In a significant legal development, a Federal High Court in Lagos has ordered the final forfeiture of 2,041,087,747 units of shares in Livingtrust Mortgage Bank Plc, formerly known as Omoluabi Mortgage Bank Plc, worth approximately N6.67 billion. This decision marks a major victory for the Economic and Financial Crimes Commission (EFCC) in its ongoing efforts to combat financial crimes in Nigeria.
The assets ordered for forfeiture also include the sum of N42,461,096.66 and $26.44, which are traced to Cititrust Holdings Plc and its subsidiaries. These entities have been at the center of a high-profile investigation by the EFCC, which has accused them of involvement in a Ponzi scheme that defrauded investors.
The court order, which was delivered on Tuesday, followed a motion filed by EFCC counsel Ahmad A. Usman. The EFCC had earlier obtained an interim forfeiture order, and the final order was issued after a notice was published in a national newspaper, inviting any interested parties to come forward and present a case against the forfeiture.
The EFCC’s motion in court was centered around Cititrust Holdings and its subsidiaries, which are being prosecuted for allegedly running a Ponzi scheme using investor funds. According to the EFCC, Cititrust acquired the shares from the Osun State Government through special purpose vehicles (SPVs), later consolidating them under its name. These assets, according to the EFCC, were obtained using funds unlawfully gathered from investors.
During the court proceedings, Cititrust Holdings attempted to challenge the EFCC’s application. The company filed a motion and affidavit seeking to retain the forfeited assets. However, Justice F.N. Ogazi dismissed these arguments, upholding the position of the EFCC.
Justice Ogazi ruled in favor of the EFCC, granting the final forfeiture order for the assets and directing that the recovered funds be used to compensate the defrauded investors. The court further specified that any remaining balance after compensating the investors should be forfeited to the Federal Government of Nigeria.
This decision underscores the Nigerian judiciary’s commitment to enforcing laws designed to protect investors and ensure that those who engage in fraudulent activities are held accountable.
The Cititrust Ponzi scheme, which was allegedly masterminded by Cititrust Holdings and its affiliates, involved the pooling of funds from investors with promises of high returns. However, as is typical of such schemes, the promised returns were never delivered, and many investors lost their funds.
Ponzi schemes have become a significant issue in Nigeria, with several high-profile cases over the years. These schemes typically rely on new investors’ money to pay returns to earlier investors, creating the illusion of a profitable enterprise. However, once new investment slows down or the scheme collapses under its own weight, the investors lose their money.
The EFCC’s pursuit of Cititrust Holdings is part of the commission’s broader crackdown on financial crimes, including Ponzi schemes, money laundering, and other forms of investment fraud that exploit unsuspecting citizens. In its efforts to curtail these illegal activities, the EFCC continues to engage with the judiciary to ensure justice is served.
The court’s decision to order the forfeiture of assets and funds is a significant step in the fight against financial crime in Nigeria. However, the process of compensating defrauded investors will likely take time, as the EFCC will need to identify all affected parties and verify their claims.
In the meantime, the EFCC has assured that it will continue its investigations into other entities connected to the Ponzi scheme. There is also an ongoing effort to recover any additional assets linked to Cititrust Holdings and its affiliates.
This case highlights the importance of regulatory oversight in the Nigerian financial sector. The EFCC has made significant strides in holding financial criminals accountable, but challenges remain in protecting investors from fraudulent schemes. As Nigeria’s financial markets continue to grow, ensuring transparency and the protection of investors must be a top priority for both regulators and the judiciary.
The case also serves as a reminder to individuals and institutions to remain vigilant when investing, as the risk of falling prey to fraudulent schemes remains ever-present. With more stringent regulatory frameworks and better enforcement mechanisms, Nigeria aims to create a more secure investment environment for all stakeholders.
The final forfeiture of N6.6 billion worth of shares in Livingtrust Mortgage Bank is a landmark ruling in Nigeria’s ongoing battle against Ponzi schemes and financial fraud. As the EFCC continues its work to dismantle fraudulent enterprises, this case sets a strong precedent for future legal actions against financial crimes in the country. The ruling not only serves justice to the defrauded investors but also sends a clear message to individuals and companies engaging in illicit financial activities: the law will hold you accountable.