draining development.pdf - Khazar University

The Kleptocrat’s Portfolio Decisions 421Daura’s overseas accounts to accounts held in the names of the Abachasand their associates. As much as US$100 million was thus exported byDaura.Another method used was for cash and traveler’s checks to be depositedin accounts held with local commercial banks in Nigeria, including,in particular, accounts held in the name of Bagudu with Inland Bank ofNigeria and Union Bank of Nigeria. The funds were then transferred onto accounts maintained at banks outside Nigeria in the names of entitiesowned or controlled by the Abachas.Following the CBN directive, the Nigerian banks were used to undertakewhat Bagudu referred to as “cash swaps.” Bagudu made deposits offoreign currency and traveler’s checks at local Nigerian banks. Thesewere then deposited by the local bank with the CBN, which made a correspondingtransfer from one of its overseas foreign currency accountsto the overseas domiciliary account (held by banks such as Commerzbankand Citibank) of the relevant local bank. The sums held in the relevantbank domiciliary accounts would be held for their clients, the Abachasor their associates, who would then give transfer instructions to therelevant banks to effect transfers from the domiciliary accounts to recipientaccounts. Huge sums were transferred this way.Structures through which corrupt funds were transferred, held, and managed.The Abachas and their accomplices used traditional methods tolaunder the monies stolen from the CBN, such as multiple accounts.Estimates vary, but it is thought that probably around 1,000 differentaccounts were opened in different jurisdictions. These accounts were allowned or controlled by members of the Abacha family and their accomplicesor by persons who were not readily identifiable. The use of multipleaccounts is a recognized device used by money launderers because itimpedes the monitoring and tracing of client activity and assets bybanks, allows the quick and confidential movement of funds, disguisesthe true extent of an individual’s assets, and hides and facilitates illicitactivities.Shell companies incorporated in offshore locations such as The Bahamas,British Virgin Islands, Isle of Man, and others where there is littlepublicly available information in relation to ownership, control, orfinancial position were used liberally. None of these companies had any