The Economic and Financial Crimes Commission (EFCC) has filed charges against a cryptocurrency trading platform, Afriq Arbitrage System (AAS), and its CEO, Jesam Michael, over alleged investment fraud involving $844,416.36, $10,000, and N590 million.
The seven-count charge was revealed in the EFCC’s affidavit to show cause, presented before Justice Emeka Nwite of the Federal High Court, Abuja, on Tuesday, in response to Michael’s application for bail.
The EFCC alleged that Michael and his company, between September 2022 and June 2023 in Abuja, while not being a bank or an authorized entity to take deposits, invited the public through advertisements to deposit funds with Afriq Arbitrage System Limited.
This, according to the Commission, is in contravention of Section 44(1) of the Banks and Other Financial Institutions Act, 2020, and is punishable under the same Act.
EFCC Allegations and Arraignment Plans
The EFCC further accused Michael and his company of engaging in the specialized business of financial services, including investment management, without a valid license.
“That you, JESAM MICHAEL UBI, and AFRIQ ARBITRAGE SYSTEM LIMITED, between October and December 2024 in Abuja, within the jurisdiction of this Honourable Court, converted the cumulative sum of N590,000,000.00 (Five Hundred and Ninety Million Naira), being part of the funds generated from the sale of properties recovered from Oluwasesan Abayomi—namely, Ologolo Street, off Lekki-Epe Expressway, and No. 1 Nnamdi Azikiwe Road, Lakowe Golf Estate, Lekki, Lagos—knowing that the funds constituted proceeds of unlawful activity. You thereby committed an offence contrary to Section 18(2)(b) of the Money Laundering (Prevention and Prohibition) Act.”
“That you, JESAM MICHAEL UBI, and AFRIQ ARBITRAGE SYSTEM LIMITED, sometime in 2022 in Abuja, with intent to defraud, induced Ladi Musa Audu to deposit the sum of $844,416.36 USDT into the Afriq Arbitrage System investment scheme, under the false representation that the investment was safe and refundable upon request. You knew this representation to be false, thereby committing an offence contrary to Section 1(2) of the Advance Fee Fraud and Other Related Offences Act No. 14 of 2006 and punishable under Section 1(3) of the same Act.”
“That you, JESAM MICHAEL UBI, and AFRIQ ARBITRAGE SYSTEM LIMITED, sometime in February 2023 in Abuja, with intent to defraud, induced Sir Augustine E. Ibolo to deposit the sum of $10,000.00 USDT into the Afriq Arbitrage System investment scheme, under the same false assurances. This also constitutes an offence under the same Advance Fee Fraud Act,” the EFCC charges, filed by E.E. Iheanacho, SAN, partly read.
According to EFCC court documents, the anti-graft agency plans to call witnesses from financial institutions, the Central Bank of Nigeria (CBN), and the Securities and Exchange Commission (SEC) to testify that the defendants were not authorised to conduct specialized banking or solicit public investments without regulatory approval.
What transpired in court
At the bail hearing before vacation judge Justice Emeka Nwite on Tuesday, Emmanuel Agabi announced his appearance for Michael and the company, noting that he had filed a motion for bail.
- Mary Babatunde, counsel for the EFCC, responded that she had submitted an affidavit to show cause why Michael should not be granted bail, in accordance with the directive of Justice Obiora Egwuatu, to whom the original fundamental rights case was assigned.
- She noted that at the time Michael’s lawyers filed for bail, no formal charge had been filed.
However, she said the EFCC has since filed one dated April 16, 2024, and intends to arraign Michael once the case is assigned to a judge.
In its affidavit to show cause, seen by Nairametrics, the EFCC stated that Michael was arrested while attempting to leave the country and is unlikely to return to face trial due to the gravity of the charges and the weight of evidence.
- The Commission argued that no number of sureties could ensure his attendance in court.
“The temptation to jump bail is high, especially now that the charges have been filed,” the EFCC’s statement read.
“The EFCC has also received additional petitions from several other victims of the applicants’ alleged offences.”
Agabi argued that the court could not proceed with arraignment, adding that his client had already been in custody for 90 days with both the police and the EFCC.
- The judge clarified that the matter was only assigned to him for the purpose of hearing the bail application.
- Agabi further submitted a further affidavit in support of his client’s release, stating that the nature of the alleged offence should not be grounds for denying bail.
Babatunde informed the court that she needed more time to respond to the further affidavit, which she had only received that same morning.
Justice Nwite subsequently adjourned the matter to Monday, April 24, for the bail hearing, noting that the EFCC requires time to respond adequately.
