Legalpedia Citation: (2023-07) Legalpedia 04741 (SC)

In the Supreme Court of Nigeria

Fri Jul 7, 2023

Suit Number: SC.CR/900/2022

CORAM

JOHN INYANG OKORO JUSTICE OF THE SUPREME COURT OF NIGERIA

UWANI MUSA ABBA AJI JUSTICE OF THE SUPREME COURT OF NIGERIA

IBRAHIM MOHAMMED MUSA SAULAWA JUSTICE OF THE SUPREME COURT OF NIGERIA

ADAMU JAURO JUSTICE OF THE SUPREME COURT OF NIGERIA

EMMANUEL AKOMAYE AGIM JUSTICE OF THE SUPREME COURT OF NIGERIA

PARTIES

PETER NWAOBOSHI APPELANT(S)

 

APPELLANTS

1. FEDERAL REPUBLIC OF NIGERIA
2. GOLDEN TOUCH CONSTRUCTION PROJECT LIMITED
3. SUIMING ELECTRICAL LIMITED RESPONDENT(S)

 

RESPONDENTS

AREA(S) OF LAW

APPEAL, CONSTITUTIONAL LAW, CRIMINAL LAW AND PROCEDURE, EVIDENCE, PRACTICE AND PROCEDURE

SUMMARY OF FACTS

The 3rd Respondent secured a loan facility from Nigerian Export-Import Bank (NEXIM Bank) in the sum of N1.2 Billion for the purpose of buying equipments and provision of working capital for the establishment of electrical and plastic factory at Asaba, Delta State. Upon securing the loan at the interest rate of 14% per annum which tenure was for 5 years commencing from February, 2014, the 3rd Respondent transferred N322 Million Naira therefrom to Delta State Government account domiciled with Sterling Bank Plc., as part payment for Guinea House, Marina Road, Apapa-Lagos, purchased by the 2nd Respondent, which property the Delta State Government had previously agreed to sale at the price of N805 Million Naira. At the time of the loan agreement, the Appellant was a member Board of Directors of Nigerian Export-Import Bank (NEXIM Bank) and also the alter ego of both the 2nd and 3rd Respondents.

On 22-2-2016, one comrade Prince Kpokpogri on behalf of a group called Anti-Corruption and Integrity Forum, wrote a petition to the Chairman of the Economic and Financial Crimes Commission (EFCC), accusing the appellant of the commission of money laundering and several financial offences and calling for an urgent and dispassionate investigation of the accusation. The EFCC investigated the allegations in the petition and decided to prosecute the appellant for the commission of money laundering. As a result, the criminal case leading to this appeal was commenced against him and the 2nd and 3rd respondents.

The trial Court rendered its judgment holding that the prosecution did not prove its case against the defendants, acquitted and discharged them.

Dissatisfied with this judgment of the trial Court, the prosecution filed a notice of appeal in the Court of Appeal against it. The Court of Appeal set aside the judgment of the trial Court and found two (2) of the accused parties guilty for the offences of money laundering contrary to Section 15 (2)(d) of the Money Laundering (Prohibition) Act, 2011 and the third accused guilty for the offence of Conspiracy contrary to Section 18(a) of the Money Laundering (Prohibition) Act, 2011. They were convicted and sentenced accordingly.

Not unexpectedly, the judgment of the Court below has apparently not gone down well with the Appellant, thus the instant appeal.

HELD

Appeal allowed

ISSUES

1. Whether the Court below misapprehended the provisions of the Money Laundering (Prohibition) Act 2011 when it convicted and sentenced the appellant to seven years imprisonment for Money laundering?
2. Whether the Court below was in error to apply the principles of law in Anyasodor V The State, Koku V The State (and other cases) to overrule the decision of the Learned trial Judge concerning the evidence of PW4?
3. Whether in the absence of a ground of appeal or issue for determination complaining of the rejection in evidence by trial Court of Exhibit R1 series the Court below was wrong to admit in evidence and rely on the Exhibit R1 series to convict the appellant?
4. Whether the Court below was in error to hold, contrary to the decision of the trial Court, that there was credible and overwhelming evidence in proof of the essential ingredients of the charge of money laundering to warrant the appellant’s conviction and sentence for Money Laundering?

RATIONES DECIDENDI

MONEY LAUNDERING – FOR THE OFFENCE OF MONEY LAUNDERING TO EXIST

For the offence of money laundering to exist, the primary fund or property from which derives the money in question or other transactions, must have been obtained by committing a crime. If it is lawfully obtained as in this case, money laundering cannot exist on the basis of such lawfully acquired fund. See Daudu V FRN (2018) 10 NWLR (PT. 1626) 169 at 182 (SC), FRN V Ibori (2014) 13 NWLR (Pt. 1423) 168 @ 210(SC) and Kalu V FRN (2014) 1 NWLR (Pt.1389) 479 @ 533. – Per E. A. Agim, JSC

CHARGE – WHETHER A PERSON CAN BE VALIDLY CONVICTED OF AN OFFENSE HE WASN’T CHARGED WITH, TRIED OR AFFORDED A HEARING

Except as provided in Ss. 223 to 231 of the Administration of Criminal Justice Act 2015, a person cannot be validly convicted of an offence for which no charge was brought against him and in respect of which he or she was not tried and afforded a hearing. Such a conviction violates the appellant’s right to fair hearing given him by S.36(4), (5) and (6) of the Constitution of the Federal Republic of Nigeria 1999. It is therefore unconstitutional, illegal and void. In Abbas Jibrin V The State (judgment delivered on 4-6-2021 in Appeal No. SC.1311/2018) this Court held that “A formal charge as prescribed in S.200 of the Criminal Procedure Code Law is a requirement of jurisdiction and fair hearing. In the absence of such a charge, the Court would lack the jurisdiction to try a person for an offence in respect of which he has not been charged with committing. The existence of such a charge is a condition precedent to the valid exercise of jurisdiction to try him for any offence.” Just as the Court has no jurisdiction to try a person for an offence with which the person has not been charged before it, a Court has no jurisdiction to convict him for an offence for which the person has not been charged and or tried, except as provided by legislation.  – Per E. A. Agim, JSC

LOAN – WHETHER DIVERTING A LOAN FOR OTHER USE THAN THAT STIPULATED IN THE LOAN AGREEMENT CONSTITUTES A CRIME OR AN OFFENCE

Secondly, there is no law that a recipient of a loan from a bank or other person commits an offence if the loan sum or part of it is diverted to a use other than that stipulated in the loan agreement. Therefore the diversion of part of the loan sum to purchase a house in breach of a term in the loan agreement to use the loan “exclusively for carrying out the project approved by NEXIM Bank” is not a crime known to law. Such act is not a money laundering crime as created and defined by Ss. 14(1)(a), 15(2d) and (6) of the Money Laundering (Prohibition) Act 2011. See Daudu V FRN (supra), FRN V Ibori (supra) and Kalu V FRN (supra). – Per E. A. Agim, JSC

CONVICTION – WHETHER A PERSON CAN BE CONVICTED ON ACCOUNT OF AN ACT OR OMISSION THAT IS NOT MADE A CRIME BY ANY WRITTEN LAW

The conviction violates the appellant’s fundamental right not to be convicted of an offence on account of an act or omission that is not made a crime by any written law. This right is given to him by S.36(8) of the 1999 Constitution which provides that “No person shall be held to be guilty of a criminal offence on account of any act or omission that did not, at the time it took place, constitute such an offence…” and 36(12) which provides that “Subject as otherwise provided by this Constitution, a person shall not be convicted of a criminal offence unless that offence is defined and the penalty therefore is prescribed in a written law and in this sub-section, a written law refers to an Act of the National Assembly or a Law of a State, any subsidiary legislation or instrument under the provisions of law.” This Court in Chief Olabode George V FRN (2013) LPELR-21895(SC) applied these provisions to quash a trial and conviction for violating such provisions. Similar constitutional provisions were applied by this Court in FRN v. Ifegwu (2003) 15 NWLR (Pt.842) 113 @ 216 to quash a trial and conviction for violating such provisions. – Per E. A. Agim, JSC

LOAN – THE EFFECT OF A FAILURE TO REPAY A LOAN

Assuming the entire loan and interest had remained unpaid, the non-payment cannot support a case of fraudulent conversion or diversion of part of it to do something outside what the loan was meant for. The failure to repay a loan or any part of it contrary to a loan agreement creates a debt recoverable by civil proceedings and not by criminal proceedings. In Onagoruwa V The State (1993) 7 NWLR (Pt 303) 49 @ 97, Tobi JCA (as he then was) held that: – “While a breach of the earlier agreement with Wema Bank cannot be ruled out, it is not my understanding of the law that such a breach ripens into criminality on the part of the appellant. There is no law known to me where a breach of an agreement between two parties, which has no element of criminality, can result in a criminal charge and subsequent conviction. At best, it can be a breach of a contractual relationship which the criminal law lacks legal capacity or competence to enforce and punish.” The failure to repay a loan or any part of it contrary to a loan agreement does not create a basis for reasonable suspicion that a crime has been committed by the debtor and is not a valid basis for the initiation of any form of criminal process against the debtor. The arrest, detention, prosecution and trial of a debtor for breach of a loan agreement under any guise is illegal. – Per E. A. Agim, JSC

OWNERSHIP – WHETHER THE OWNER OF A PROPERTY CAN BE CONVICTED FOR MISAPPROPRIATION OF HIS PROPERTY

An owner of money or any property cannot be validly accused of fraudulently converting or diverting the money or part of it. In Edun V FRN (2019) 13 NWLR (Pt.1689) 326 @ 355-357, this Court per Eko JSC stated thusly – “For these accused to be guilty of dishonestly misappropriating the money they paid, the prosecution must prove or establish who was the owner of the money misappropriated. The charges suggested that the money misappropriated was entrusted to the accused… I do not think that the ownership of the money paid to the accused by the Kwara State MDG as consideration for performing the job they were contracted to perform would still remain vested in the said MDG … It is in our jurisprudence that an owner of property can be convicted for misappropriating his own property. The Supreme Court of India, in A 1965 SC 1433 at 1436; 1965 Crilj 431 made a clear statement of the law that an owner of a property cannot be guilty of misappropriation of his own property. The statement accords with common sense and logic.

Accordingly, I adopt it … In the event of the accused failing in their contractual obligations to the MDG’s cause of action for civil breach of contract would have risen for which the remedy for such breach does not lie in criminal proceedings… l cannot see how the accused, the allodial owners of the money paid as valuable consideration to them by the Kwara State MDGs for the drilling and provision of motorized boreholes, could be guilty of dishonestly misappropriating their own money by paying over the sums totaling N14,000,000.00 to the PW3 and Tunji Morofoye for the purpose of settling some politicians. I agree with the learned counsel for the accused … as owners of their money, out of which the N14 000 000.00 was paid out, are entitled, in their discretion, to deal with the money in any lawful or legitimate manner.” – Per E. A. Agim, JSC

EFCC – THE SCOPE OF THE POWERS VESTED ON EFCC – WHETHER SECURITY AGENCIES ARE DEBT RECOVERY AGENCIES

…the law that is settled by a long line of the decisions of this Court that the powers vested on the EFCC by the Economic & Financial Crimes Commission Act to prevent, control, investigate and prosecute financial crimes including money laundering does not extend to the investigation, resolution and prosecution contractual disputes and disputes arising from other civil transactions. See for example EFCC V Diamond Bank Plc & Ors (2018) LPELR-44217(SC) in which this Court Per Bage JSC held thusly – “It is important for me to pause and say here that the powers conferred on the Appellant, i.e the EFCC to receive complaints and prevent and/or fight the commission of financial crimes in Nigeria pursuant to Section 6(b) of the EFCC Act (Supra) does not extend to the investigation and/or resolution of disputes arising or resulting from simple contracts or civil transactions as in this case. The EFCC has an inherent duty to scrutinize all complaints that it receives carefully crafted by the complaining party, and be bold enough to counsel such complaints to seek appropriate/lawful mean to resolve their disputes. Alas! The EFCC is not a debt recovery agency and should refrain from being used as such … The subsequent actions of reporting the matter to the police and to the Appellant were nothing but abuse of process of law. What is even more disturbing in recent times is the way and manner the Police and some other security agencies, rather than focus squarely on their statutory functions of investigation, preventing and prosecuting crimes, allow themselves to be used b overzealous and/or unscrupulous characters for the recovery of debts arising from simple contracts, loans or purely civil transactions. Our security agencies, particularly the police, must know that the citizenry’s confidence in them ought to first be ensured by the agencies themselves by jealously guarding the integrity of the uniform and powers conferred on them. The beauty of salt is in its taste. Once salt loses its own taste, its value is irredeemably lost. I say this now and again, our security agencies, particularly the police, are not debt recovery agencies. The agencies themselves need to first come to this realization, shun all entreaties in this regard and they will see confidence gradually restored in them.” – Per E. A. Agim, JSC

MONEY LAUNDERING – INGREDIENTS OF THE OFFENCE OF MONEY LAUNDERING

Having carefully looked at the issues canvassed for determination in this appeal, the crux of the matter is whether the prosecution had proved the allegation of money laundering against the Appellant. Firstly, the offence is provided for in Section 15 (2) of the Act and it states that:

“(2) Any person or body corporate, in or outside Nigeria, who directly or indirectly – (a)-(b)-(c)-(d) acquires, uses, retains or fakes possession of any fund or property, knowing or reasonably ought to have known that such fund or property is, or forms part of the proceeds of an unlawful act, commits an offence of money laundering under this Act.”

In defining what constitutes an unlawful act, Section 15(6) of the Act provides as follows:

“(G) – The Unlawful Act referred to in Subsection (2) of this Section includes participating in an organized criminal group, racketeering, terrorism, terrorist financing, trafficking in person, smuggling of migrants, sexual exploitation, sexual exploitation of children, illicit trafficking in narcotic drugs and psychotropic substances, illicit arms trafficking, illicit trafficking in stolen goods, corruption, bribery, fraud, currency counterfeiting, counterfeiting and piracy of products, environmental crimes, murder grievous bodily injury, kidnapping, hostage taking, robbery or theft, smuggling (including in relation to customs and excise duties and taxes), tax crimes (related to direct taxes and indirect taxes), extortion, forgery, piracy, insider trading and market manipulation or any other criminal act specified in this Act or any other law in Nigeria.”

Following from the above provision of the law, it goes without saying that for one to be culpable for the offence of money laundering under Section 15(2) (d) of the Act, the source of fund must be probed and found dirty. In the case of Daudu Vs. Federal Republic of Nigeria (2018) LPELR – 43637(SC); (2018) 10 NWLR (Pt. 1626) 160 at 182, my learned brother, Kumai Bayang Aka’ahs, JSC observed that:

“money laundering is a global scourge that affects countries worldwide, Nigeria not being an exception. It has been described as the washing of illegitimate money in a bid to make it appear clean or legitimate. It involves the process of transforming the proceeds of crime into ostensibly legitimate money or other assets.”

The point is that the primary fund from which other seemingly legitimate transactions breed must be dirty money or proceeds of a criminal act. See also Kalu Vs. Federal Republic of Nigeria & Ors (2016) LPELR – 40108 (SC); (2014) 1 NWLR (Pt.1389) 479 at 533. – Per J. I. Okoro, JSC

LOAN – CONDUCT OF BANKS WHERE AN APPLICATION FOR A LOAN FACILITY HAS BEEN GRANTED

Secondly, my understanding of the subject is that where an application for a loan facility has been granted, the money granted becomes the property of the loanee and he reserves the right to appropriate it howsoever he desires as long as he keeps to term with the repayment clause. It is not within our jurisprudence that a vendor should remote control on how he appropriate fund, secured in a loan agreement. Even where he defaults in satisfying the loan as and when due, the vendor would only be within his right to commence civil proceedings to recover the principal sum plus interest or outrightly confiscate the collateral provided to secure the loan. The subject matter is clearly within the realm of commercial transaction and not criminal.– Per J. I. Okoro, JSC

MONEY LAUNDERING – MEANING OF MONEY LAUNDERING

Money laundering is a global scourge that affects countries worldwide, Nigeria not being an exception. It has been described as the washing of illegitimate money in a bid to make it appear clean or legitimate. It involves the process of transforming the proceeds of crime into ostensibly legitimate money or other assets. See Per AKA’AHS, JSC in DAUDU V. FRN (2018) LPELR-43637(SC) (PP. 10-12 PARAS. D). – Per U. M. Abba-Aji, JSC

MONEY LAUNDERING – INGREDIENTS OF THE OFFENCE OF MONEY LAUNDERING

Section 15(2)(d) of the Money Laundering Prohibition Act, 2011 (as amended) (MLPA) under which the Appellant was charged provides thus:

“(2) Any person or body corporate, in or outside Nigeria, who directly or indirectly –

(d) acquires, uses, retains or takes possession or control of any fund or property, knowingly or reasonably ought to have known that such fund or property is, or forms part of the proceeds of an unlawful act, commits an offence of money laundering under this Act.” (underlining mine for emphasis)

Section 15(6) of the same Act provides thus:

“The unlawful act referred to in Subsection (2) includes participation in an organised criminal group, racketeering, terrorism, terrorist financing, trafficking in persons, smuggling of migrants, sexual exploitation, sexual exploitation of children, illicit trafficking in narcotic drugs and psychotropic substances, illicit arms trafficking, illicit trafficking in stolen goods, corruption, bribery, fraud, currency counterfeiting, counterfeiting and piracy of products, environmental crimes, murder, grievous bodily injury, kidnapping, hostage taking, robbery or theft, smuggling (including in relation to customs and excise duties and taxes), tax crimes (related to direct taxes and indirect taxes), extortion, forgery, piracy, insider trading and market manipulation or any other criminal act specified in this Act or any other law in Nigeria.”

The words employed by the drafters of Section 15(2)(d) of the MLPA are simple and clear, and they must be accorded their ordinary meanings. It is not the duty of the Court to enlarge the meanings of the words used in the legislation to include what the lawmakers did not intend. See ALAGBAOSO V. INEC & ORS (2023) LPELR-59702 (SC), UNIVERSAL PROPERTIES LTD V. PINNACLE COMMERCIAL BANK & ORS (2022) LPELR – 57808 (SC), TABIK INVESTMENT. LTD & ANOR V. GTB (2011) LPELR-3131 (SC), OBASANJO & ORS V. YUSUF & ANOR (2004) LPELR – 2151 (SC), EMELOGU V. STATE (1988) LPELR – 1126(SC).

For a person to be guilty of an offence under Section 15(2)(d) of the MLPA, he must have acquired, used, retained or taken possession or control of any fund or property, knowingly or reasonably ought to have known that such fund or property is, or forms part of the proceeds of an unlawful act.  – Per Adamu Jauro, JSC

MONEY LAUNDERING – MEANING OF MONEY LAUNDERING

In DAUDU V. F.R.N. (2018) 10 NWLR (PT. 1626) 169 at 182 – 183, Paras H – A, this Court described money laundering thus:

“Money laundering is a global scourge that affects countries worldwide, Nigeria not being an exception. It has been described as the washing of illegitimate money in a bid to make it appear clean or legitimate. It involves the process of transforming the proceeds of crime into ostensibly legitimate money or other assets.”

Hence, any action or transaction emanating from legally obtained money cannot ground a charge of money laundering, let alone result in conviction for the offence. Flowing from the foregoing, the Appellant cannot by any stretch of the imagination be said to be guilty of an offence under Section 15(2)(d) of the MLPA. – Per Adamu Jauro, JSC

LOAN – MEANING OF LOAN

Instructively, the term ‘loan’ denotes an act of lending; a grant of something for temporary use; a thing lent for the borrower’s temporary use, especially a sum of money lent at interest. See BLACK’S LAW DICTIONARY, 11th Edition 2019 @ 1122. – Per I. M. M. Saulawa, JSC

EVIDENCE – WHETHER THE EVIDENCE OF AN INVESTIGATION OFFICER AMOUNTS OT HEARSAY EVIDENCE

Indeed, the law is fundamentally trite, that evidence of what an investigation officer procured, heard or saw in the course of his investigation, is admissible and reliable, thus cannot by any stretch of an imagination be rewarded as hearsay evidence. See ANYASODOR VS. THE STATE (2018) 8 NWLR (PT. 1620) 125 per Sanusi, JSC; (2018) LPELR – 43720(SC) @ 20 – 21 paragraphs E – C, OLAOYE VS. THE STATE (2018) 8 NWLR (Pt. 1621) 281@ 301, (2018) LPELR – 43601 (SC) @ 42-43 paragraphs D – A, DAUDU VS. FRN (2018) LPELR – 43637 (SC) @ 26 – 27, IBRAHIM KAMILA VS. THE STATE (2018) 8 NWLR (pt. 1621) 252 where this Court aptly held:

“Again on the quality of the testimony of PW3 who is the investigation police officer which the appellant’s learned counsel called for its discountenance because according to him, it is hearsay evidence. Here, I do not the appellant’s counsel’s view that the evidence of an IPO amounts to hearsay evidence as an IPO, he narrates to the Court, the outcome of his investigation or enquiries or what he recovered or discovered in the course of his duty. He must have discovered or recovered some pieces of evidence vital to the commission of the crime which trial Courts normally consider in arriving at a just decision one way or the other. The lower Court was therefore right in refusing to discountenance such evidence adduced or given by PW3. Per Sanusi, JSC @ – 271 paragraph D – E.” – Per I. M. M. Saulawa, JSC

BURDEN OF PROOF – BURDEN OF PROOF IN CRIMINAL PROCEEDINGS

Under the Nigerian adversarial criminal justice system, an accused person, no matter the gravity of the offence, he allegedly committed, is entitled to be presumed as innocent until he’s duly proved guilty beyond reasonable doubt. See Sections 36(1) & (5) of the Constitution of the Federal Republic of Nigeria 1999 as amended:

“6 – (1) In the determination of his civil rights and obligations, including any question or determination by or against any government or authority, a person shall be entitled to a fair hearing within a reasonable time by a Court or other Tribunal established by law and constituted in such manner as to secure its independence and impartiality.

(5) Every person who is charged with a criminal offence shall he presumed to be innocent until he is proved guilty:

Provided that nothing in this section shall invalidate any law by reason only that the law imposes upon any such person the burden of proving particular facts.”

Where a person is charged with a criminal offence (as in the instant case, under Sections 15 and 18 of the Money Laundering (Prohibition) Act, 2011 as amended), he shall be presumed to be innocent until he is duly proved guilty. See Section 36(5) of the 1999 Constitution (supra). There’s however a caveat to that section:

“Provided that nothing in this section shall invalidate any law by reason only that the law imposes upon the burden of proving particular facts.”

The foregoing proviso to Section 36(5) of the 1999 Constitution (supra), which shifts the burden of proving particular facts on the accused person, does not necessarily relieve (discharge) the prosecution from proving the offence charged beyond reasonable doubt. Indeed, the proviso presupposes that it is only after the commission of the offence charged has been duly proved, that the Defendant (Accused) should be required to satisfy the Court that he’s not guilty of the offence as charged. See Section 138(1) of the Evidence Act 2011, SUNDAY NWOSU VS. BOARD OF CUSTOMS & EXCISE (1988) LPELR-2131 (SC), per Karibi Whyte, JSC @ 45 paragraphs D – F. – Per I. M. M. Saulawa, JSC

APPEAL – CONDUCT OF APPELLATE COURTS TO EVIDENCE ADDUCED AT TRIAL

I have deemed it expedient, at this crucial point in time, to reiterate the trite doctrine, that the ascription of probative value to evidence adduced at the trial is a matter fundamentally for the trial Court. Thus, an appellate Court is devoid of any discretionary power to substitute its own views of uncontroverted (undisputed) facts for the views of the trial Court. This is undoubtedly so, because interfering by an appellate Court with regard to issues of fact is fundamentally confined within very limited and narrow dimensions. See NWOSU VS. BOARD OF CUSTOMS & EXCISE (supra) per Craig, JSC @ 19 – 20 paragraphs D – B, NAFIU RABIU VS. KANO STATE (1980) LPELR – 2936 (SC) per Idigbe, JSC @ 61 paragraphs D-G, BRACEGIRDLE VS. OXLEY (1947) 1 ALL ER 125 per Lord Goddard LCJ @ 130 paragraph S. D – F, KINGMAN VS. SEAGER (1938) 1 KB 397, DURNELL VS. SCOTT (1939) 1 ALL ER 183.

Most especially, in the locus classicus, it was held by the English Court of Appeal (consisting of five justices):

“It is, of course, said that we are bound by the findings of facts set out in the case by the justices, and it is perfectly true that this Court does sit as a general Court of Appeal against justices decisions in the same way as quarter sessions, for instance, sit as a Court of Appeal against the decisions of Courts of summary jurisdiction. In this Court, we only sit to review the justices’ decisions on points of law being bound by the fact which they find provided always that there is evidence on which the justices can come, to the conclusions of fact at which they arrive. Goddard, LCJ. – Per I. M. M. Saulawa, JSC

MONEY LAUNDERING – THE EVOLUTION OF THE MONEY LAUNDERING OFENCES LEGISLATION IN THE UK

I have deemed it expedient, at this most crucial point in time, to allude to the remarkable global evolution of the Money Laundering Offences Legislations, most especially with regards to the United Kingdom vis-a-vis Nigeria. It’s trite that the Proceeds of Crime Act, 2002 (c. 29 POCA) of the United Kingdom provides for the confiscation (or civil recovery) of the proceeds from crime. The POCA, 2002 embodies the Principal Money Laundering Legislation in the UK which was enacted as a result of the publication on June 14, 2000 of new government policy entrenched in the Performance And Innovation Units Report – “RECOVERING THE PROCEEDS OF CRIME”. The POCA 2002 essentially deals with a wide of issues relating to UK Laws on proceeds of Crime causes, including:

(i) Confiscation orders against convicted persons (requiring payment to the State based on the benefit obtained from crimes);

(ii) Civil recovery of proceeds of crime from unconvicted persons;

(iii) Taxation of profits generated from crime;

(iv) UK Anti-Money Laundering Legislation;

(v) Powers of Investigation into suspected proceeds of crime offences; and

(vi) International Cooperation by UK Law Enforcement Agencies against Money Laundering.

Ever since 2002, when POCA was enacted, it has been severally amended, especially by the Serious Organized Crime and Police Act, 2007, POCA, 2002, has undoubtedly simplified trial and conviction of criminals suspected of Money Laundering.

However, prior to the enactment of POCA, 2002, Prosecutors in the UK had to excruciatingly contend with three different regimes: (i) The Drug Traffic Act, 1994 dealing with laundering of the proceeds of drugs trafficking; (ii) The Criminal Justice Act, 1988, as amended by the Criminal Justice Act, 1993 and (iii) The Proceedings of Crime Act, 1995 – for proceeds of other crimes, et al.

Thus essentially, prior to the enactment of POCA 2002, a prosecutor had the herculean task of proving that monies (or assets, as the case may be) traceable to an accused person were proceeds of crime, and also the actual type of crime the proceeds were derived from (i.e. either drug crime, or non-drug crime). However, POCA 2002 removed the unwholesome distinction between the proceeds of drug trafficking and (proceeds) other non-drug crimes. See THE PROCEEDS OF CRIME ACT, 2002 (Commencement No. 4, TRANSITIONAL PROVISIONS AND SAVINGS) ORDERS, 2003, MONEY LAUNDERING REGULATIONS CRIMES ACT, 2007. In the case of GALE VS. SERIOUS CRIMES AGENCY, the UK Supreme Court aptly held inter alia:

1. The Proceeds of Crime Act 2002 (“POCA”), as amended by the Serious Organized Crime and Police Act 2005, is designed to prevent the enjoyment of the fruits of criminal activity. Part 2 focuses on the criminal. To the extent that it is proved in the manner prescribed, that a criminal has benefited from criminal conduct, a levy can be made upon his assets, whether or not those assets are themselves the product of his criminal conduct, by a process inaccurately described as “confiscation”. A conviction of the criminal is a precondition to the power to confiscate.

2. Part 5 concentrates on the fruits of crime themselves. The Serious Organized Crime Agency (“POCA”) is given the task of tracking down and recovering the fruits of criminal activity, whether they remain in the hands of the criminal or have been passed on to someone else subject to exceptions for which POCA makes provision. The fruits of criminal activity can be recovered under part 5 whether or not anyone has been convicted of the crime or crimes that have produce them.

See (2011) LPELR-17843 (UK SC) in Appeal No. (2011) UK SC 49 (from suit No. 2010 EWCA. Civ. 759) judgment delivered on 26/10/11, per Lord Philips. – Per I. M. M. Saulawa, JSC

MONEY LAUNDERING – THE EVOLUTION AND SCOPE OF THE MONEY LAUNDERING (PROHIBITION) ACT, 2011 – INTERPRETATION OF STATUTES

Contradistinctively, the evolution of the current Money Laundering (Prohibition) Act, 2011 (supra), is fundamentally traceable to the Money Laundering Decree No. 13 of 1995. The said Decree was limited to dealing with Money or Resources directly or indirectly obtained or derived from illicit drug and psychotropic substances. The National Drugs Law Enforcement Agency (NDLEA) was established and duly empowered to specifically enforce that law, pursuant to the NDLEA Act. Most especially, under Section 14 (1) (a) of the Decree, No. 13 1995, it’s provided:

“14 (1) Any person who (a) converts or transfers resources or property derived directly or indirectly form narcotic drugs and psychotropic substances with concealing or disguising the illicit origin of the resources or property, or aiding any person involved in the illicit traffic in narcotic drugs. And psychotropic substances to evade the illegal consequences of his action.”

The said Decree No. 13, 1995 was itself amended by the Money Laundering (Amendment) Act, No. 19 of 2002, which explanatory provided:

“This Act provides for a new Money Laundering Act to prohibit the laundering of the proceedings of a crime or an illegal act and repeal the Money Laundering Acts, 1995, 2003.”

The Money Laundering Act, 2003, equally provides appropriation of financial institutions and scope of supervisions of regulation authorities of Money Laundering Activities, et al.

The Money Laundering Act, 2003 was itself equally repealed by the Money Laundering (Prohibition) Act, 2004, which had an explanatory note thus:

(a) Provides for the repeal of the Money Laundering Act, 2003.

(b) Makes comprehensive provisions for prohibiting the laundering of the proceeds of a crime or an illegal act; and

(c) Provides appropriate penalties and expands the interpretation of financial institution and scope of supervision of regulatory authorities on money laundering activities among others.

However, barely within the span of seven years, the Money Laundering (Prohibition) Act, 2004 was equally ill-fated by the Money Laundering (Prohibition) Act, 2011 (commencement date 03/06/2011).

The Money Laundering (Prohibition) Act, 2011 (as amended) was enacted with the fundamental objective:

TO REPEAL THE MONEY LAUNDERING (PROHIBITION) ACT, 2011 AND ENACT THE MONEY LAUNDERING (PROHIBITION ACT, 2011 TO ENHANCE THE SCOPE OF MONEY LAUNDERING (OFFENCES AND CUSTOMER DUE DILIGENCE MEASURES AND FOR RELATED MATTERS).

However, it ought to be pointed out at this point in time, that ever since the enactment of the first Money Laundering (Prohibition) Act, 2003, the menace of money laundering criminal activities virtually went unchecked. Since then, there has at least four reforms of the Nigeria’s Anti- Money Laundering legislation regime – starting with the AML Act 2003 with the subsequent amendments thereof in 2004, 2011 and the most current Money Laundering (Prevention And Prohibition) Act, 2022. Interestingly, the extant Money Laundering Prohibition) Act, 2022. Interestingly, the extant Money Laundering (Prevention And Prohibit) Act, 2022 introduced at least five key changes therein:

1. HIGHER RESTRICTIONS ON CASH PAYMENT TRANSACTIONS.

2. ADOPTION OF DESIGNATED NON-FINANCIAL BUSINESS AND PROFESSION (DNBP).

3. ENHANCED KYC REQUIREMENTS FOR POLITICALLY EXPOSE PERSONS (PEP) AND PROXIES/AGENTS

4. KYC FOR INTERNET AND SHIP-BASED CASINOS.

5. EXPANDED SCOPE OF SUSPICIOUS TRANSACTION REPORTING.

Under the Money Laundering (Prohibition) Act, 2011 (applicant in the instant case), suspicious financial transaction constitutes a criminal offence. Specifically, Section 6 of the Act provides:

6.-(i) Where a transaction –

(a) involves a frequency which is unjustifiable or unreasonable;

(b) is surrounded by conditions of unusual or unjustified complexity;

(c) appear to have no economic justification or lawful objective; or

(d) in the opinion of the Financial Institution or Designated Non-Financial Institution involves terrorist financing or is inconsistent with the know transaction pattern of the account or business relationship;

that transaction shall seek information from the customer and the identity of the beneficiary.

(2) A Financial Institution or Designated Non-Financial Institution shall immediately after the transaction referred to in Subsection (1) of this Section –

(a) draw up a written report containing all relevant information on the matters mentioned in Subsection (1) of this Section together with the identity of the principal and where applicable, of the beneficiary or beneficiaries;

(b) take appropriate action to prevent the laundering of the proceeds of a crime or an illegal act; and

(c) report any suspicious transaction and actions taken to the Economic and Financial Crimes Commission.

(3) The provisions of Subsection (1) and (2) of this Section shall apply whether the transaction is completed or not.

(4) The Economic and Financial Crimes Commission shall acknowledge receipt of any disclosure, report or information received under this section and may demand such additional information as it may deem necessary.

5 (a) The acknowledgement of receipt shall be sent to the Financial Institution or Designated Non-Financial Institution within the time allowed for the transaction to be undertaken and it may be accompanied by a notice deferring the transaction for a period not exceeding 72 hours.

(b) Notwithstanding the provisions of paragraph (a) of this subsection, the Chairman of the Economic and Financial Crimes Commission or his authorised representative shall place a Stop Order not exceeding 72 hours, on any account or transaction if it is discovered in the course of their duties that such account or transaction is suspected to be involved in any crime.

(6) If the acknowledgment of receipt is not accompanied by a stop notice, or where the stop notice has expired and the order specified in Subsection (7) of this Section to block the transaction has not reached the Financial Institution or Designated Non-Financial Institution, it may carry out the transaction.

(7) Where it is not possible to ascertain the origin of the funds within the period of stoppage of the transaction, the Federal High Court may, at the request of the Commission or other persons or authority duly authorized in that behalf order that the funds, accounts or securities referred to in the report be blocked.

(8) An order made by the Federal High Court under this Subsection (7) of this Section shall be enforced forthwith.

(9) A Financial Institution or Designated Non-Financial Institution which fails to comply with the provisions of Subsection (1) and (2) of this Section commits an offence and is liable on conviction to a fine of N1,000,000 for each day during which the offence continues.

(10) The Directors, Officers and Employees of Financial Institutions and Designated Non-Financial Institutions who carry out their duties under this Act in good faith shall not be liable to any civil or criminal liability or have any criminal or civil proceedings brought against them by their customers.

Likewise, part II of the Money Laundering Act 2011 (supra), provides for money laundering offences and punishment therefor:

“15. (1) Money laundering is prohibited in Nigeria.

(2) Any person or body corporate, in or outside Nigeria, who directly or indirectly –

(e) conceals or disguises the origin of;

(f) converts or transfers;

(g) removes from the jurisdiction; or

(h) acquires, uses, retains or takes possession or control of any fund or property, knowingly or reasonably ought to have known that such fund or property is, or form part of the proceeds of an unlawful act;

(3) A person who contravenes the provisions of Subsection (2) of this Section is liable on conviction to a term of not less than 7 years but not more than 14 years imprisonment.

(4) A body corporate who contravenes the provisions of Subsection (2) of this Section is liable on conviction to –

(c) A fine of not less than 100% of the funds and properties acquired as a result of the offence committed; and

(d) Withdrawal of licence.

(5) Where the body corporate persists in the commission of the offence for which it was convicted in the first instance, the Regulators may withdraw or revoke the certificate or licence of the body corporate.

(6) The unlawful act referred to in Subsection (2) of the Section includes participation in an organized criminal group, racketeering, terrorism, terrorist financing, trafficking in persons, smuggling of migrants, sexual exploitation, sexual exploitation of children, illicit trafficking in narcotic drugs and psychotropic substances, illicit arms trafficking, in stolen good, corruption, bribery, fraud, currency counterfeiting, and piracy of products environment crimes, murder, grievous bodily injury, kidnapping, hostage taking, robbery or theft, smuggling (including in relation to customs and excise duties and taxes), tax crimes (relate to direct taxes and indirect taxes), extortion, forgery, piracy, insider trading and market manipulation or any other criminal act specified in this Act or any other law in Nigeria.

(7) A person who commits an offence under Subsection (2) of this Section shall be subject to the penalties specified in this section notwithstanding that the various acts constituting the offence were committed in different countries or places.”

Thus, against the backdrop of the foregoing highlight, there is no doubt that by the explanatory note thereof, the mischief of the extant Money Laundering (prohibition) Act, 2011 is to expand the (hitherto very limited) scope of the precursor Money Laundering Acts of 2003 and 2004, from the transfer of the illicit resources derived drugs related offences, to much more broadly based crimes or illegal acts. Indeed, it is trite, that although explanatory (or side) notes to statutes are generally not considered as veritable aids to interpretation (construction) of statutes, nevertheless it’s permissible for the Court to consider the general purpose and mischief at which the statute is aimed, bearing in mind the said explanatory (side note). See CHANDLER VS. APP (1964) AC 763 per Lord Reid @ 789, STEPHEN VS. CRUCKFIEL RURAL DISTRICT COUNCIL (1960) 2 QB 373 per Upjohn, LJ @ 383, RUPERT CROSS: STATUTORY INTERPRETATION 1ST EDITION (1981) Reprint, cited with approval by this Court in UWAIFO VS. AG BENDEL STATE (1982) NSCC, per Idigbe, JSC @ 242, PATRICK FERNANDEZ VS FRN: CA/L/692/2011 – 02/04/2013 per Saulawa, JCA (as then was) @ 43, FRN VS. IBORI (2014) LPELR – 36526 (CA); (2014) LPELR – 23214 (CA) Per Saulawa, JCA (as then was) @ 67 paragraphs A – D; 65 – 67 paragraphs B – A. – Per I. M. M. Saulawa, JSC

FRAUD – MEANING OF FRAUD

The word ‘fraud’, within the purview and contemplation of the provision of the law literally denotes a knowing misrepresentation or knowing concealment of a material fact made to induce another, act to his or her detriment. Generally, fraud is a tort. However, in exceptional cases when the fraudulent conduct is willful (as in the instant case), fraud may amount to a Crime. See BLACK’S LAW DICTIONARY 11TH Edition 2019 @ 802. According to Willard:

“Fraud has been defined to be, any kind of artifice by which another is deceived. Hence, all surprise, trick, cunning, dissembling, and other unfair way that is used to cheat any one, is to be considered as fraud.”

See JOHN WILLARD: ATRETISE ON EQUITY JURISPRUDENCE 1897 (Platt Porter Edition) @ 147 quoted @ 802 Black’s Law Dictionary. Op cit.

A fortiori, the word fraud may be defined as a reckless misrepresentation devoid of justification in believing in its truth; unconscionable dealing, especially in contract law, et al. See WILLIAM R. ANSON: PRINCIPLES OF THE LAW OF CONTRACT (3RD American Edition, 1919) @ 263. – Per I. M. M. Saulawa, JSC

FRAUD – WHEN AN OFFENCE OF FRAUD IS DEEMED TO HAVE BEEN COMMITTED

In the case of ONWUDIWE VS. FRN (2006) 10 NWLR (pt. 988) 382 (2006) LPELR – 2715 (SC), this Court aptly held that the offence of fraud can only be said to have been committed if the taking of thing capable of being stolen is done fraudulently:

“An offence is said to be committed fraudulently, in the context of the appeal before us, if the action or conduct is a deceit to make, obtain or procure money illegally. By the fraudulent action or conduct the accused deceives his victim by what he does not really have. In one word, he is an imposter.”

Per Niki Tobi, JSC @ 50-51 paragraphs C-C.  – Per I. M. M. Saulawa, JSC

CASE – WHERE A PARTY RESTS HIS CASE ON THAT OF THE PROSECUTION

As alluded to above, the Appellant has no defence to the criminal allegation against him as charged. Not surprisingly, at the close of the prosecution, the Appellant deemed it expedient to merely rest his case upon that of the prosecution. And he actually did so at his own peril. As this Court aptly reiterated the trite fundamental doctrine in MAGAJI VS. NIGERIAN ARMY (2008) 3 NWLR (pt. 1089) 338:

“Again, merely resting his case on that of the prosecution amounts to nothing less than admission of the evidence led by the prosecution.”

Per Akintan, JSC @ 379 paragraph G. – Per I. M. M. Saulawa, JSC

CORRUPTION – MEANING OF CORRUPTION

The term corruption is defined as dishonest or fraudulent conduct by those in power, typically involving bribery (oxford Languages And Google). Corruption is a derivate of Latin ‘corrumpere’ denoting mar, bribe, destroy.  – Per I. M. M. Saulawa, JSC

CASES CITED

STATUTES REFERRED TO

1. Constitution of the Federal Republic of Nigeria 1999 (as amended)
2. Money Laundering (Prohibition) Act 2011
3. Evidence Act 2011
4. Administration of Criminal Justice Act 2015
5. Economic & Financial Crimes Commission Act
6. Proceeds of Crime Act, 2002 (c. 29 POCA) of the United Kingdom
7. Serious Organized Crime and Police Act, 2007 (of the United Kingdom)

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