Judgment and Banks Funds held in JP Morgan Chase
Account ending in 5512 ($4,017,852.51), Bank of Montreal Canada
account number ending 7523 ($4,593,842.05) and Bank of Montreal
Canada account number ending in 7515 ($5,634,842.04), totaling
$14,246,536.60.

Thirty-Five allege Money Laundering, covered under 18
U.S.C § 1957. Finally, Count Thirty-Six, Aggravated
Identity Theft, 18 U.S.C. § 1028A(a)(1). Counts One to Eight, name
both Allen Onyema and Ejiroghene Eghagha as defendants. Counts Nine
to Thirty-Five, specifically name only Allen Onyema as defendant.
Count Thirty-Six names Ejiroghene Eghagha as the sole defendant. If
convicted of any of the charges, the Indictment is seeking for
forfeiture to the United States of any property derived from
proceeds traceable to such offenses, including Money Judgment and
Banks Funds held in JP Morgan Chase Account ending in 5512
($4,017,852.51), Bank of Montreal Canada account number ending 7523
($4,593,842.05) and Bank of Montreal Canada account number ending
in 7515 ($5,634,842.04), totaling $14,246,536.60.

Count One, paragraph 1 alleges that the defendants
conspired to, “knowingly devise and execute and attempt to
execute a scheme and artifice (i) to defraud financial institutions
the deposits of which were insured by the Federal Deposit Insurance
Corporation, that is, Wells Fargo Bank and JPMorgan Chase Bank, NA,
and (ii) to obtain and attempt to obtain moneys, funds and assets
owned by and under the custody and control of those financial
institutions by means of materially false and fraudulent pretenses,
representations, and promises, as well as by omission of material
facts, in violations of Title 18, United States Code, Section
1344.” The charges continue from paragraph 2 to give the profile of
Mr. Onyema, his trips to Atlanta, opening of US Bank Accounts,
transference of funds from Nigerian bank accounts to US bank
accounts, ownership of Air Peace, personal expenses at Atlanta area
stores and even eating at restaurants and sundry immaterial issues.
May be, these were aimed at the emotions of the members of the
grand jury. No where did the indictment actually convey how the
defendants harmed US depositors and their funds. Counts Nine to
Thirty-Five give a list of routine transfers from one Wells Fargo
Account ending 8621 to two other Wells Fargo Accounts ending in
0125 and 8020, all belonging to and under the control of the
accused persons ranging in amounts from $150,000.00 to
$1,000,000.00.

The charges either expressly or impliedly cover a wide array of
complex topics dealing with international letters of credit, such
as: international aviation business; structuring of operations
between a foreign parent company and its subsidiary(ies);
international banking and financial flows; international transfer
pricing and taxation; and Anti Money Laundering (AML) regulations
enforcement. Any one of these topics is complex enough all by
itself and a case that has combinations of these topics is bound to
be very difficult to untangle.

It is important to always bear in mind that this is a
Grand Jury Indictment, usually secured ex parte, that is,
in the absence of the accused. In Grand Jury proceedings the
accused is not entitled to Sixth Amendment rights to defense
counsel in the grand jury room, nor the right to examine and
cross-examine witnesses. From its historical intentions of
protecting innocent citizens against overzealous prosecutors, some
experts opine that the American Grand Jury system is broken. For
instance, the American Bar Association, has criticized the GJ
system for “being a mere rubber stamp for the prosecution without
adequate procedural safeguards”. William J. Campbell, a former
federal district judge in Chicago, noted in 1973 that: “[T]oday,
the grand jury is the total captive of the prosecutor who, if he is
candid, will concede that he can indict anybody, at any time, for
almost anything, before any grand jury.” Not much has changed since
Judge Campbell made those observations. In an Editorial on Sunday,
April 16, 2012, the New York Sun reminded readers that, the Chief
Judge of New York State’s highest court, Sol Wachtler, “once said
that grand juries were so pliable that a prosecutor could get a
grand jury to “indict a ham sandwich.” It is therefore important
for people especially in the court of public opinion to withhold
judgement based on a one-sided narrative presented by the
prosecutors, who have been known to be overzealous. It is not
unheard off to have Grand Jury indictments dismissed. For instance
according to the 2018 Annual Statistical Report of the US Attorneys
Office, out of the 151 non narcotics related Money Laundering
indictments that were determined, 18, representing about 12 percent
were dismissed.

As at last count, it has been reported that the
Nigerian Economic and Financial Crimes Commission (EFCC) has
entered the fray. The EFCC will need to bear in mind that the
overriding interest in the US Department of Justice Grand Jury
Indictment against the named officials of Air Peace is the interest
of the United States, not natural justice per se. The US DOJ in the
Indictment is asking that funds which clearly originated from
Nigeria should be forfeited to the United States if the accused are
found guilty.

This is against natural justice and biased towards US
interests. In the Fiscal Year 2018 Annual Statistical
Report of the US Attorneys Report, the US Department of Justice
declined to press ahead with the prosecution of a total of 2,573
alleged criminal matters on account of “Prioritization of Federal
Resources and Interests (emphasis mine) “. A partial breakdown of
some of these offenses the US DOJ declined to prosecute for the
above-stated reasons: violent crimes (452), Terrorism/National
Security (171), Drugs (414), Official Corruption (67), white-collar
crimes (623), government regulatory offenses (99) and organized
crime (13).

These are very serious offenses for the US DOJ to decline
prosecution citing prioritization of Federal Resources and
Interests. I have not seen anything in the Grand Jury Indictment of
the CEO of Air Peace Chief Allen Onyema and the Chief
Administrative and Financial Officer of the same company Mr.
Eghagha to warrant the US DOJ to rank this issue higher in their
priority than even crimes involving terrorism and national security
of the United States. Except there are aspects to this case that
the US DOJ has not mentioned yet, the Nigerian EFCC should resist
the temptation to be used as a pliant tool for bringing down a
thriving Nigerian company that is providing jobs directly and
indirectly for thousands of people all across Nigeria and beyond.
The EFCC should remember the case of Arthur Andersen LLP which was
charged by the US District Court for the Southern District of Texas
on May 6, 2002, in connection with the ENRON scandal, convicted on
June 15, 2002; the conviction affirmed by the 5th Circuit (the
relevant US Federal Appeal Court) in 2004, only for the US Supreme
Court to overturn the rulings of these lower courts in favor of
Arthur Andersen in 2005. Unfortunately, for Arthur Andersen, it was
unable to recover from these legal setbacks and had to shut its
doors notwithstanding the ruling of the highest court in the land.
Overzealous US DOJ prosecutions can lead to incalculable harm to
individuals and companies even when they are finally exonerated.
The economic interest of Nigeria should weigh heavily on the minds
of the leaders of EFCC as they proceed on this issue.

In conclusion, with respect to Money Laundering
cases, banks and financial institutions who are the gatekeepers of
the financial system have a high degree of responsibility in
combating the crime by adhering to AML due process procedures
especially, knowing their customers (KYC). This is a major plank of
Anti Money Laundering (AML) laws and regulations in many
jurisdictions. For instance, in September 2019, ING, the big Dutch
bank was fined the sum of $900 million for lapses in the bank’s KYC
implementation. If as alleged, Air Peace and the leaders of the
company engaged in serial AML offenses using wells Fargo, why is
Wells Fargo Bank not included in the Indictment or in any separate
indictment for that matter for Counts Nine to Thirty-Five? It
appears here that the US DOJ is primarily concerned with protecting
Wells Fargo and the two other systemically important banks named in
the Indictment. The connotation of sinister criminal activities on
the part of the accused which has been suggested by the Indictment
and various headlines is not supported by a careful reading of the
Indictment. Usually in major financial crime cases such as this,
the indicting US Federal agency will identify the victims and the
magnitude in US dollar terms of losses suffered by the victims. No
victims were specifically mentioned not to talk of the monetary
amount of the losses incurred by the victims. The US companies that
sold airplanes and the banks that profited from facilitating those
transactions have not asked to disgorge the profits arising from
those transactions. Air Peace and the accused persons should put up
a robust defense to clear their names from what looks to be an
overreach by zealous prosecutors.

Emmanuel N. Emenyonu, Ph.D (Glasgow), LLB
(London), CPA (Massachusetts), FCA (Nigeria)
Professor of Fraud and Forensic Accounting at Southern Connecticut
State University, has at various times taught International
Accounting, Financial Accounting, Taxation, Finance and Accounting
Information Systems at leading universities such as University of
Nigeria, Yale University, Covenant University, Howard University
and Quinnipiac University.