US court orders release of seized $6 million arms funds to Nigeria

Nigeria has won a prolonged legal battle to recover over $6 million in arms funds that had been seized by the United States government since 2014.

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The funds were seized about a decade ago from an arms broker, who was trying to supply military equipment from the US to Nigeria without having the necessary licence.

The US government said the arms broker’s active involvement in the sale, export, and supply of military products to Nigeria without authorisation was a violation of the Arms Export Control Act, leading to the seizure of the funds.

However, in a ruling on 23 December, the US District Court for Eastern California ordered the release of the funds totalling about $6.02 million after confirming Nigeria’s interest in it.

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A copy of the ruling seen by PREMIUM TIMES shows that Judge Jenniffer Thurston issued a permanent order of forfeiture of the money in favour of Nigeria, modifying the earlier January 2020 preliminary order forfeiting the assets to the US government.

The judge ordered the US government to release the money with the accrued interests to the Nigerian government within 60 days.

“Within sixty (60) days from entry of this Stipulation for Final Order of Forfeiture and Order Thereon, the US Customs and Border Protection shall return the above-listed assets to Petitioner, along with any interest earned by the United States while on deposit in an interest-bearing account,” a copy of the court order seen by PREMIUM TIMES read.

Seizure

Until the judgment, Nigeria faced a double whammy, having paid agents for the purchase of military equipment during the peak of the Boko Haram insurgency in 2014, but receiving neither the funds nor the equipment it intended to purchase.

Nigeria paid the $6.02 million trapped in the US to an American arms broking firm, Dolarian Capital Inc (DCI).

Some of the funds passed through an arms broker from Niger Republic, Hima Aboubakar, who secured dubious defence contracts from the Nigerian government, highlighting the widespread irregularities, secrecy and misuse that often characterise arms procurement funds in Nigeria.

The deal ran into a roadblock in August 2014 when the US government denied Mr Dolarian’s application for approval to purchase and export the arms to Nigeria. As of that time, Mr Dolarian had received the money for the purchase of arms for Nigeria.

The US government seized the money, describing it as the proceeds of a violation of its Arms Export Control Act, on the grounds that Mr Dolarian and his DCI did not have the licence to engage in the sale, export, import and brokering of military products at the time.

At the instance of the US government, the US District Court in Eastern California issued on 2 February 2015 warrants for the seizure of the money held in five different bank accounts.

In June 2015, the US government applied to the US district court in Eastern California for an order forfeiting the funds.

The US government secured the court’s preliminary order of forfeiture of the assets in 2019.

It also charged Mr Dolarian, who subsequently pleaded guilty to the charge of brokering the sale of military equipment without a licence.

On 29 January 2020, the court issued a modified preliminary order for forfeiture of the money after Mr Dolarian pleaded guilty to the charge against him.

Meanwhile, the US government publicised the preliminary forfeiture order inviting anyone with an interest in the funds to come forward to claim it in court.

Only the Nigerian government heeded the call to claim the money. But its lawyers faced subtle resistance from the US government, which prolonged the legal process before formally acknowledging Nigeria’s interest and conceding to release the funds late this year.

Nigeria’s recovery efforts

After the criminal proceedings concerning the funds in the US ended, Nigeria began to take steps to recover the money in 2021 when it hired a US-based lawyer, Jovi Usude, to handle the legal process.

From 2021 through to early 2023, Mr Usude exchanged correspondences with the US government’s lawyers over the matter, but could not get a clear coast to file for the recovery of the seized assets.

Finally, on 2 June 2023, the Nigerian government started the court process for the recovery by filing a petition for an ancillary proceeding asserting it had a superior interest in the forfeited funds.

Its petition also explained that it did not know that Mr Dolarian lacked the requisite US government’s State Department approval necessary to broker the sale of military equipment.

Accordingly, Nigeria’s petition urged the court to enter a final order of forfeiture that reflected its superior interest in the funds forfeited by Mr Dolarian in the preliminary order of forfeiture.

US government’s concession

After a long-drawn back-and-forth, the US government finally signed on 19 December, a stipulation for a final forfeiture order of the assets in favour of the Nigerian government. Nigeria’s lawyer had signed the document on 29 August.

The document signed by Kevin Khasigian, an Assistant United States Attorney, was filed in court on 22 December, confirming Nigeria’s interest in the money.

After reviewing Nigeria’s petition and records from the criminal investigation, the US government acknowledged that Nigeria had “a legal right, title, or interest” in the assets.

As a result of this, the document added, “such right, title, or interest requires the court to enter a Final Order of Forfeiture”, to reflect Nigeria’s “superior interest”.

Court order for permanent forfeiture in Nigeria’s favour

The filing paved the way for Judge Thurston to issue an order of permanent forfeiture of the funds in favour of Nigeria on 23 December.

The court ordered the US Customs and Border Protection to release the money to the Nigerian government through Mr Usude’s law office’s Client Trust Account.

It ordered the US government to release the money within 60 days.

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Nigeria and arms purchase controversies

Nigeria made the $6.02 million payments at a period characterised by widespread irregularities in the award of defence contracts and diversion of funds allocated for the purchase of arms to fight Boko Haram.

Under similar circumstances fuelled by irregularities in the use of arms funds in Nigeria during the period, the South African government seized Nigeria’s $5.7 million paid to Cerberus Risk Solutions, a South African brokerage firm. The seizure was attributed to the company’s lack of a valid arms licence, mirroring controversies regarding Nigeria’s funds seized in the United States around the same period.

An audit committee set up in 2015 by the then-President Muhammadu Buhari administration to review arms contracts awarded since 2007 provided greater details of the misuse of arms funds. It found that the then-National Security Adviser (NSA), Sambo Dasuki, could not account for about $2 billion in arms funds entrusted to his care in 2014.

Further investigations by the Economic and Financial Crimes Commission (EFCC) discovered how the NSA’s office, overseen by Mr Dasuki, allegedly doled out arms funds entrusted in its care to officials of the ruling Peoples Democratic Party (PDP) as the 2015 general elections approached. Some friends and cronies of Mr Dasuki also received funds from the NSA under questionable circumstances during the period. Mr Dasuki and others are still facing trial over their use of the arms funds.

Confirming the widespread diversion of the arms funds, the government of Jersey Island announced the recovery of Nigeria’s $8.9 million looted through phoney defence contracts between 2014 and 2015.