draining development.pdf - Khazar University

The Kleptocrat’s Portfolio Decisions 423assets transferred to other jurisdictions such as Jersey, Liechtenstein, Luxembourg,and the United Kingdom. Had Nigeria waited for the transmittalof evidence by Switzerland through the formal mutual legal assistanceroute, it would only have received the documents necessary to send additionalrequests to those jurisdictions in about August 2003. Such delayswould have repeated themselves in those jurisdictions, and Nigeria wouldprobably never have been able to freeze any meaningful assets.To avoid these delays, Monfrini lodged, in late November 1999, acriminal complaint alleging fraud, money laundering, and participationin a criminal organization, with the attorney general of Geneva. A list ofthe suspects and their companies was provided, and Nigeria also made aformal request to be admitted in the criminal proceedings as a civil partysuing for damages. The attorney general opened a criminal investigation,and, within a matter of days, Nigeria was also admitted as a civil party. 11A blanket freezing order was sent by the Swiss authorities to all Swissbanks and financial institutions (at that time, there were about 11,000),listing the names of the suspects, their aliases, and their companies.Following the lodging of the criminal complaint, dozens of accountswith assets totaling more than US$700 million were frozen in Switzerlandin the context of the domestic criminal proceedings. This was theconsequence of banks reporting all suspicious accounts following theblanket freezing order and the media coverage of the investigation.Accounts and insurance policies were found to be held at a number ofleading banks, including Warburgs, Union Bancaire Privée, Crédit Suisse,Baring Brothers, Crédit Agricole Indosuez, UBS, and Goldman Sachs.These accounts were held in the names of Abacha family members andthe companies set up by them. In the court proceedings that followed inSwitzerland, it was clear that all these banks had been all too willing toassist the Abachas.After several years of litigation in Swiss courts, the matter reached theSwiss Federal Supreme Court. The accounts in question had the characteristicsof what the court called “transitional accounts,” which do notrelate to any identifiable activity and have a high frequency (at intervalsof only a few days) of payments of significant sums, apparently unrelatedto any consideration. These accounts were used to transfer on(launder) the sums sent in checks and cash either by Bagudu himself orhis accomplices, all of whom were Swiss nationals.