U.S. ANNOUNCES AGREEMENT WITH UNITED BANK FOR AFRICA
MICHAEL J. GARCIA, the United States Attorney for the
Southern District of New York, today announced an agreement (the
“Agreement”) resolving the criminal liability of UNITED BANK FOR
AFRICA PLC (“UBA”) relating to UBA’s obstruction, between 2000
and 2004, of the Government’s criminal and civil investigations
into money laundering of fraud proceeds through accounts held at
UBA, including an account in the name of Zamora Nigeria Limited
(“Zamora”). The Government civilly forfeited more than $5
million in fraud proceeds from that account in December 2003.
The Agreement provides that UBA will not be prosecuted
for any crimes (except possibly criminal tax violations) related
to its participation in obstructing the criminal and civi
investigations. The Agreement further provides that UBA will
forfeit $5,334,331, representing proceeds of fraud laundered
through a Zamora account at UBA, and that UBA will continue to
cooperate with the Government.
UBA’s Offending Conduct
UBA acknowledged, in a statement of facts that is part
of the Agreement entered into today, that it took the position,
in response to inquiries made by the Government in both civil and
criminal investigations, that UBA and Zamora were unrelated,
independent entities. In support of that position, UBA
intentionally created and then supplied to the Government certain
fake, backdated documents, which had the effect of substantially
obstructing the Government’s investigations. Specifically, in
2000, after being informed of the Government’s investigation, UBA
created and produced to the Government certain phony, backdated
letters purporting to reflect the resignation in March 1998 of an
individual who was actually on the payroll of UBA from 1997 until
2000, and who simultaneously held the position of General Manager
at Zamora between March 1998 and 2000. During the same time
period, UBA and Zamora in fact had a close financial and business
relationship: among other things, expenditures and personnel
actions of Zamora were routinely approved by UBA officials.
The Original Government Investigation
In or about late 1999, the United States Attorney’s
Office and the United States Secret Service began a civil
forfeiture investigation into possible money laundering through
the Zamora account, which account was opened in UBA’s New York,
New York branch in March 1998. The Government alleged that the
account had been used to launder the proceeds of fraudulent
activity. In January 2000, the Government seized, and in 2003
ultimately forfeited, in excess of $5 million from that account,
on the grounds that the Zamora account had been used to
facilitate the transmission of at least that amount of the
proceeds of various fraud schemes in which victims were
fraudulently induced to send monies to Nigeria. In turn, those
funds were restored to victims of various fraud schemes.
Shortly after the commencement of the civil case, a
grand jury in the Southern District of New York began a related
criminal investigation. The Government issued subpoenas and
official requests for information to UBA in connection with those
investigations, seeking to learn what relationship, if any,
existed between UBA and Zamora during the period from 1998 to
early 2000. It was in response to those inquiries that UBA
asserted, from 2000 to at least 2004, that UBA and Zamora were
and had always been separate and completely independent entities.
In connection with that claim, UBA provided to the Government the
phony, backdated resignation documents described above.
The Investigation by the Central Bank of Nigeria
In 2004, the Central Bank of Nigeria (“CBN”), as a
result of its own investigation into the relationship between UBA
and Zamora, concluded that UBA had violated various provisions of
the Nigerian Banks and Other Financial Institutions Act of 1991
(the “BOFIA”), and imposed upon UBA civil penalties totaling 93
million Naira -- or approximately USD $700,000.Contemporaneously, several members of UBA’s Board of Directors,including UBA’s then Chairman of the Board, as well as the then Managing Director of UBA’s subsidiary, UBA Capital & Trust,
resigned from their respective offices at UBA. Those former directors no longer have any position of control at UBA.
The Change in Management and Directorship at United Bank for Africa in 2005 Following the departure of the then-Chairman and the other board members, UBA operated under interim, replacement management until July 2005, at which point UBA merged with another Nigerian bank, which was at the time known as Standard
Trust Bank Plc. After the merger, the new, combined bank,operating under a new Board and management and new controlling shareholders, kept the name UBA. It is this new UBA management and new Board with which the Government has negotiated and reached the Agreement.
The Decision to Enter Into a Non-Prosecution Agreement
The Government’s decision to enter into the non-
prosecution agreement took into account, among other factors:
(1) UBA’s cooperation, since the arrival of new management and directorship in 2005, with the Government’s continuing investigation, by, among other things:
(a) making and assisting in making available for interview multiple witnesses, both from within the United States and from Nigeria,
(b) providing certain documentation from international
locations that the Government would not otherwise
have been able to obtain in a reasonably timely
fashion, and
(c) providing detailed explanations for UBA’s transactions;
(2) UBA’s commitment to continue to cooperate;
(3) UBA’s remedial actions, including
-(a) the agreement by UBA’s New York Branch, in January 2007, to the entry of a Consent Order (the “Consent Order”) with the Office of the Comptroller of the Currency (“OCC”) (to which UBA’s New York Branch is principally subject for federal regulation and examination) relating to the implementation of reforms of the New York Branch’s operations and internal controls to assure present and continuing compliance with the Bank Secrecy Act, which Consent Order includes,among other things, substantial restrictions on affiliate transactions and transactions with UBA insiders such as executive officers, directors and shareholders,
-(b) UBA’s undertaking of a detailed and searching
review of the New York Branch’s internal anti-money laundering controls and operations by outside auditors, consultants and legal counsel,and its adoption of a detailed plan of reforms that UBA has worked to implement and institutionalize, in accordance with the terms of the Consent Order,
(c) UBA’s hiring of a new Compliance Officer for the
New York Branch, its addition of three full-time
compliance staff to bolster the Branch’s
compliance capabilities, and its engagement of an
independent audit firm to address internal audit
and control issues,
(d) UBA’s enhancement of the customer due diligence
capabilities of the New York Branch through, among
other things, implementation of new, computerized
transaction monitoring software designed to track
suspicious activity,
(e) UBA’s confirmation that the former Chairman is now
divested of any holding of ownership of UBA, and
(f) the agreement by the New York Branch, on May 2,
2007, to the assessment by the OCC of a $500,000
civil money penalty;
(4) the absence of any evidence of similar misconduct by
UBA since new management took over in 2005; and
(5) the consequences that a criminal indictment could have
upon the ongoing operations and employees of UBA.
In light of the above, and after careful balancing of
all the factors set forth in the Department of Justice’s
“Principles of Federal Prosecution Business Organizations,” the
Office has concluded that criminal prosecution of UBA is not
necessary to serve the public interest.
Mr. GARCIA praised the investigative efforts of the
United States Secret Service in this case.
This investigation is being handled by the Major Crimes
Unit of the United States Attorney’s Office. Assistant United
States Attorney DAVID M. SIEGAL is in charge of the
investigation.
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