The Federal High Court in Abuja has faulted the Economic and Financial Crimes Commission (EFCC) for obtaining a freezing order against Micoz Bluelink Enterprise’s $163,592 domiciled in a Nigerian bank without concrete evidence or suspicion of fraud.
Justice Emeka Nwite delivered the verdict on Wednesday and quashed the freezing order.
The verdict followed an application filed by Akpasi Micheal Oziegbe (trading under the name and style of Micoz Bluelink Enterprise) against a freezing order of the court made on 9th September 2024, against its bank accounts.
What Transpired in Previous Proceedings
In EFCC processes exclusively seen by Nairametrics, Austin Chika Elem, an investigator with the Economic and Financial Crimes Commission, deposed in an affidavit that on 14th July 2022, Micoz Bluelink Enterprise’s account with UBA received an inflow of $163,592 from the law firm of Steve J. Mandel.
- Micoz Bluelink Enterprise was incorporated by the Corporate Affairs Commission (CAC) in 2021 to carry on the business of general trading and distribution, haulage, automobiles and spare parts, general merchandise, and general contracts.
- The investigator added that upon receipt of the $163,592 from the law firm, UBA Plc received a SWIFT callback message from Citi Bank, New York, where the funds originated.
According to Elem, “Citi Bank requested that the said funds be recalled on the grounds that the funds were related to ‘unjust enrichment’ and ‘fraudulent transfer,’ prompting UBA Plc to place a restriction on the account.”
- He further stated that UBA Plc subsequently transferred the funds to a suspense account at their headquarters, leading the applicant to lodge a complaint with the relevant institutions.
- As part of its ongoing investigation, the official said the EFCC wrote to the American Embassy, requesting information on the law firm of Steve J. Mandel in New York concerning the funds.
“The American Embassy is yet to respond to the letter,” he added.
- Additionally, the EFCC contacted the Federal Bureau of Investigation (FBI) to assist in investigating the allegations of unjust enrichment and fraudulent transfer.
“The FBI has commenced investigations but is yet to conclude,” Elem stated.
- The investigator emphasised that it had not been determined if the funds represented payment for miniature artefacts in ceramic form, as claimed by the applicant.
“The Respondent/Applicant has not provided any evidence before this Honourable Court to show that the funds were for the procurement of miniature artefacts in ceramic form,” he added.
Elem urged the court to uphold the freezing order granted on 9th September 2024, asserting that lifting the order would prejudice the EFCC’s ongoing investigation.
The Applicant’s Claim
The applicant, through its lawyers, Ojukwu Chikaosolu SAN and Adeyemo Dolapo Richard Esq., disagreed with the EFCC’s claims, arguing that the Commission’s allegations were false and aimed at misleading the court.
- The applicant stated in their filings, also seen by Nairametrics, that the callback request cited by the EFCC merely referenced “unjust enrichment” without providing further clarity.
- The company argued that the EFCC’s application to freeze the account was made in the absence of any concrete evidence.
“A person to whom miniature artefacts in ceramic form were supplied may believe that the artefacts are overpriced and may thus initiate a callback. Selling such artefacts at a high price does not constitute a criminal offence,” the applicant stated.
- The company accused the EFCC of fishing for an offence to justify its application to freeze the account.
“There is no reasonable suspicion to sustain the freezing order on the applicant’s account. The EFCC’s counter-affidavit does not demonstrate that the funds constitute proceeds of fraud,” the company argued.
- The company urged the court to set aside the order of 9th September 2024, stating that maintaining the freezing order without direct and cogent evidence of fraud or crime violated its rights to fair hearing and property, as protected by law.
What the Judge Said
Delivering the verdict, Justice Nwite agreed with the applicant’s counsel that, in the absence of any report by the bank indicating criminal evidence, the funds in the applicant’s account were not proceeds of crime.
The judge held that the EFCC “does not have any concrete or reasonable suspicion that an offence was committed by the applicant and merely sought the court’s order to punish the applicant, who, in fact, was the one who lodged the complaint.”
- He noted that the EFCC bore the burden of proving that its application to freeze the applicant’s account complied with the law but failed to provide evidence that the funds constituted proceeds of fraud or any crime committed either in Nigeria or elsewhere.
- Justice Nwite also observed that the EFCC did not rely on a criminal complaint, court order, charge, or indictment but merely sought to freeze the applicant’s account.
He further stated that perpetuating the order would amount to enabling the EFCC to violate the applicant’s rights to fair hearing.
“I hold that the application of the applicant is meritorious. I hereby declare that the funds in Micoz Bluelink Enterprise’s account with UBA are not proceeds of fraud, crime, or any unlawful activity,” he said.
The judge declared that the applicant is constitutionally entitled to access its funds, having not been proven to be involved in any crime.
Consequently, he discharged the freezing order made on 9th September 2024, which had authorised the EFCC to direct UBA to freeze the applicant’s domiciliary account.
What This Means
The court’s verdict implies that a request to freeze bank accounts by a party must be accompanied by credible suspicion or evidence such as a criminal indictment, among others.
