A suspicious activity report led U.S. prosecutors to a notorious African kleptocrat’s attempt to repatriate millions of dollars to his home country in violation of his prior settlement with the Justice Department, a senior official said.
Teodorin Obiang, Equatorial Guinea’s vice president since 2012 and son of the country’s longtime autocratic ruler, agreed in October 2014 to forfeit proceeds from the sale of his mansion in Malibu, California, a Ferrari 599 GTO and Michael Jackson memorabilia, including the late performer’s glove.
Obiang bought the assets through a network of law firms, legal entities and other intermediaries with hundreds of millions of dollars he embezzled over his two decades in various government positions, federal prosecutors claimed when seizing the properties 10 years ago.
By early 2021, with prosecutors and defense attorneys still squabbling over how to return the funds to Equatorial Guinea without further enriching the ruling regime, the Justice Department learned that Obiang had diverted $6.4 million in violation of his settlement, court records and public remarks by a senior U.S. official involved in the forfeiture case indicate.
“Through … banks having to report suspicious transactions, we discovered Obiang had actually transferred the money from his lawyers’ account to lawyers for the government of Equatorial Guinea,” Adam Schwartz, a deputy chief with the Justice Department, said at a virtual event on Sept. 30. “They were trying to get around providing these funds back to the people of EG.”
Obiang came into possession of the $6.4 million after attorneys acting on his behalf filed a lawsuit against Mauricio Umasky, a real estate broker based in Bel Air, California, who in June 2016 handled the court-ordered sale of the kleptocrat’s mansion at 3620 Sweetwater Mesa Road in Malibu for $33.5 million
Obiang’s attorneys alleged that Umansky breached his fiduciary duty to their client by selling the property to a developer with whom he had secretly partnered, then reselling it for more than $60 million the following March. The parties eventually settled the case for $6.4 million.
In December 2019, Obiang’s attorney obtained permission from the Justice Department to keep the $6.4 million in a trust account on condition that the funds would remain static until the parties agreed on how to spend them “for the benefit of the people of Equatorial Guinea,” prosecutors wrote in a 10-page memorandum on May 24 of this year.
“Unfortunately, rather than retain the $6.4 million in his trust account … counsel for Mr. Obiang Mangue took steps to disburse the funds without coordinating with the United States and in a manner inconsistent with the settlement agreement,” prosecutors claimed in the memorandum.
The Justice Department came to know of the deception in two steps.
First, Susan Stevenson, the U.S. ambassador to Equatorial Guinea, learned from the country’s foreign minister on Feb. 25 that Obiang had tried and failed to cash a $1.4 million check that would have drawn from the $6.4 million he won from the settlement.
After the check did not clear, Obiang’s attorney tried to transfer the full amount to Equatorial Guinea’s National Treasury by routing the funds through a trust account controlled by a second law firm representing the Guinean government’s interests in the U.S.
The May 24 memorandum does not specify exactly how the Justice Department was apprised of the attorney’s scheme to secretly move the funds to Equatorial Guinea, but Schwartz’ comments at the virtual discussion hosted by the Hudson Institute last month point to a SAR.
“I recognize … that the system sometimes allows people [suspects] to move money if the people [financial institutions] are not doing the reporting they are supposed to be doing,” Schwarz said at the event. “When the reporting does happen, hopefully we are able to combat this movement of money before it gets too far along the way to recover.”
On July 8, the U.S. District Court for Central California granted the Justice Department’s motion to formally extend the terms of the 2014 settlement to the $6.4 million Obiang won from the lawsuit that followed, and have the funds transferred to the government’s control.
Two months later, on Sept. 20, the department disclosed plans to provide the United Nations and a nonprofit group $26.6 million from the settlement to purchase and administer hundreds of thousands of COVID-19 vaccine kits to the people of Equatorial Guinea, as well as other medical goods and services.
Contact Valentina Pasquali at email@example.com
|Topics :||Anti-money laundering , Know Your Customer , Asset Forfeiture|
|Source:||U.S.: Department of Justice , Nonprofits/Private Organizations|
|Document Date:||October 25, 2021|