The Economic and Financial Crimes Commission (EFCC) has filed criminal charges against Afriq Arbitrage System (AAS), a cryptocurrency trading firm, and its Chief Executive Officer, Jesam Michael Ubi. The charges, which allege large-scale financial fraud, include accusations of illegal fundraising, deception, and money laundering involving over $844,000, an additional $10,000, and N590 million.

The charges, detailed in a seven-count affidavit submitted to the Federal High Court in Abuja, were presented before Justice Emeka Nwite on Tuesday. The affidavit was filed in response to a bail request made by Jesam Michael’s legal counsel.

EFCC Accuses Afriq Arbitrage of Illegal Fundraising

According to the EFCC, between September 2022 and June 2023, Jesam Michael and his company solicited public investments through promotional campaigns without being licensed to accept deposits or offer banking services. This alleged conduct directly violates Section 44(1) of the Banks and Other Financial Institutions Act (BOFIA) of 2020, which restricts deposit-taking activities to duly licensed institutions.

The anti-corruption body argues that Michael and his company engaged in financial activities such as investment management and advisory services without securing authorization from regulatory agencies like the Central Bank of Nigeria or the Securities and Exchange Commission.

Details of Alleged Financial Crimes

In the charge documents, the EFCC alleges that Jesam Michael and Afriq Arbitrage System Limited laundered funds amounting to N590 million, which were traced to properties recovered from one Oluwasesan Abayomi. These assets included a residence on Ologolo Street off Lekki-Epe Expressway and another at No. 1 Nnamdi Azikiwe Road within Lakowe Golf Estate, both located in Lagos.

The commission claimed the defendants knowingly utilized the proceeds of these assets in violation of Section 18(2)(b) of the Money Laundering (Prevention and Prohibition) Act.

Additionally, Jesam Michael is accused of inducing individuals to invest in his crypto trading scheme under false pretenses. Specifically, in 2022, the EFCC says he lured one Ladi Musa Audu into transferring $844,416.36 in USDT to the AAS platform, assuring him that the investment was secure and could be withdrawn at any time. The EFCC argues this claim was knowingly deceptive and constitutes a breach of Section 1(2) of the Advance Fee Fraud and Other Related Offences Act of 2006, punishable under Section 1(3) of the same law.

Similarly, in February 2023, Michael allegedly used similar tactics to persuade Sir Augustine E. Ibolo to invest $10,000 into the scheme—an act the Commission describes as another clear case of financial fraud.

EFCC to Call Witnesses from CBN, SEC, and Banks

According to court filings, the EFCC intends to call expert witnesses from top regulatory institutions, including the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC), to testify that Jesam Michael and Afriq Arbitrage System operated without any official license or approval to conduct investment-related services.

The Commission emphasized that the company was never registered as a financial institution, nor was it authorized to solicit funds from the public for investment purposes.

Courtroom Proceedings: Bail Application and EFCC Opposition

During Tuesday’s session, which was overseen by vacation judge Justice Emeka Nwite, lead defense counsel Emmanuel Agabi appeared on behalf of Jesam Michael and his firm. He announced that he had submitted a formal request for bail.

EFCC’s legal representative, Mary Babatunde, responded by informing the court that she had submitted an affidavit opposing the bail application. This was in compliance with an earlier directive issued by Justice Obiora Egwuatu, the original judge assigned to the fundamental rights case before it was transferred for the bail hearing.

Babatunde noted that although the defense had filed for bail before formal charges were entered, the EFCC has now officially lodged the case, dated April 16, 2024, and intends to proceed with arraignment once a permanent judge is assigned.

EFCC Flags Flight Risk as Primary Bail Concern

In its affidavit, the EFCC disclosed that Jesam Michael was apprehended while attempting to leave Nigeria. The Commission voiced strong concerns that he poses a serious flight risk, given the magnitude of the charges and the considerable evidence gathered against him.

“The likelihood of the defendant fleeing the country remains extremely high, especially now that he has been formally charged,” the EFCC stated.

The Commission further argued that no amount of sureties could reasonably guarantee Michael’s presence in court. It also revealed that more victims have come forward with fresh complaints, increasing the weight of the case against him.

Defense Argues Continued Detention Is Unjustified

Emmanuel Agabi pushed back strongly against the EFCC’s stance, arguing that his client had already spent 90 days in detention, first with the Nigerian Police and then with the EFCC. He maintained that under Nigerian law, the nature of the offense should not automatically disqualify someone from being granted bail.

He also filed a supplementary affidavit urging the court to consider the principle of presumption of innocence until proven guilty, which he said should guide the judge’s decision.

Hearing Adjourned to April 24

Justice Emeka Nwite clarified that he had only received the case on a temporary basis to hear the bail motion and was not assigned to oversee the main trial. He noted that EFCC’s counsel needed additional time to respond to the new affidavit submitted by the defense earlier that morning.

Consequently, the judge postponed the bail hearing to Monday, April 24, 2024, to allow both parties to present their full arguments.