Disgraced Maryland-based attorney Emeka Ugwuonye, who is at the center of a scam in which he illegally pocketed $1.55 million that belonged to the Nigerian embassy in the US, has suffered yet another legal setback. SaharaReporters has discovered that U.S. Bankruptcy Court for the District of Maryland issued an order on May 5, 2015 dismissing Mr. Ugwuonye’s bankruptcy petition.
Mr. Ugwuonye, who was found liable by a US Superior Court for embezzling $1.55 million belonging to the Nigerian embassy in the US, may have filed for bankruptcy in order to limit his financial liability to the embassy worth more than $2 million.
In 2013, US District Court judge, Barbara Rothstein, had ordered Mr. to immediately refund $1.55 million in tax refunds he stole from the Nigerian embassy in Washington, DC in 2007. Judge Rothstein also held Mr. Ugwuonye liable to a pre-judgment interest at a rate of 6% per annum. The total judgment against the shady lawyer totaled $2,075,131.30 as of July 12, 2013, the date of Judge Rothstein’s verdict.
Judge Rothstein had found Mr. Ugwuonye and his law firm liable for misappropriating $1.55 million in withheld taxes that the Internal Revenue Service (IRS) subsequently refunded to the benefit of the Nigerian embassy. The IRS had refunded the funds to the embassy via Mr. Ugwuonye who once represented the embassy and oversaw the sale of the embassy’s buildings in DC and surrounding areas. The tax was refunded because the embassy, as a sovereign entity, is not liable to pay American taxes.
The Bankruptcy Court dismissed Mr. Ugwuonye’s bankruptcy petition due to the lawyer’s failure to pay the $849 balance due on his filing fee. Mr. Ugwuonye’s bankruptcy petition is now deemed imperiled after more than ten days past since the order to complete payment. “We expect the court to declare a formal closure of the case,” said a lawyer who is familiar with the details of the case.
Mr. Ugwuonye can file a new bankruptcy proceeding, provided he pays the full filing fee. SaharaReporters also learned that a lawyer who represented Mr. Ugwuonye in the bankruptcy petition had filed a motion to withdraw his representation. Even though the Bankruptcy Court had denied the lawyer’s motion, the attorney would have no obligation to represent Mr. Ugwuonye should he file a new bankruptcy petition.
After SaharaReporters first exposed the $1.5 million embezzlement, Mr. Ugwuonye filed a defamation lawsuit against the website and several commentators on social media. He claimed that the Nigerian government owed him fees for unrelated legal work, adding that he was entitled to seize the embassy’s funds. But the Nigerian government officially denied that Mr. Ugwuonye was owed outstanding fees for any legal work.
Mr. Ugwuonye lost both his original defamation lawsuit against SaharaReporters as well as his appeal. In addition, Justice Rothstein ruled against him in a case filed by the embassy to recover its funds from the lawyer.
A lawyer representing the Nigerian embassy told SaharaReporters that his client intended to aggressively go after Mr. Ugwuonye’s assets in order to recover as much of the $2 million judgment as possible.