Igbinedion Loses Lawsuit To Reclaim N3.3 Billion Lost To Venezuelan Fraudsters

By PremiumTimes

A legal bid by a former governor of Edo State, Lucky Igbinedion, to recover N3.3 billion he lost to Venezuelan fraudsters in a weird oil deal, has been quashed by a United States District Court.

The 2006 transaction, facilitated by former Venezuelan Ambassador, Enrique Arrundell, was enmeshed in a pile of intrigues so deep that the court ruled that the deal might not even have happened in the first place.

According to the court, beyond evidence of money transfers to New York and Swiss bank accounts, very little about the deal can be “established with any certainty.”

Part of the messy details surrounding the deal was the less-than-wholesome involvement of Nigerian oil and gas heavyweight, MRS Oil and Gas Limited, at a time when it had not even commenced business.

MRS is owned by Sayyu Dantata, cousin of Africa’s richest man, Aliko Dangote, who is also believed to own up to 20 percent of the company.

In 2006, through his now defunct company, Skanga Energy and Marine Limited, Mr. Igbinedion, while still a sitting governor, tried to make a killing from the lucrative but fraud-tainted oil importation business. Mr. Igbinedion instructed his old secondary school friend and front, Chris Imoukhuede, to approach Mr. Arrundell to help pave way for the company to procure diesel and PMS from Venezuela.

Mr. Imoukhuede was the chief executive officer of Skanga at the time.

Mr. Arrundell on his part introduced Mr. Imoukhuede to a suspected Venezuelan conman, Francisco Gonzalez, who claimed that his fraudulent company, Arevenca, was a registered agent for Venezuela’s state-owned oil company, Petroleos De Venezuela S.A (PDVSA).

After several months of scheming that involved exchange of emails in broken English, dodgy shipping documents, and trips to Caracas, Mr. Igbinedion thought he was getting a deal made in heaven.

In fact, during one of such trips to Caracas in January 2007, the mustachios politician was ostensibly handed the key to the city of Caracas and announced as the “Alcaldía de Libertador”, the honorary Mayor of the central Caracas borough of Libertador in an elaborate event garnished with lavish dinner and expensive wine and attended by powerful Venezuelans.

The breakdown of the deal looked as glamorous: Averenca would initially send 35,000 metric tons of AGO to Skanga and later up it to three cargoes monthly. All that was required was for Skanga to pay for the freight and make partial payment for the consignment. It was only required to make full payment after three months of taking delivery of the full shipment.

Mr. Igbinedion authorised the transfer of about $22 million to Averenca’s Swiss and New York accounts. The consignments were supposed to be delivered in two ships – Digniti and Ventur. The shipments never arrived. The Nigerian Port Authority said it does not have any record of “Digniti” or “Ventur” entering Nigerian waters at the time it was billed to arrive.

PREMIUM TIMES investigation also revealed that there are no vessels named “Dignitii” or “Ventur”. Searches on Lloyds directories and other ship directories showed that the ships never existed anywhere in the world.

After it dawned on him that he had been duped, Mr. Igbinedion instituted a $600 million lawsuit against PDVSA arguing that Arevenca was its agent and thus PDVSA was liable for the actions of its agent.

Strangely, for a company that was duped such a huge amount of money, Skanga approached the suit in a near comical manner. Its lawyers put forward mediocre arguments. At one point, it even provided evidence that indicated that it might have forged its audit report.

Two reputable American law firms it initially contacted to handle the case left after being owed retainer. One of them, Robert Dunne LLC, quit because of the inability of Mr. Igbinedion’s Skanga to pay fees as low as $3,800.00 (N627, 000).

David Burger, a lawyer with the law firm of Robinson Brog, which was Skanga’s original law firm in the suit, said in a an affidavit before ditching the case that his firm had to withdraw following “the continued inability of my firm to have any adequate direct communication with Skanga, with delayed and inadequate communications only relayed through a two lawyer firm Located in Mississippi”.

Strangely, despite Skanga’s tenacious legal action against PDVSA, for some reasons only Mr. Igbinedion and Mr. Imoukuede can answer, it did not serve Arevenca or Mr. Gonzalez notice of the lawsuit, despite listing them as defendants.

Mr. Imoukuede told PREMIUM TIMES to contact the company’s lawyer for comment.

Neither Mr. Igbinedion nor his counsels, Olufemi Salu, a personal injury and car accident expert of a two lawyer firm Salu and Salu based in Mississippi-Tennessee, responded to phone calls, emails and text messages asking for their side of the story.

Oral Agreement

Denise Cote, the US District Court Judge, dismissed the lawsuit primarily because Skanga could not present any document that it actually entered a deal with Arevenca.

In fact, the freight documents Skanga claimed it received from Arevenca were so amateurishly forged that it would beat the most gullible mind why Skanga didn’t become suspicious when it was presented to it.

Mr. Imoukuede told the court that the multi-million dollar deal was not documented but sealed orally after a meeting with Mr. Arrundell and Mr. Gonzalez in his Caracas hotel room.

The wieldy oil deal may not be a complete charade, as it seems. In fact, Skanga displayed strong intentions that it really wanted to buy petroleum products from PDVSA legitimately from the onset.

Court documents revealed that Mr. Imoukhuede approached the corporation and indeed held a meeting with PDVSA’s and Venezuelan Ministry of Energy and Mines officials on October 30, 2006 at PDVSA headquarters in Venezuela.

Mr Imoukhuede told Virginia Montilla of the Ministry of Energy and Mines and an analyst from PDVSA, Beatriz Dam, who were at the meeting with him that his “mission” for the trip was “to solicit petroleum products from PDVSA.”

Mr. Imoukuede was advised at the meeting to write a letter to the supply and commerce director of PDVSA if he wanted to do business with the corporation.

Neither fraudsters, Mr Gonzalez nor the diplomat, Mr. Arrundell, attended this meeting.

The next day. Mr. Imoukuede sent a letter to Asdrubal Chavez, an official of the corporation stating Skanga’s desire to “purchase Petroleum products from Venezuela to Lagos, Nigeria.”

PDVSA did not respond to the letter. The Judge observed that Mr. Imoukuede did not make reference to either Mr Gonzalez or Mr. Arrundell in the application.

Apparently unnerved by the lack of feedback from PDVSA, Mr. Imoukhuede arranged a quick meeting with Mr. Arrundell and Mr. Gonzalez in a Venezuelan hotel where Mr. Arrundell repeated his claim that for Skanga to do business with PDVSA, it has to do it through an agent and Arevenca was an approved PDVSA agent.

It was at this meeting that a multi-million dollar oil deal was sealed by words of mouth.

Not our agent

Ms. Cote ruled that as a holding company, PDVSA does not directly engage in the sale of Petroleum products. This function is handled by its subsidiaries, which deals with clients directly and not through an agent like Mr. Gonzalez and Mr. Arrundell told Mr Igbinedion and Mr. Imoukhuede.

In fact, PDVSA lawyers provided a screenshot of the corporation’s website of 2006 and 2007, the years the deal was struck, which reads: “Product sales take effect between the provider and the client directly, with no intermediaries (third parties, representatives, etc.).”

“A PDVSA official states in his affidavit that PDVSA neither had nor currently has any business relationship or relationship of any other kind with any legal entity called Arevenca S.A., Arevenca, or Arenera Venezolana C.A. all names of Mr Gonzalez’s spurious companies.

The official also asserted that PDVSA does not directly carry out commercial activities related to the purchase and sale or petroleum or refined hydrocarbons, and that such sales and purchases are performed by other subsidiaries authorised to do so, with the primary marketer being PDVSA Petróleo, S.A. The official further stated that “at no time since [he] began working at PDVSA has it or its subsidiaries marketed products through independent commercial agents.” He also added that ‘Venezuelan diplomats [are not] empowered in any way to speak on behalf of PDVSA or its affiliates.’

The judge said Skanga did not contest any of these claims.

A shell company and a curious “loan”

The judge also ruled that as at the time the deal was supposedly made, Skanga was basically a shell company with no history of transacting in any business.

“Imoukhuede became Chief Executive in ‘June or July’ of 2006. Prior to Imoukhuede’s arrival as Chief Executive, Skanga’s ‘business hadn’t started,’ and the company was ‘inactive.’ Skanga made annual filings with the Corporate Affairs Commission of Nigeria for the years 2006, 2007, and 2008, i.e., the years in which the alleged transactions occurred and the year in which Skanga instigated this lawsuit in New York Supreme Court. Each of those filings contains a statement from Skanga’s ‘Chartered Accountants’ ‘Dynamic Premier & Co.’ that Skanga ‘has not done any business, and as a result no profit or loss account has been annexed thereto’,” part of the judgment reads.

“Imoukhuede admits that Skanga had not engaged in any commercial transactions with any entity before the alleged transactions that led to this litigation.”

PREMIUM TIMES investigation also revealed that at different times between 2006 and 2007, Skanga used three different addresses all around the Ajose Adeogun axis of highbrow Victoria Island, Lagos.

One of the addresses, 206B, Muri Okunola Street, is abandoned with a takeover notice from the Lagos State government pasted on its gate. The other two are occupied by a hotel and a bank. A security guard, who claimed to have been working in one of the addresses for “years” told this reporter that he has never heard of the name Skanga Energy and Marine before.

When it seemed one had heard it all, the intrigues surrounding the deal spiralled into utter absurdity with the involvement of Mr. Dantata’s company, MRS Oil and Gas Limited.

During trial, Mr. Imoukhuede testified that Skanga couldn’t raise some of the money it needed to pay for the freight charges as agreed with Arevenca, so in December 2006 he took a “loan” of $2.8 million from MRS Oil and Gas Limited to make the payment.

However, annual corporate fillings of MRS in 2006 and 2007 presented by PDVSA’s counsels revealed that MRS had not even commenced business during the period and had total assets worth less than $12,000.

Ms. Cote wondered how a company with an asset of $12,000 could lend $2.8 million to another company.

Despite several attempts, including a visit to its Apapa headquarters and numerous telephone calls to its external affair department, MRS declined to comment. An employee of the company who identified herself as Chinwe, promised this reporter over the phone that the company would come out with a response the next day. That was two weeks ago and nothing has been heard from the company.

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Igbinedion Loses Lawsuit To Reclaim N3.3 Billion Lost To Venezuelan Fraudsters