ANS News - The Pinnacle of Fraud (fwd)
Shehu Othman
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Date: Mon, 18 Nov 1996 18:54:57 GMT
From: ABDULLAHI BALA <pbs...@wye.ac.uk>
To: t...@lists.lancs.ac.uk
Subject: ANS News - The Pinnacle of Fraud
> Theweek
>
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> Nigeria
>
> The Pinnacle of Fraud
>
> Theweek - November 18, 1996
>
> by Ademola Adedoyin
>
> Lagos - For the very top echelon of the Nigeria Police Force, one
> assignment has become very urgent in t he past few weeks: Tracking
> down a little know man by name Chris Iyayi. Until recently a zonal
> head of the Federal Environmental Protection Agency in Port
> Harcourt, Rivers State, the environ mentalist is believed to be
> currently cooling his feet in England after allegedly setting the
> Central Bank of Nigeria back by over N600 million. CBN's loss,
> according to police investigation, was Pinacle Commerical Bank's
> gain. The bank's executive chairman before now was Macaulay Iyayi,
> elder bro ther to FEPA's Iyayi.
>
> Sources informed Theweek that Sani Abacha, the head of state, has
> waded into the matter by instructing the Sam Aluko led National
> Economic Intelligence Committee to dig into the issue. The head of
> state is said to have also instructed Ibrahim Coomasie, the
> inspector-general of police, to do eve rything possible to bring all
> the culprits to book. In compliance with the head of state's
> directive, the Federal Investigation and Intelligence Bureau is said
> to have been liaising with Interpol, the international police, on
> how the younger Iyayi could be repatriated back home to face the
> law.
>
> Information available to Theweek indicates that the scheme to
> defraud the CBN by the Iyayis may have started far back as July 1994
> when Chris started the zonal office of FEPA in Port Harcourt. He had
> rented Pinacle Commercial Bank's property for office and residential
> purposes. With that, a bus iness relationship was effectively
> established between FEPA and Pinacle, where Macaulay, the elder
> brother, held sway.
>
> For FEPA to be able to carry out its task of a pollution-free
> environment, an account was opened with the Port Harcourt zonal
> office of the Central Bank. FEPA's Port Harcourt zone account number
> with CBN was 485. For this account, according to Evans Aina,
> director-general of the agency, believe d to have been detained, the
> mandate given by the headquarters to CBN is that the limit of
> authority of Iyayi and his co-signatory is N50,000. Tony Ede, CBN's
> chief image maker, however told Theweek that no such mandate was
> given to the bank.
>
> Whoever may be telling the truth the Iyayis soon set to work in Port
> Harcourt. Documents available to Theweek showed that without
> clearance from the headquarters, the younger Iyayi between December
> 12, 1993 and August 7, 1996 issued a total of nine CBN cheques
> amounting to N1.115 billion in fav our of Pinacle Commercial Bank.
> Further investigation revealed that the CBN actually credited eight
> of these cheques, amounting to N620 million, to Pinacle while the
> last one for N495 million was stopped.
>
> Pinacle Commercial Bank, in whose favour the "dud cheques" were
> drawn, presented them to the CBN through the clearing house process
> and received full value for the eight cheques. By the time the CBN
> woke up from its slumber, Pinacle, through gross abuse of the
> clearing process, had overdrawn on
>
> its account to the tune of N786 million.
>
> Giving the background to the big scam, Paul Ogwuma, CBN governor, in
> a letter to Abacha, dated September 9, 1996 said that "CBN in Port
> Harcourt unwittingly collaborated with FEPA officials while
> believing that he was assisting a federal government agency in a
> legitimate transaction." That may be so. But the manner in which the
> deal went raises some questions which could lead an investigator to
> concluded that rather than collaborate unwittingly, Udanoh, the CBN
> Branch Controller, may have actively abetted a crime. For one, it
> baffles observers that after Iyayi had issued two of such che ques,
> each for N100 million on the 12th and 15th December 1995, and drawn
> by PCB, Udanoh wrote to FEPA's Iyayi last January 10, asking him to
> explain issues relating to cheques. What this implies is that by
> last January, Iyayi's cheques had become suspect. It is however
> surprising that between tha t month and April 8, six similar cheques
> to the tune of N420 million issued by Iyayi were cleared by PCB at
> CBN. This Udanoh acknowledged in his letter to Iyayi dated June 3,
> 1996. Said he: "we are surprised that from the date of our letter
> under reference January 10 to April 8, 1996, we have rece ived some
> more of your cheques amounting to N420 million.
>
> The million naira question is: why did CBN honour those Cheques? The
> question becomes more relevant when it is realised that FEPA never
> had up to N2 million at a time in its account 485. The view in
> financial circles is that it was not enough that, as he told the
> CBN, Chris Iyayi expected trans fers to the account from FEPA
> headquarters. As it turned out, no money came from FEPA
> headquarters, as none was promised Iyayi. Financial experts are
> surprised that the CBN acted only after the ninth cheque for N495
> million was to be drawn by Port Harcourt FEPA on August 8 in favour
> of PCB.
>
> In these deals, Aina may have been left to hold the short end of the
> stick. Although available evidence does not indicate that he
> connived with Iyayi, Aina's problem may not be over very soon. In
> his letter of October 12, 1996 to Idris Gidado, Secretary to the
> Government of the Federation and c hairman, FEPA Governing Council,
> Aina had made reference to Abacha's circular which states that
> directors-general will be held responsible for any financial loss in
> their establishments. With this circular, it may not matter whether
> Aina was an accomplice or not, since it has proved that FEPA as a n
> institution has been used to defraud the federal government.
>
> What is more, Aina's claim that the agency's mandate to CBN clearly
> stipulates that no zonal office can sign or draw any cheque above
> N50,000 limit remains a contentious issue. In a letter titled
> "Change of Authorised Operators/Endorsers Signatories" addressed to
> the Senior Manager, Mandate Off ice, Banking Operations Department,
> Central Bank of Nigeria, FEPA had appointed A.K. Yerima, Chris
> Iyayi, O.O. Sode and K. Ogbara as signatories to account 485. Two of
> the signatories, one of which must be zonal head, that is Iyayi,
> were authorised to sign cheques. Only Iyayi and Yerima had their
> signature specimens in the document.
>
> The letter dated June 24, 1994 and typed on a plain sheet and not
> the agency's letterhead paper, also stated in part that for N50,000
> and below, any two signatories could sign.
>
> If this letter is genuine, what it means is that contrary to Aina's
> claim, Yerima and Iyayi could sign for an amount over N50,000. By
> press time, Theweek could not determine the whereabouts of Yerima.
>
> Chris Iyayi, apparently aware of the seriousness of the issue at
> hand, has taken off. Interestingly, he is not denying issuing the
> dubious cheques. While replying to Udonah's letter Iyayi, in his
> letter dated June 14, 1996 said: "The cheques drawn in favour of
> Pinacle Commerical Bank were drawn
>
> with the hope that tranfers would have been made from my
> headquarters." Rationalising the issuing of the cheques Iyayi said
> further: "When I started off this zonal office in Port Harcourt in
> July 1994, we rented Pinacle Commercial Bank properties for office
> and residential purposes. We decided to
>
> purchase these properties which were fully furnished and so after
> negotiations, we agreed on installmental payments." He concluded by
> saying that it was in expectation of the transfers to the account
> No. 485 that he issued those cheques.
>
> Theweek investigations, however, revealed that Iyayi was not saying
> the whole truth regarding PCB's property in Port Harcourt. Last
> September Aina had set up a two-man team, comprising A. Adegoroye, A
> FEPA director, and one Okoye, a principal internal auditor, which he
> sent to Port Harcourt to look into the fraud matter. The team
> reported: "Meanwhile our two years tenancy for the FEPA office block
> owned by Pinacle Commercial Bank expired on August 31, 1996 and the
> bank has written to remind the agency to renew the tenancy being
> N1.4 million for the next two years as per the agreement." This
> contrasts sharply with Iyayi's claim that the agency has brought the
> rented PCB properties and that it was for the instalmental payment
> that the dud cheques were drawn in favour of PCB.
>
> Apparently foreseeing trouble, Chris Iyayi left Port Harcourt
> September 8, for Lagos with a promise to return to his base the
> following day. The next that was heard of Iyayi was a letter dated
> September 15, written from London, informing Aina that he had to
> make an urgent trip to attend to his "very sick son who has been
> hospitalised since September 3 1996."
>
> While Chris may be out of reach at least for now, Macaulay of PCB
> has not been that lucky. He was nabbed by the security agents at the
> airport while trying to leave the country. He has since remained a
> guest of FIIB men at Alagbon helping them to crack the N1.115
> billion mystery.
>
> Copyright 1996 Theweek. Distributed via Africa News Online. All
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> location, published or used for broadcast without prior written
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