United States Senate

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

Committee on Homeland Security and Governmental Affairs

*** Carl Levin, Chairman

Tom Coburn, Ranking Minority Member

KEEPING FOREIGN CORRUPTION OUT

OF THE UNITED STATES:

FOUR CASE HISTORIES

MAJORITY AND MINORITY

STAFF REPORT

PERMANENT SUBCOMMITTEE

ON INVESTIGATIONS

UNITED STATES SENATE

RELEASED IN CONJUNCTION WITH THE

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

FEBRUARY 4, 2010 HEARING
SENATOR CARL LEVIN

Chairman

SENATOR TOM COBURN, M.D.

Ranking Minority Member

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

ELISE J. BEAN

Staff Director and Chief Counsel

ROBERT L. ROACH

Counsel and Chief Investigator

LAURA E. STUBER

Counsel

ADAM K. PARKS

ICE Detailee

JASON E. MEDICA

ICE Detailee

ADAM HENDERSON

Professional Staff Member

ROBERT KAPLAN

Intern

CHRISTOPHER J. BARKLEY

Staff Director to the Minority 

JUSTIN J. ROOD

Senior Investigator to the Minority 

MARY D. ROBERTSON

Chief Clerk

7/10

Permanent Subcommittee on Investigations

199 Russell Senate Office Building – Washington, D.C. 20510 

Main Number: 202/224-9505

Web Address: www.hsgac.senate.gov [Follow Link to “Subcommittees,” to “Investigations”] 
i

KEEPING FOREIGN CORRUPTION OUT

OF THE UNITED STATES: FOUR CASE HISTORIES

TABLE OF CONTENTS

I. EXECUTIVE SUMMARY. .............................................. ... 1

A. Findings . . . . . . . . ..................................................... ... 5

(1) Lawyers......................................................... ... 5

(2) Real Estate Agents................................................. ... 5

(3) Escrow Agents.................................................... ... 5

(4) Lobbyist......................................................... ... 5

(5) Offshore Corporations.............................................. ... 5

(6) University. ...................................................... ... 5

(7) Personal Accounts. ................................................ ... 5

(8) Government Accounts.............................................. ... 6

(9) Correspondent Accounts. ........................................... ... 6

(10) Vendor PEP Lists. ................................................ ... 6

B. Recommendations..................................................... ... 6

(1) World Bank PEP Recommendations................................... ... 6

(2) Real Estate and Escrow Agent Exemptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

(3) Attorney-Client and Law Office Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

(4) U.S. Shell Corporations............................................. ... 6

(5) Immigration Restriction............................................. ... 6

(6) Visa Restriction. .................................................. ... 7

(7) Professional Guidelines............................................. ... 7

(8) FATF Recommendations............................................ ... 7

II. FOREIGN CORRUPTION AND MONEY LAUNDERING. ................... ... 8

III. OBIANG CASE STUDY: USING U.S. LAWYERS, REAL ESTATE AND ESCROW

AGENTS, AND WIRE TRANSFER SYSTEMS TO BRING SUSPECT FUNDS 

INTO THE UNITED STATES. ........................................... ... 15

A. Background. . .. ...................................................... ... 18

B. Obiang Use of Attorneys To Bring Suspect Funds Into the United States. . . . . . . . . . . . . 26 

(1) Attorney Michael J. Berger.......................................... ... 26

(a) Incorporating Shell Companies and Paying Bills. . . . . . . . . . . . . . . . . . . . . . . . 27

(b) Bringing In and Moving Suspect Funds.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

i. Union Bank of California..................................... ... 30 

ii. Bank of America. .......................................... ... 35

iii. Citibank .................................................. ... 43

iv. PayPal.................................................... ... 45

(c) Compensation. ............................................... ... 46 

(2) Attorney George I. Nagler. .......................................... ... 47

(a) Incorporating Shell Companies. .................................. ... 48
ii

(b) Bringing In and Moving Suspect Funds.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

i. Cal National Bank. ......................................... ... 51

ii. City National Bank.......................................... ... 54

iii. Pacific Mercantile Bank...................................... ... 62

(c) Obtaining Insurance for Obiang Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

(d) Awareness of the Suspect Origins of Obiang Funds. . . . . . . . . . . . . . . . . . . . . . 69

(3) Analysis. ........................................................ ... 70

C. Obiang Use of Real Estate and Escrow Agents To Purchase U.S. Property With 

Suspect Funds. ....................................................... ... 73

(1) Real Estate Agent Neil Baddin. ...................................... ... 74

(2) Real Estate Agent John Kerrigan...................................... ... 81

(3) Analysis. ........................................................ ... 85

D. Obiang Use of a U.S. Escrow Agent To Purchase a Private Jet with Suspect Funds.. . . . 85

E. Obiang Use of U.S. Wire Transfer Systems To Move Millions of Dollars in 

Suspect Funds. ....................................................... ... 97

(1) $73 Million Wired Through Wachovia Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

(2) $37 Million Wired Through Citibank. ................................. ... 101

F. Conclusion. .. ........................................................ ... 105

IV. BONGO CASE STUDY: USING LOBBYIST, FAMILY, AND U.S. TRUST

ACCOUNTS TO BRING SUSPECT FUNDS INTO THE UNITED STATES. .... ... 106

A. Background. . ........................................................ ... 106

B. Bongo Use of U.S. Lobbyist To Purchase Armored Cars and C-130 Aircraft. . . . . . . . . . 110

(1) Purchase of Armored Cars........................................... ... 114

(2) Purchase of C-130 Aircraft. ......................................... ... 120

(3) Conduit for Suspect Funds. ......................................... ... 139

(4) Analysis. ........................................................ ... 142

C. Bongo Use of a Daughter’s U.S. Bank Accounts To Move Suspect Funds Into the 

United States. ........................................................ ... 142

(1) HSBC Bank. ..................................................... ... 143

(2) Commerce Bank. ................................................. ... 145

(3) JP Morgan Chase.................................................. ... 158

(4) Analysis. ........................................................ ... 159

D. Bongo Use of U.S. Trust Account. ....................................... ... 159

(1) Fidelity Investments. .............................................. ... 161

(2) HSBC Bank. ..................................................... ... 165

(3) Analysis. ........................................................ ... 171

E. Conclusion. .. ........................................................ ... 171

V. ABUBAKAR CASE STUDY: USING OFFSHORE COMPANIES TO BRING 

SUSPECT FUNDS INTO THE UNITED STATES............................ ... 173

A. Background. .. ....................................................... ... 174

B. Using Offshore Corporations To Bring Suspect Funds Into the United States.. . . . . . . . . 188

(1) Citibank. ........................................................ ... 189

(2) Chevy Chase. .................................................... ... 202

(3) Wachovia Bank. .................................................. ... 211
iii

(4) Eagle Bank....................................................... ... 221

(5) Suntrust Bank. ................................................... ... 222

(6) Overview of Offshore Funds. ........................................ ... 226

C. American University and AUN........................................... ... 233

D. Conclusion. .. ........................................................ ... 241

VI. ANGOLA CASE STUDY: EXPLOITING POOR PEP CONTROLS. ........... ... 243

A. Background. .. ....................................................... ... 244

B. An Angolan PEP: Moving Millions of Dollars For An Arms Dealer. . . . . . . . . . . . . . . . 247

(1) Background. ..................................................... ... 249

(2) Falcone Accounts at Bank of America. ................................ ... 252

(3) Analysis. ........................................................ ... 261

C. An Angolan Government Official: Moving $50 Million at the Request of the

Governor of the Angolan Central Bank. ................................... ... 269

(1) Background. ..................................................... ... 270

(2) First Attempt To Transfer the $50 Million. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272

(3) Second Attempt To Transfer the $50 Million. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282

(4) Analysis. ........................................................ ... 299

D. An Angolan Financial Institution: Moving Hundreds of Millions of Dollars For

Banco Africano de Investimentos. ........................................ ... 299

(1) Background. ..................................................... ... 299

(2) HSBC USA Accounts.............................................. ... 302

(3) BAI’s Hidden Owners. ............................................. ... 303

(4) BAI’s Missing AML Policies and Procedures.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312

(5) BAI Credit Cards.................................................. ... 315

(6) No SCC Designation Despite PEP Involvement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 319

E. Conclusion. . . .. ...................................................... ... 323

 

# # #
KEEPING FOREIGN CORRUPTION OUT 

OF THE UNITED STATES: FOUR CASE HISTORIES 

 This Report examines how politically powerful foreign officials, their relatives, and close 

associates – referred to in international agreements as Politically Exposed Persons (PEPs) – have 

used the services of U.S. professionals and financial institutions to bring large amounts of 

suspect funds into the United States to advance their interests. Using four case histories, this 

Report shows how some PEPs have used U.S. lawyers, real estate and escrow agents, lobbyists, 

bankers, and even university officials, to circumvent U.S. anti-money laundering and anticorruption safeguards. This Report also offers recommendations to stop the abuses. 

I. EXECUTIVE SUMMARY 

 Combating corruption is a key U.S. value and goal, due to its corrosive effects on the rule 

of law, economic development, and democratic principles. In 2001, the Patriot Act made the 

acceptance of foreign corruption proceeds a U.S. money laundering offense for the first time, and 

required banks to apply enhanced scrutiny to private banking accounts opened for senior foreign 

political figures, their relatives, and close associates. In 2003, the United States supported the 

United Nations Convention Against Corruption, now ratified by over 140 countries. Also in 

2003, U.S. Immigration and Customs Enforcement (ICE) formed an investigative group 

dedicated to combating foreign corruption by PEPs. In 2004, President Bush issued Presidential 

Proclamation 7750 denying U.S. visas to foreign officials involved with corruption, and 

Congress later enacted supporting legislation. A 2009 study sponsored by the World Bank 

analyzed PEP controls worldwide and recommended stronger measures to reduce corruption. 

The Permanent Subcommittee on Investigations (Subcommittee) initiated this 

investigation to learn how U.S. laws apply to PEPs utilizing the domestic financial system, and 

examine how foreign senior political figures, their relatives, and close associates may be 

circumventing or undermining anti-money laundering (AML) and PEP controls to bring funds 

that may be the product of foreign corruption into the United States. It is the latest in a series of 

Subcommittee hearings examining foreign corruption and its U.S. aiders and abettors. 

During the course of its investigation, the Subcommittee staff conducted over 100 

interviews, including interviews of lawyers, real estate agents, escrow agents, lobbyists, bankers, 

university professionals, and government officials. The Subcommittee issued over 50 subpoenas 

and reviewed millions of pages of documents, including bank records, correspondence, contracts, 

emails, property records, flight records, news articles, and court pleadings. In addition, the 

Subcommittee consulted with foreign officials, international organizations, financial regulators, 

and experts in anti-money laundering and anti-corruption efforts. 

 The Subcommittee has developed four case histories that expose some of the tactics 

being used by PEPs and their facilitators to bring suspect funds into the United States, and 

identify some of the legal gaps, poor due diligence practices, and inadequate PEP controls that, at 

times, have made these tactics possible. 
2 

Obiang Case History. From 2004 to 2008, Teodoro Nguema Obiang Mangue, son of 

the President of Equatorial Guinea, has used U.S. lawyers, bankers, real estate agents, and 

escrow agents to move over $110 million in suspect funds into the United States. Mr. Obiang is 

the subject of an ongoing U.S. criminal investigation, has been identified in corruption 

complaints filed in France, and was a focus of a 2004 Subcommittee hearing showing how Riggs 

Bank facilitated officials from Equatorial Guinea in opening accounts and engaging in suspect 

transactions. 

Two lawyers, Michael Berger and George Nagler, helped Mr. Obiang circumvent U.S. 

AML and PEP controls at U.S. financial institutions by allowing him to use attorney-client, law 

office, and shell company accounts as conduits for his funds and without alerting the bank to his 

use of those accounts. If a bank later uncovered Mr. Obiang’s use of an account and closed it, 

the lawyers helped him open another. The U.S. shell companies they formed for Mr. Obiang 

included Beautiful Vision, Inc., Unlimited Horizon, Inc., Sweetwater Malibu, LLC, Sweetwater 

Management, Inc., and Sweet Pink, Inc. 

Two real estate agents, Neal Baddin and John Kerrigan, helped Mr. Obiang buy and sell 

high-end real estate in California including his purchase of a $30 million Malibu residence with 

funds wire transferred from Equatorial Guinea, operating without any legal obligation to inquire 

into the source of his funds. Mr. Obiang also used a U.S. escrow agent to purchase a $38.5 

million U.S.-built Gulfstream jet. When one escrow agent, McAfee & Taft, as a voluntary antimoney laundering precaution, refused to proceed without information about the source of the 

funds for the purchase, another escrow agent, International Airline Title Services Inc., stepped in 

and completed the transaction with no questions asked. U.S. law currently exempts both escrow 

and real estate agents from the Patriot Act’s requirement to establish anti-money laundering 

programs. 

Mr. Obiang also brought large amounts of suspect funds into the United States by taking 

advantage of banking systems that were not programmed to block wire transfers bearing his 

name. 

Bongo Case History. From 2003 through at least 2007, Omar Bongo, President of 

Gabon for 41 years until his death in June 2009, employed a U.S. lobbyist, Jeffrey Birrell, to 

purchase six U.S.-built armored vehicles and obtain U.S. Government permission to buy six 

U.S.-built C-130 military cargo aircraft from Saudi Arabia to support his regime. President 

Omar Bongo was a focus of a 1999 Subcommittee hearing showing how he used offshore shell 

companies to move over $100 million in suspect funds through accounts at Citibank Private 

Bank. He has been mentioned in connection with the ELF oil scandal in France, and has been 

identified in corruption complaints filed in France. 

As part of the armored car and C-130 transactions, over $18 million was wire transferred 

from Gabon into U.S. bank accounts held in the name of The Grace Group LLC, a U.S. 

corporation formed by Mr. Birrell. Mr. Birrell received the funds primarily from President Omar 

Bongo and an entity called Ayira. He later transferred $9.2 million of the funds provided by 

Ayira to a foreign account held in the name of President Omar Bongo in Malta. He also wire 

transferred over $4.2 million to foreign bank accounts opened in the name of a senior Bongo 

adviser, and over $1 million in payments to foreign bank accounts held in the name of various 

“consultants.” Mr. Birrell’s corporate accounts served as a conduit for those Bongo funds. 
3 

In addition, President Omar Bongo provided large amounts of cash to his daughter, 

Yamilee Bongo-Astier, who deposited the cash into bank accounts and safe deposit boxes at U.S. 

financial institutions in New York from 2000 to 2007. Ms. Bongo-Astier made multiple large 

dollar deposits into her accounts at banks that were unaware of her PEP status, but knew she was 

an unemployed student. One bank closed her account after receiving an $183,500 wire transfer 

from the Republic of Gabon; another did so after discovering she had $1 million in $100 shrinkwrapped bills in her safe deposit box, which she said her father had brought into the United 

States using his diplomatic status and without declaring the cash to U.S. authorities. 

Another member of the Bongo family is Inge Lynn Collins Bongo, the wife of Ali 

Bongo, the current President of Gabon and its former Minister of Defense. In 2000, she formed 

a U.S. trust, the Collins Revocable Trust, and opened accounts in the name of that Trust at banks 

in California. For three years, from 2000 to 2003, Ms. Inge Bongo accepted multiple large 

offshore wire transfers into the Trust accounts and used the funds to support a lavish lifestyle and 

move money among a network of bank and securities accounts benefiting her and her husband. 

Due to inadequate PEP lists prepared by third party vendors, the financial institutions 

hosting the Bongo accounts were, more often than not, unaware of their clients’ PEP status and 

did not subject their accounts to enhanced monitoring. 

Abubakar Case History. From 2000 to 2008, Jennifer Douglas, a U.S. citizen and the 

fourth wife of Atiku Abubakar, former Vice President and former candidate for President of 

Nigeria, helped her husband bring over $40 million in suspect funds into the United States 

through wire transfers sent by offshore corporations to U.S. bank accounts. In a 2008 civil 

complaint, the U.S. Securities and Exchange Commission alleged that Ms. Douglas received 

over $2 million in bribe payments in 2001 and 2002, from Siemens AG, a major German 

corporation. While Ms. Douglas denies wrongdoing, Siemens has already pled guilty to U.S. 

criminal charges and settled civil charges related to bribery and told the Subcommittee that it 

sent the payments to one of her U.S. accounts. In 2007, Mr. Abubakar was the subject of 

corruption allegations in Nigeria related to the Petroleum Technology Development Fund. 

Of the $40 million in suspect funds, $25 million was wire transferred by offshore 

corporations into more than 30 U.S. bank accounts opened by Ms. Douglas, primarily by 

Guernsey Trust Company Nigeria Ltd., LetsGo Ltd. Inc., and Sima Holding Ltd. The U.S. banks 

maintaining those accounts were, at times, unaware of her PEP status, and they allowed multiple, 

large offshore wire transfers into her accounts. As each bank began to question the offshore wire 

transfers, Ms. Douglas indicated that all of the funds came from her husband and professed little 

familiarity with the offshore corporations actually sending her money. When one bank closed 

her account due to the offshore wire transfers, her lawyer helped convince other banks to provide 

a new account. 

In addition, two of the offshore corporations wire transferred about $14 million over five 

years to American University in Washington, D.C., to pay for consulting services related to the 

development of a Nigerian university founded by Mr. Abubakar. American University accepted 

the wire transfers without asking about the identity of the offshore corporations or the source of 

their funds, because under current law, the University had no legal obligation to inquire. 
4 

Angola Case History. The final case history examines three Angolan PEP accounts, 

involving an Angolan arms dealer, an Angolan government official, and a small Angolan private 

bank that caters to PEP clients, to show how the accountholders gained access to the U.S. 

financial system and attempted to exploit weak U.S. AML and PEP safeguards. 

Pierre Falcone is a notorious arms dealer who supplied weapons during the Angolan civil 

war, a close associate of Angolan President Jose Eduardo Dos Santos, and the target of lengthy 

criminal investigations resulting in his recent imprisonment in France. He used personal, family, 

and U.S. shell company accounts at a U.S. bank in Arizona to bring millions of dollars in suspect 

funds into the United States and move those funds among a worldwide network of accounts. 

Mr. Falcone was imprisoned in France for one year beginning in 2000, was a fugitive from a 

2004 French global arrest warrant, and was convicted in France in 2007 and 2009, on charges 

related to illegal arms dealing, tax fraud, and money laundering. He is now serving a six-year 

prison sentence. Bank of America maintained nearly 30 accounts for the Falcone family from 

1989 to 2007, did not treat Mr. Falcone as a PEP, and did not consider his accounts to be high 

risk, even after learning in 2005 that he was an arms dealer and had been imprisoned in the past. 

In 2007, after receiving a Subcommittee inquiry about the Falcone accounts, the bank conducted 

a new due diligence review, closed the accounts, and expressed regret at providing Mr. Falcone 

with banking services for years. 

 Dr. Aguinaldo Jaime, a senior Angolan government official, was head of Banco Nacional 

de Angola (BNA), the Angolan Central Bank, when he attempted, on two occasions in 2002, to 

transfer $50 million in government funds to a private account in the United States, only to have 

the transfers reversed by the U.S. financial institutions involved. Dr. Jaime invoked his authority 

as BNA Governor to wire transfer the funds to a private bank account in California during the 

first attempt and, during the second attempt, to purchase $50 million in U.S. Treasury bills for 

transfer to a private securities account in California. Both transfers were initially allowed, then 

reversed by bank or securities firm personnel who became suspicious of the transactions. Partly 

as a result of those transfers and the corruption concerns they raised, in 2003, Citibank closed not 

only the accounts it had maintained for BNA, but all other Citibank accounts for Angolan 

government entities, and closed its office in Angola. In contrast, HSBC continues to provide 

banking services to BNA in the United States and elsewhere, and may be providing the Central 

Bank with offshore accounts in the Bahamas.

 Banco Africano de Investimentos (BAI) is a $7 billion private Angolan bank whose 

largest shareholder is Sonangol, the Angolan state-owned oil company. It offers banking 

services to Sonangol, Angolans in the oil and diamond industries, and Angolan government 

officials. Over the last ten years, BAI gained entry to the U.S. financial system through accounts 

at HSBC in New York, using HSBC wire transfer services, foreign currency exchange, and U.S. 

dollar credit cards for BAI clients, despite providing troubling answers about its ownership and 

failing to provide a copy of its AML procedures to HSBC after repeated requests. Despite the 

presence of PEPs in BAI’s management and clientele, HSBC decided against designating BAI as 

a “Special Category of Client” requiring additional oversight until November 2008, years after 

the account was first opened. 
5 

 Together, these four case histories demonstrate the need for the United States to 

strengthen its PEP controls to prevent corrupt foreign officials, their relatives, and close 

associates from using U.S. professionals and financial institutions to conceal, protect, and utilize 

their ill gotten gains. 

A. FINDINGS 

 This Report makes the following findings of fact. 

(1) Lawyers. Two U.S. lawyers helped Teodoro Obiang, son of the President of 

Equatorial Guinea, circumvent anti-money laundering and PEP controls at U.S. 

banks by allowing him to secretly use a series of attorney-client, law office, and 

shell company accounts as conduits for his funds. 

(2) Real Estate Agents. Two real estate agents helped Mr. Obiang buy and sell multimillion-dollar residences in California, and a real estate escrow agent facilitated his 

purchase of a $30 million property by handling millions of dollars wire transferred 

from Equatorial Guinea, without verifying the source of the funds, since they had 

no legal obligation to do so. 

(3) Escrow Agents. After one U.S. escrow agent, as an AML precaution, refused to 

complete the purchase of a Gulfstream jet without obtaining information on the 

source of $38.5 million to be paid for the aircraft, another U.S. escrow agent 

stepped in and completed the transaction with no questions asked. The escrow 

agents had no legal obligation under current law to inquire about the source of the 

funds. 

(4) Lobbyist. A U.S. lobbyist helped President Omar Bongo of Gabon obtain six U.S.-

built armored cars and U.S. Government permission to buy six U.S.-built military 

cargo aircraft from Saudi Arabia to support his regime, while allowing his U.S. 

bank accounts to be used as a conduit for $18 million in suspect funds in connection 

with those transactions, with no questions asked. 

(5) Offshore Corporations. Jennifer Douglas, a PEP through her marriage to Atiku 

Abubakar, former Vice President of Nigeria, used a series of U.S. bank accounts to 

bring over $25 million in suspect funds into the United States via wire transfers 

from offshore corporations. 

(6) University. A U.S. university accepted over $14 million in wire transfers from 

unfamiliar offshore shell corporations to pay for consulting services related to 

development of a university in Nigeria founded by Mr. Abubakar. 

(7) Personal Accounts. Pierre Falcone, a PEP through his close association with the 

President of Angola and appointment as an Angolan Ambassador, was able to use 

personal, family, and U.S. shell company accounts at a U.S. bank in Arizona to 

bring millions of dollars in suspect funds into the United States and move those 

funds among a worldwide network of Falcone accounts, despite his status as an 

arms dealer and a long history of involvement in criminal proceedings in France. 
6 

(8) Government Accounts. Dr. Aguinaldo Jaime, using his authority as head of the 

Angolan Central Bank, attempted without success, on two occasions in 2002, to 

transfer $50 million in government funds to a private account in the United States. 

(9) Correspondent Accounts. Banco Africano de Investimentos, a $7 billion private 

Angolan bank that caters to PEPs, is not treated as a PEP client subject to enhanced 

monitoring by its U.S. correspondent bank. 

(10) Vendor PEP Lists. Some vendors relied on by U.S. financial institutions to screen 

clients for PEPs used incomplete and unreliable PEP lists. 

B. RECOMMENDATIONS 

This Report makes the following recommendations. 

(1) World Bank PEP Recommendations. Congress should enact a law and the U.S. 

Treasury Department should promulgate rules implementing the key 

recommendations of a recent World Bank study to strengthen bank controls related 

to Politically Exposed Persons (PEPs), including by requiring banks to use reliable 

PEP databases to screen clients, use account beneficial ownership forms that ask for 

PEP information, obtain financial declaration forms filed by PEP clients with their 

governments, and conduct annual reviews of PEP account activity to detect and stop 

suspicious transactions. 

(2) Real Estate and Escrow Agent Exemptions. Treasury should repeal all of the 

exemptions it has granted from the Patriot Act requirement for anti-money 

laundering (AML) programs, including the 2002 exemption given to real estate and 

escrow agents handling real estate closings, and sellers of vehicles, including 

escrow agents handling aircraft sales, and use its existing statutory authority to 

require them to implement AML safeguards and refrain from facilitating 

transactions involving suspect funds. 

(3) Attorney-Client and Law Office Accounts. Treasury should issue an AML rule 

requiring U.S. financial institutions to obtain a certification for each attorney-client 

and law office account that it will not be used to circumvent AML or PEP controls, 

accept suspect funds involving PEPs, conceal PEP activity, or provide banking 

services for PEPs previously excluded from the bank; and requiring enhanced 

monitoring of such accounts to detect and report suspicious transactions. 

(4) U.S. Shell Corporations. Congress should enact legislation requiring persons 

forming U.S. corporations to disclose the names of the beneficial owners of those 

U.S. corporations. 

(5) Immigration Restriction. Congress and the Administration should consider 

making significant acts of foreign corruption a legal basis for designating a PEP and 

any family member inadmissible to enter, and removable from, the United States. 
7 

(6) Visa Restriction. The State Department should strengthen its enforcement of the 

law and Presidential Proclamation 7750 denying U.S. visas to foreign PEPs 

involved with corruption, and law enforcement agencies should increase the 

assistance they provide to State Department investigations of PEPs under review.

(7) Professional Guidelines. Professional organizations, including the American Bar 

Association, National Association of Realtors, American League of Lobbyists, and 

American Council for Education, should issue guidance to their members 

prohibiting use of any financial account to accept suspect funds involving PEPs, 

conceal PEP activity, facilitate suspect transactions involving PEPs, or circumvent 

AML or PEP controls at U.S. financial institutions. 

(8) FATF Recommendations. The United States should work with the international 

Financial Action Task Force on Money Laundering to amend its existing 40+9 

Recommendations to strengthen anti-corruption and PEP controls. 

 
8 

II. FOREIGN CORRUPTION AND MONEY LAUNDERING

 Corruption has been increasingly condemned by the United States and the international 

community for impeding the development of honest government, democratic principles, and the 

rule of law. It is also blamed for distorting markets, deterring investment, deepening poverty, 

undermining international aid efforts, and fostering crime.1

 Some have drawn connections 

between corruption, failed states, and terrorism. Corruption also continues to be a massive 

problem. The World Bank has estimated that $1 trillion in bribes alone exchange hands 

worldwide each year.2

Combating corruption has long been an aim of the United States. In 1977, for example, 

the United States became the first country in the world to prohibit the payment of bribes to 

foreign public officials.3

 In 1999, the Clinton Administration launched a major anti-corruption 

initiative, sponsoring an international conference under the leadership of Vice President Gore to 

increase the visibility of the issue. In 2001, Congress enacted anti-corruption provisions in the 

Patriot Act, as explained below. In 2004, the Bush Administration issued Presidential 

Proclamation 7750, providing a legal basis for denying visas to foreign officials involved in 

corruption.4

 In 2006, President Bush issued a national strategy to convince other nations to do 

the same.5 In 2009, Congress enacted legislation requiring the State Department to maintain “a 

list of officials of foreign governments and their immediate family members who the Secretary 

has credible evidence have been involved in corruption relating to the extraction of natural 

resources” and making such persons “ineligible for admission to the United States.”6

Subcommittee Work. The Permanent Subcommittee on Investigations has contributed 

to the anti-corruption battle by conducting several investigations over the past ten years into how 

politically powerful foreign officials, their relatives, and close associates utilize U.S. financial 

institutions to conceal, transfer, and spend funds suspected to be the proceeds of corruption. 

In 1999, for example, the Subcommittee released a report and held a hearing on four case 

histories of heads of states or their relatives who used Citibank Private Bank to deposit at least 

$100 million each in suspect funds.7 In 2001, the Subcommittee Chairman, Senator Carl Levin, 

                                                           

1

 See, e.g., statement by the World Bank that corruption is “the single greatest obstacle to economic and social 

development. It undermines development by distorting the rule of law and weakening the institutional foundation 

on which economic growth depends.” David Chaikin and J.C. Sharman, “Corruption and Money Laundering: A 

Symbiotic Relationship,” Palgrave, 2009, at 11. 

2

 The World Bank, “The Costs of Corruption,” April 4, 2004, http://web.worldbank.org/WBSITE/EXTERNAL/ 

NEWS/0,,contentMDK:20190187~menuPK:34457~pagePK:34370~piPK:34424~theSitePK:4607,00.html. 3

 See Foreign Corrupt Practices Act, 15 U.S.C. § 78dd-1 et seq. 

4

 Presidential Proclamation 7750 (January 2004), www.whitehouse.gov/news/releases/2004/01/20040112-3.html. 

Prior to this proclamation, corrupt foreign officials could and still can be denied visas on other grounds, including 

involvement with organized crime, drug trafficking, money laundering, trafficking in human persons, crimes of 

moral turpitude, and conduct detrimental to the interests of the United States. See, e.g., Section 212(f) of the 

Immigration and Naturalization Act, 8 U.S.C. 1182 et seq. 

5

 See “U.S. National Strategy to Internationalize Efforts Against Kleptocracy” (August 2006), available at 

www.state.gov/p/inl/rls/fs/70365. 

6

 See Section 7084 of the 2010 Omnibus Appropriations Act.

7

 “Private Banking and Money Laundering: A Case Study of Opportunities and Vulnerabilities,” U.S. Senate 

Permanent Subcommittee on Investigations, S. Hrg. 106-428, (Nov. 9 and 10, 1999)(case histories involved Raul 
9 

working with the Chairman of the Senate Banking, Housing, and Urban Affairs Committee, 

Senator Paul Sarbanes, won enactment of provisions in the Patriot Act which, for the first time, 

made the knowing acceptance of foreign corruption proceeds a money laundering offense.8

 They 

also successfully included Patriot Act provisions which required U.S. financial institutions to 

exercise enhanced due diligence before opening a private banking account for a senior foreign 

political figure, immediate relative, or close associate; conduct enhanced monitoring of such 

accounts; and report suspicious transactions to law enforcement.9

In addition, the Patriot Act required a long list of U.S. financial institutions to implement 

anti-money laundering (AML) programs, with written policies, procedures and controls, an AML 

compliance officer, employee training, and internal audits, unless explicitly exempted by the 

Treasury Secretary.10 It also required them to obtain customer identification information for 

each account opened.11 Regulations issued by Treasury over the next few years implemented 

those Patriot Act provisions, requiring U.S. banks, securities firms, insurance companies, futures 

commission merchants, jewelry businesses, and money service businesses, among others, to 

develop the specified AML programs. At the same time, however, Treasury exempted several 

groups from having to establish AML programs, including hedge funds, the real estate industry, 

and escrow agents.12 

 In 2004, the Subcommittee released a report and held a hearing examining the extent to 

which U.S. financial institutions were complying with the new Patriot Act provisions, using 

Riggs Bank in Washington, D.C. as an example.13 At that time, Riggs Bank provided banking 

services for most of the foreign embassies in the nation’s capital as well as for many heads of 

states, foreign government officials, and their relatives. The Subcommittee presented evidence 

of the Bank’s poor compliance with the Patriot Act provisions, using two case histories. 

 The first case history found that Riggs Bank had opened over 60 accounts for the 

government of Equatorial Guinea (EG), the EG President Teodoro Nguema Obiang Mbagasa, 

senior EG officials, and their relatives; created offshore corporations and opened accounts in the 

names of those offshore corporations for the President and his sons; accepted millions of dollars 

in cash deposits from the President, his wife, and other EG officials; and facilitated numerous 

suspect transactions involving millions of dollars without alerting law enforcement. The second 

case history showed that Riggs Bank had secretly opened accounts for the former President of 

Chile, Augusto Pinochet, created offshore corporations for him, accepted about $8 million in 

suspect deposits, and secretly couriered millions of dollars in cashiers checks to him in Chile. In 

                                                                                                                                                                                               

Salinas, brother to the President of Mexico; Omar Bongo, President of Gabon; Ali Zadari, husband to the Prime 

Minister of Pakistan; and two sons of Sani Abacha, then President of Nigeria). 

8

 See Section 315 of the Patriot Act, P.L. 107-56 (Oct. 26, 2001), codified at 18 U.S.C. §1956(c)(7)(B)(iv)(adds as a 

predicate offense for a money laundering prosecution “bribery of a public official, or the misappropriation, theft, or 

embezzlement of public funds by or for the benefit of a public official”). 9

 See Section 312 of the Patriot Act, P.L. 107-56 (Oct. 26, 2001), codified at 31 U.S.C. § 5318(i). 10 See Section 352 of the Patriot Act, P.L. 107-56 (Oct. 26, 2001), codified at 31 U.S.C. § 5318(h). 11 See Section 326 of the Patriot Act, P.L. 107-56 (Oct. 26, 2001), codified at 18 U.S.C. § 5318(l). 12 See, e.g., See 31 CFR § 103.170, as codified by interim final rule published at 67 FR 21110 (April 29, 2002, as 

amended at 67 FR 67547 (November 6, 2002) and corrected at 67 FR 68935 (November 14, 2002)); Advance Notice 

of Proposed Rulemaking on Anti-Money Laundering Program Requirements for “Persons Involved in Real Estate 

Closings and Settlements,” 68 FR 17569 (April 10, 2003). 

13 “Money Laundering and Foreign Corruption: Enforcement and Effectiveness of the Patriot Act,” U.S. Senate 

Permanent Subcommittee on Investigations, S. Hrg. 108-633 (July15, 2004). 
10 

2005, a supplemental report by the Subcommittee showed that Mr. Pinochet and his family 

members had opened a secret network of over 125 accounts under a variety of names at financial 

institutions operating in the United States.14 

The investigation also determined that U.S. bank regulators, including the Office of the 

Comptroller of the Currency and the Federal Reserve, had identified serious deficiencies in 

Riggs’ AML procedures, instructed Riggs to improve, but then took no supervisory action when 

Riggs failed to do so. The investigation showed that the supervisory failures at Riggs were part 

of a larger pattern of lax AML oversight. In response, beginning in 2005, U.S. bank regulators 

strengthened their AML oversight efforts and initiated a number of enforcement actions to 

compel stronger AML programs at U.S. financial institutions. 

In 2005, Riggs Bank paid a $16 million criminal fine and a $25 million civil fine for 

failing to report suspicious activities to law enforcement and to correct deficiencies in its AML 

program.15 The owners of the bank also paid a $5 million fine to a Spanish court for failing to 

observe a court-ordered freeze on assets related to Augusto Pinochet. Later that same year, PNC 

purchased the bank, and the Riggs name disappeared from U.S. banking.16 

The Subcommittee’s past work and the findings in this Report should be seen in the 

context, not only of U.S. efforts to combat corruption, but also of the international community’s 

increasing efforts to prevent, detect, and stop corruption. Some highlights of those efforts 

include the following. 

FATF Anti-Corruption Recommendations. One key source of international efforts to 

combat corruption dates back to the 1989 formation of the Financial Action Task Force on 

Money Laundering (FATF), which is the leading international body opposing money laundering. 

Since its establishment, FATF has focused on exposing money laundering and terrorist financing 

threats, setting international standards to meet those threats, and conducting peer reviews to 

encourage compliance with its standards. About 170 jurisdictions have pledged to comply with 

FATF standards. In 2003, FATF strengthened its longstanding 40 Recommendations to combat 

money laundering, and issued 9 Special Recommendations to combat terrorist financing.17 The 

FATF 40+9 Recommendations include provisions to combat the laundering of corruption 

proceeds, including Recommendation No. 6 which directs FATF member countries to require 

their financial institutions to screen clients to identify Politically Exposed Persons (PEPs) – 

defined as individuals entrusted with prominent public functions, their relatives, and close 

associates – “take reasonable measures to establish the source of wealth and the source of funds” 

in PEP transactions, and “conduct enhanced ongoing monitoring of the business relationship.” 

1997 OECD Anti-Bribery Convention. Another major development was the 1997 

OECD Convention on Combating Bribery of Foreign Public Officials in International Business 

Transactions, which obligates its signatories to criminalize the bribery of foreign officials.18 

                                                           

14 “Supplemental Staff Report on U.S. Accounts Used by Augusto Pinochet,” U.S. Senate Permanent Subcommittee 

on Investigations, S. Prt. 109-25, (March 16, 2005). 

15 U.S. v. Riggs Bank, Case No. 05-35 (RMU) (U.S.D.C. D.C.) (January 27, 2005); OCC Consent Order, In Re 

Riggs Bank, Case No. 2005-1 (May 13, 2004). 

16 See, e.g., Associated Press, “Final Chapter Nears in Riggs Bank Drama,” March 29, 2005. 

17 http://www.fatf-gafi.org/document/28/0,3343,en_32250379_32236930_33658140_1_1_1_1,00.html. 

18 See OECD website, http://www.oecd.org/document/20/0,3343,en_2649_34859_2017813_1_1_1_1,00.html. 
11 

Prior to this convention, payments made to foreign officials to obtain contracts or other goods or 

services were not always viewed as crimes; some countries even viewed such payments as tax 

deductible business expenses.19 The OECD Convention rejected that approach and instead 

followed the lead of the U.S. Foreign Corrupt Payments Act in outlawing such payments as 

bribes. To comply with the Anti-Bribery Convention’s requirements, signatories must enact 

domestic laws making the payment of bribes to foreign officials a criminal offense. The OECD 

concentrated at first on encouraging its member countries to enact those domestic laws. In recent 

years, the focus of the Anti-Bribery Convention has shifted to encouraging countries to enforce 

the laws now on the books.20 

2001 Basel Directive. In 2001, the Basel Committee on Banking Supervision, an 

international body of banking supervisors that formulates banking policy and guidance, brought 

the corruption issue to the attention of banks worldwide when it issued a statement on “customer 

due diligence.” That statement included strong language on the need for banks to identify PEPs 

and avoid the acceptance of corrupt proceeds: 

“Accepting and managing funds from corrupt PEPs will severely damage the bank’s own 

reputation and can undermine public confidence in the ethical standards of an entire 

financial centre, since such cases usually receive extensive media attention and strong 

political reaction. ... [I]t is clearly undesirable, unethical and incompatible with the fit 

and proper conduct of banking operations to accept or maintain a business relationship if 

the bank knows or must assume that the funds derive from corruption or misuse of public 

assets. There is a compelling need for a bank considering a relationship with a person 

whom it suspects of being a PEP to identify that person fully, as well as people and 

companies that are clearly related to him/her.”21 

2003 UN Convention Against Corruption. Still another key development was the 2003 

United Nations Convention Against Corruption (UNCAC). Currently, over 140 countries have 

signed the UNCAC, which entered into force in 2005.22 It requires signatories to criminalize a 

wide range of corrupt acts, including not only bribery and embezzlement, but also influence 

peddling and money laundering. Among other provisions, the UNCAC directs signatories to 

require their banks “to verify the identity of customers, to take reasonable steps to determine the 

identity of beneficial ownership of funds deposited into high-value accounts and to conduct 

enhanced scrutiny of accounts sought or maintained by or on behalf of individuals who are, or 

have been, entrusted with prominent public functions and their family members and associates.” 

In addition, UNCAC strengthened international anti-corruption efforts by requiring signatories to 

provide mutual legal assistance to extradite and prosecute offenders, including by gathering and 

providing evidence to the prosecuting country. UNCAC also required signatories to support the 

tracing, freezing, and seizure of illicit funds, placing a special focus on recovery of assets stolen 

by corrupt officials. UNCAC was further strengthened at a recent conference in Doha, when the 

                                                           

19 See, e.g., http://www.oecdobserver.org/news/fullstory.php/aid/245/Writing_off_tax_deductibility_.html. 20 In June 2009, Transparency International found that only Germany, Norway, Switzerland, and the United States 

were adequately enforcing anti-bribery laws. See http://www.transparency.org/news_room/latest_news/ 

press_releases/2009/2009_06_23_2009_oecd_progress_report. In one highly visible case, in 2006, the U.K. Serious 

Fraud Office scuttled an investigation into alleged bribe payments made by a large company, BAE, to Saudi Arabian 

officials to secure a large arms contract. http://www.oecd.org/dataoecd/43/13/38962457.pdf. 

21 Basel Committee on Banking Supervision, “Customer Due Diligence for Banks,” (Bank for International 

Settlements, October 2001), paragraphs 42-43. 

22 http://www.unodc.org/documents/treaties/UNCAC/Publications/Convention/08-50026_E.pdf. 
12 

signatories agreed to undergo a peer review process to evaluate their compliance with its 

provisions. 

StAR Initiative and 2009 PEP Study. Still another major anti-corruption advance 

occurred in 2007, when the World Bank and the United Nations Office on Drugs and Crime 

(UNODC) launched the Stolen Asset Recovery Initiative (StAR). StAR’s key mission is to help 

developing countries recover funds lost due to corruption. On its website, it states: “StAR’s 

objective is to reduce barriers to asset recovery and thereby encourage and facilitate more 

systematic and timely return of stolen assets.”23 To accomplish this objective, StAR works with 

countries around the world to build national capacity to detect and respond to corruption, 

finances training, develops “how to” guides and information systems, and assists with the 

preparation of reports, legal research, financial analyses, and mutual legal assistance requests. 

In November 2009, the StAR Initiative trained a spotlight on PEP issues by releasing a 

study examining how banks handle PEP accounts and transactions.24 The report concluded: 

“The picture today is of an overall failure of effective implementation of international PEP 

standards” and “surprisingly low compliance” with FATF requirements on PEPs.25 The report 

identified a number of problems, including a lack of political will to address PEP issues, the 

absence of enforceable legal and regulatory frameworks to address PEP issues, limited due 

diligence requirements, inadequate PEP databases, and use of associates, intermediaries, and 

legal entities to hide PEP involvement. To “prevent corrupt PEPs from abusing domestic and 

international financial systems to launder the proceeds of corruption,” the report recommends 

that banks strengthen PEP identification systems and use regulator-approved PEP databases; 

eliminate artificial limits on how long an individual can be considered a PEP; obtain written 

beneficial ownership information for each account to detect PEPs using third parties to hide their 

activities; request public officials to provide any asset and income disclosure forms filed with 

their government authorities; and conduct at least annual reviews of PEP accounts to get a 

complete view of the relationship and identify any suspicious transactions. 

G-8 and G-20 Anti-Corruption Efforts. In addition to the FATF, Basel, OECD, UN, 

and World Bank efforts, the G-8 and G-20 groups of countries have also undertaken anticorruption efforts. In 2003, for example, at the Evian Summit, the G-8 group of countries 

released an action plan entitled, “Fighting Corruption and Improving Transparency.”26 This 

statement laid out concrete steps aimed at fighting corruption, such as conditioning budgetary 

support and trade agreements on tackling corruption, encouraging participation in fiscal 

transparency programs, and passing domestic laws aimed at requiring financial institutions to 

conduct adequate due diligence to halt suspect transactions. It also stated that the G-8 countries 

supported requiring financial institutions to establish “procedures and controls to conduct 

                                                           

23 www.worldbank.org/star. 

24 The World Bank StAR Initiative, “Politically Exposed Persons: A Policy Paper on Strengthening Preventative 

Measures” (November 2009), www.worldbank.org/star. 

25 Id., at XV. 

26 See http://www.g8.fr/evian/english/navigation/2003_g8_summit/summit_documents/fighting_corruption_and_ 

improving_transparency_-_a_g8_action_plan.html. 
13 

enhanced due diligence on accounts of ‘politically exposed persons,’ and thereby to detect and 

report transactions that may involve proceeds of foreign official corruption.”27

More recently, in March 2009, the G-20 group of nations called for stronger enforcement 

of anti-corruption measures involving PEPs, in a Working Group on Reinforcing International 

Cooperation and Promoting Integrity in Financial Markets.28 In September 2009 at the 

Pittsburgh summit, the G20 Heads of State issued an official statement asking FATF “to help 

detect and deter the proceeds of corruption by prioritizing work to strengthen standards on 

customer due diligence, beneficial ownership, and transparency.”29 The Heads of State also 

confirmed their commitment to enforcement of transnational anti-bribery laws, ratification of the 

UN Convention Against Corruption, and adoption of a mechanism to measure compliance with 

that Convention. 

2008 Wolfsberg PEP Guidelines. The financial industry has also contributed to anticorruption efforts. About ten years ago, eleven of the world’s largest financial institutions 

formed the Wolfsberg Group as a voluntary private association dedicated to combating money 

laundering.30 In May 2008, as part of that effort, the Wolfsberg Group updated its 2003 

guidelines on handling PEPs and applied them to all PEP accounts rather than just private 

banking accounts.31 The guidelines discuss identification of PEPs, and use of relatives, third 

parties, and legal entities to disguise PEP activities. It recommends that banks ask potential 

clients whether they are PEPs, screen clients against PEP databases, and establish a procedure for 

senior bank officials’ approval of PEP clients. The guidelines also recommend enhanced 

monitoring of accounts controlled by PEPs, and training employees to increase awareness of the 

associated risks. The guidelines caution that existing customers may become PEPs in the future, 

and recommend enhanced due diligence when a PEP controls a corporation that has or is 

attempting to establish a relationship with the bank. 

Public Interest Organizations. Many other public interest organizations are also active 

in the battle against corruption. Transparency International, for example, works with local anticorruption groups around the world and publishes an annual Corruption Perceptions Index that 

focuses attention on corruption problems. Global Witness investigates and exposes corruption 

problems in specific countries. The Extractive Industries Transparency Initiative (EITI), 

launched in 2002, seeks to curb corruption primarily in the oil, gas, and mining sectors. EITI 

requires corporations involved in extractive industries to disclose royalty and other payments 

made to government officials, and then requires the recipient governments to disclose the 

revenues produced from those sectors, with the aim of increasing transparency and reducing 

corruption. Publish What You Pay (PWYP) is another group aimed at holding governments 

accountable for revenues derived from the oil, gas, and mining sectors. Active in nearly 70 

                                                           

27 Id., at paragraph 4.2. 

28 G20 Working Group on Reinforcing International Cooperation and Promoting Integrity in Financial Markets 

(SG2), March 27, 2009, at paragraph 41. 

29 G20, “Leaders’ Statement, The Pittsburgh Summit,” (September 24-25, 2009), at paragraph 42, 

http://www.pittsburghsummit.gov/mediacenter/129639.htm. 30 The participating banks are Banco Santander, Bank of Tokyo-Mitsubishi, Barclays, Citigroup, Credit Suisse, 

Deutsche Bank, Goldman Sachs, HSBC, JPMorgan Chase, Societe Generale, and UBS. 31 See “Wolfsberg Frequently Asked Questions (‘FAQs’) on Politically Exposed Persons (‘PEPs’),” 

http://www.wolfsberg-principles.com/pdf/PEP-FAQ-052008.pdf. 
14 

countries, PWYP urges governments to disclose not just company payments and government 

revenues, but also license agreements and contracts, while supporting a variety of transparency 

and anti-corruption initiatives. Still other groups, such as the Global Financial Integrity 

Program, the Tax Justice Network, and Sherpa contribute to anti-corruption efforts in a variety of 

ways, encouraging academic research, building anti-corruption capabilities, filing legal actions, 

and adding to the visibility and urgency of the issue. 

This Report seeks to contribute to U.S. and international anti-corruption efforts by 

exposing some of the tactics being used by PEPs to bring suspect funds into the United States 

and offering recommendations to strengthen U.S. AML and PEP controls. The Subcommittee’s 

investigation shows that, although U.S. financial institutions have become more vigilant over 

time and less willing to harbor suspect funds, PEPs are still often able to bring millions of dollars 

into the United States without having to answer questions about the source of their funds. Some 

of these PEPs escape detection for years at a time due to inadequate screening of potential PEP 

clients by banks, by using routine bank accounts not subject to enhanced monitoring, or by 

finding banks with lax due diligence procedures. Other PEPs conceal their transactions by acting 

through third parties, using shell company, attorney-client, law office, escrow agent, trust, and 

other accounts to move their funds into the U.S. financial system. Still others exploit weak 

controls in U.S. wire transfer systems to bypass AML or PEP scrutiny. The Report’s four case 

studies present actual examples of how some foreign officials, their relatives, or close associates 

have persuaded U.S. lawyers to help them circumvent AML and PEP safeguards at U.S. banks, 

convinced U.S. real estate and escrow agents to handle suspect funds, used a U.S. lobbyist’s 

bank account to distribute offshore funds, and even convinced U.S. university officials to accept 

millions of dollars from unknown offshore corporations. 

In addition to exposing some of these tactics, the Report offers a range of 

recommendations to stop the abuses. They include tightening bank procedures for screening 

PEP clients, requiring written beneficial ownership forms for accounts to detect PEP 

involvement, and conducting annual reviews of PEP accounts to identify suspicious transactions; 

eliminating existing AML exemptions for real estate and escrow agents handling millions of 

dollars in realty and vehicle transactions; cracking down on the misuse of attorney-client and law 

office accounts to carry out PEP transactions outside of bank AML and PEP controls; urging 

professional organizations to issue guidance to their members against facilitating suspect 

transactions for PEPs; calling on the United States to make better use of its visa and immigration 

systems to deny entry to corrupt foreign officials; and supporting the ongoing international effort 

to strengthen the anti-corruption and PEP provisions in FATF’s 40+9 Recommendations. 

Senior foreign officials engaged in large-scale corruption can have a disproportionate 

impact on a country, a region, even a generation of citizens victimized by a corrupt society. 

They can export problems by spreading corruption internationally, undermining the rule of law, 

encouraging crime, and even opening the door to terrorism. In some cases, those engaged in 

large-scale corruption have sought the services provided by a modern financial system that can 

store, protect, invest, and transfer their funds efficiently. To keep that corruption out of the 

United States, it is time to build stronger legal barriers, not only in our banks, but in a range of 

U.S. professions. 
15 

III. OBIANG CASE STUDY: USING U.S. LAWYERS, REAL ESTATE 

 AND ESCROW AGENTS, AND WIRE TRANSFER SYSTEMS TO 

BRING SUSPECT FUNDS INTO THE UNITED STATES 

Teodoro Nguema Obiang Mangue is the 40-year-old son of Teodoro Nguema Obiang 

Mbasogo, the President of Equatorial Guinea (EG). For more than ten years, he has held the post 

of EG Minister of Agriculture and Forestry, and has been seen as a likely successor to the EG 

Presidency. Mr. Obiang and his father have also long been suspected of accumulating 

substantial wealth from acts of corruption. This case study examines how, from 2004 to 2008, 

Mr. Obiang employed the services of a variety of U.S. professionals, including attorneys, real 

estate and escrow agents, insurance brokers, and others, to bring more than $100 million in 

suspect funds into the United States to advance his interests. At times, the U.S. professionals he 

employed acted openly on his behalf; at other times, they hid his involvement in transactions, 

especially from U.S. banks on guard against handling suspect funds. This case history details 

how Mr. Obiang employed these U.S. professionals to help him move money through at least six 

large and small U.S. banks, often by using attorney-client, escrow, or shell company accounts or 

by using wire transfer systems unequipped to detect or block incoming wire transfers from 

Obiang accounts abroad. 

This case history demonstrates, for example, how Mr. Obiang employed two U.S. 

attorneys, Michael Berger and George Nagler, to help him bring millions of dollars in suspect 

funds from Equatorial Guinea into the United States, carry out certain transactions, and pay his 

bills and expenses. These attorneys, each of whom operated independently of the other, formed 

U.S. shell companies under California law for Mr. Obiang’s use, including Beautiful Vision, 

Inc., Unlimited Horizon, Inc., Sweetwater Malibu, LLC, Sweetwater Management, Inc., and 

Sweet Pink, Inc. Each attorney helped open U.S. bank accounts for those shell corporations and 

helped use some of those corporate accounts to pay Mr. Obiang’s bills and expenses. In 

addition, each allowed his own attorney-client and law office accounts to serve as conduits for 

Obiang funds, accepting millions of dollars in wire transfers from Equatorial Guinea, moving 

those funds into other Obiang-related accounts, and using the funds to pay Obiang-related bills 

and expenses. Each attorney also worked with other U.S. professionals, including bankers, 

property managers, insurance brokers, and real estate and escrow agents, to advance 

Mr. Obiang’s interests. 

In addition, Mr. Obiang employed two U.S. real estate agents, Neil Baddin and John 

Kerrigan, to buy and sell high-end California real estate, including a 2006 purchase of a $30 

million residence in Malibu and 2004 sale of a $7.7 million residence near Los Angeles. A U.S. 

escrow company, First American Trust, helped Mr. Obiang purchase the Malibu property 

without using a mortgage, accepting $30 million in wire transfers from Equatorial Guinea to 

complete the transaction. Another U.S. escrow company, Insured Aircraft Title Services, Inc. 

(IATS), facilitated Mr. Obiang’s purchase of a Gulfstream jet, again without a mortgage, by 

accepting $38.5 million in wire transfers from Equatorial Guinea and forwarding those funds 

through U.S. bank accounts for the seller of the aircraft. IATS agreed to handle the Gulfstream 

transaction after another U.S. escrow company, McAfee & Taft, had declined, as an anti-money 

laundering precaution, to complete the purchase without information on the source of the $38.5 

million. 
16 

Documents also show that, throughout the four years examined by the Subcommittee, 

Mr. Obiang exploited lax anti-money laundering (AML) and PEP controls at U.S. financial 

institutions. Documents reviewed by the Subcommittee show, for example, that Mr. Obiang 

surreptitiously used attorney-client, law office, shell company, and other third party accounts to 

obtain access to the U.S. financial system, even at banks that had previously closed his accounts 

and declined to do business with him. In addition, from 2004 to 2008, he brought over $100 

million into the United States using wire transfer systems at just two U.S. financial institutions, 

Wachovia Bank and Citibank. Neither system had been programmed to detect or block wire 

transfers bearing his name. In 2009, Wachovia took steps for the first time to block wire 

transfers with Mr. Obiang’s name, while Citibank declined to take the same action due to 

projections that identifying, freezing, and investigating these wire transfers would generate too 

much work for its anti-money laundering staff. 

Many of the U.S. professionals examined in this case history were under no legal 

obligation to take anti-money laundering precautions when dealing with a PEP, to evaluate the 

source of funds supplied by a PEP, or to refrain from handling suspect funds involving a PEP. 

For example, attorneys are currently not required by U.S. anti-money laundering (AML) statutes 

to establish AML controls to prevent or detect money laundering, and no U.S. professional rules 

or voluntary AML guidelines require attorneys to perform due diligence before accepting a 

client, evaluate the source of client funds, or refrain from using their attorney-client or law office 

accounts to conceal PEP transactions from the financial institution providing the accounts.32 

In 2008, for the first time, the Financial Action Task Force on Money Laundering 

(FATF) issued international guidance for members of the legal profession to address many AML 

issues.33 The FATF guidance recommends, for example, that attorneys perform due diligence 

before accepting clients, evaluate the risk posed by particular clients, analyze the source of client 

                                                           

32 Attorneys are not subject to the major U.S. AML laws that require banks and other entities to establish AML 

programs to prevent, detect, and report suspicious transactions to law enforcement. See, e.g., list of covered entities 

at 31 U.S.C. §5312(a)(2). The American Bar Association does not provide official guidance for U.S. attorneys on 

how to handle AML issues or establish AML programs, although discussions and work to develop such guidance 

have been underway since at least 2002. The American Bar Association’s existing Model Rules of Professional 

Conduct also do not explicitly address AML issues. See American Bar Association Model Rules of Professional 

Conduct, http://www.abanet.org/cpr/mrpc/rule_1_15.html, (9/16/2009). For example, while the Model Rules 

require attorneys to track and safeguard client property held in attorney-client accounts, they do not address issues 

related to using an attorney-client account to conceal a client’s transactions or circumvent AML or PEP controls at a 

financial institution. The Model Rules do caution attorneys against engaging in criminal or fraudulent conduct. See, 

e.g., Model Rule 1.2(d) (an attorney “shall not counsel a client to engage, or assist a client, in conduct that the 

lawyer knows is criminal or fraudulent”); Rule 8.4 (it is professional misconduct for an attorney to engage in 

conduct “involving dishonesty, fraud, deceit or misrepresentation”). Attorneys are also subject to U.S. criminal 

prohibitions against participating in a money laundering offense, see, e.g., 18 U.S.C. §§ 1956, 1957; and doing 

business with terrorists, narcotics traffickers, or other criminals identified on lists compiled by the Office of Foreign 

Assets Control, see OFAC lists, U.S. Dept. of Treasury, http://www.ustreas.gov/offices/enforcement/ofac/sdn/. In 

addition, attorneys engaged in a business are required to file reports, Form 8300, with the Internal Revenue Service 

if they receive cash payments of $10,000 or more. (“Each person engaged in a trade or business who, in the course 

of that trade or business, receives more than $10,000 in cash in one transaction or in two or more related 

transactions, must file Form 8300.”) See http://www.irs.gov/pub/irs-pdf/f8300.pdf. See also United States v. 

Moffitt, Zwerling & Kemler, 83 F.3d 660 (4th Cir. 1996)(law firm that did not examine the source of its fees can be 

required to forfeit them as proceeds of narcotics trafficking). 33 See FATF, “RBA Guidance for Legal Professionals,” October 23, 2008. 
17 

funds, and monitor client activity for suspicious transactions. Paragraph 109 of the FATF 

guidance recommends that attorneys treat PEPs as high risk clients requiring enhanced due 

diligence and monitoring. In addition, Paragraph 110 recommends that attorneys treat certain 

services as high risk, including services in which attorneys “handle the receipt and transmission 

of funds through accounts they actually control.” This guidance, however, was issued after most 

of the events reviewed in this Report and was never intended to be legally binding on U.S. 

attorneys. 

With respect to real estate and escrow agents, since 1988, U.S. AML laws have identified 

“persons involved with real estate closings and settlements” and “business[es] engaged in vehicle 

sales, including automobile, airplane, and boat sales” as vulnerable to money laundering abuses 

and in need of AML safeguards, due to the large amounts of money involved in their 

transactions.34 In 2001, after the 9/11 terrorist attack and as part of its effort to strengthen U.S. 

AML safeguards, the Patriot Act explicitly required such businesses to establish AML programs, 

unless exempted by the Treasury Department.35 Six months later, however, in 2002, the 

Treasury Department “temporarily” exempted both categories of businesses from having to 

establish AML programs.36 In 2003, Treasury solicited comments to develop a proposed AML 

rule for real estate businesses, but took no further action.37 Today, eight years after enactment of 

the Patriot Act, the Treasury Department has yet to propose or finalize a rule requiring 

businesses engaged in either real estate closings or vehicle sales, including aircraft sales, to 

establish AML safeguards. In addition, none of the relevant business sectors has developed 

voluntary AML guidance for their members.38 

In contrast, since 2001, U.S. financial institutions have been required by law to set up 

AML programs, with AML policies, procedures, and controls; a compliance officer; employee 

training; and an internal audit function to ensure compliance.39 Their AML programs typically 

require personnel to know their customers, evaluate the source of client funds, identify high risk 

clients, apply enhanced monitoring to high risk clients, and report suspicious transactions to law 

enforcement. Despite these requirements, some of the banks handling Obiang-related accounts 

                                                           

34 See 31 U.S.C. § 5312(a)(2)(T) and (U). 

35 See Section 352 of the Patriot Act of 2001, P.L. 107-56 (October 26, 2001), codified at 31 U.S.C. § 5318(h). 36 See 31 CFR § 103.170, as codified by interim final rule published at 67 FR 21110 (April 29, 2002, as amended at 

67 FR 67547 (November 6, 2002) and corrected at 67 FR 68935 (November 14, 2002). 

37 See Advance Notice of Proposed Rulemaking on Anti-Money Laundering Program Requirements for ‘Persons 

Involved in Real Estate Closings and Settlements,’ 68 FR 17569 (April 10, 2003), http://www.fincen.gov/ 

statutes_regs/frn/pdf/352_real_estate_04102003.pdf. 38 The National Association of Realtors, for example, has developed a detailed Code of Ethics for real estate agents, 

but none of the Code provisions addresses AML concerns. See 2010 Code of Ethics and Standards of Practice of the 

National Association of Realtors, www.realtor.org. The Association has instead developed educational materials for 

its members on money laundering and terrorist financing, without official guidance on how to address the issues. 

See, e.g., “The Basics, Money Laundering and Terrorist Financing,” 

http://www.realtor.org/government_affairs/gapublic/business_issues_money_laundering; Subcommittee interview of 

National Association of Realtors, January 13, 2010. Real estate and escrow agents, like attorneys, are subject to 

U.S. criminal prohibitions against participating in a money laundering offense, see, e.g., 18 U.S.C. §§ 1956, 1957, 

and doing business with terrorists, narcotics traffickers, or other criminals identified on lists compiled by the Office 

of Foreign Assets Control, http://www.ustreas.gov/offices/enforcement/ofac/sdn/. Real estate and escrow agents are 

also required to file Form 8300 reports with the Internal Revenue Service if they receive cash payments of $10,000 

or more. 

39 See Section 352 of the Patriot Act of 2001, P.L. 107-56 (October 26, 2001), codified at 31 U.S.C. § 5318(h). 
18 

did not designate the accounts as high risk and allowed them to receive suspect funds from 

Equatorial Guinea. 

A. Background 

Equatorial Guinea. Equatorial Guinea is a small country of about 600,000 persons 

located on the west coast of Africa between the countries of Cameroon and Gabon.40 Its official 

languages are Spanish and French.41 Originally a Portuguese colony, Equatorial Guinea was 

ceded to Spain in 1778, which granted it independence 190 years later in 1968.42 

Equatorial Guinea (EG) possesses substantial natural resources. Following the discovery 

of oil in 1996, Equatorial Guinea has become the third largest oil producer in sub-Saharan 

Africa,43 generating about 500,000 barrels per day by 2007.44 In 2007 alone, Equatorial Guinea 

reportedly sold about 1.8 billion barrels of oil for $4.3 billion, which comprised about 90 percent 

of the EG economy.45 U.S. oil companies help produce roughly 75 percent of Equatorial 

Guinea’s oil,46 leading to the institution of direct airline flights between Houston, Texas and the 

EG capital city, Malabo.47 In addition to oil, Equatorial Guinea has significant timber resources, 

which provides its second major export commodity. 

EG oil and timber resources have done little, however, to raise the living standards of the 

EG population. Although the country ranks in the top fifth of nations in gross domestic product 

per capita due largely due to its oil revenues,48 poverty is widespread. Equatorial Guinea ranks, 

for example, 115th of 179 nations on the United Nation’s Human Development Index.49 EG 

citizens have a low life expectancy and suffer from the 17th highest infant mortality rate in the 

world.50 The World Bank has determined that, between 1995 and 2002, roughly 39 percent of 

                                                           

402008 World Fact Book, U.S. Central Intelligence Agency. 

41 Id. 

42 U.S. Department of State, Background Notes: Equatorial Guinea, http://www.state.gov/r/pa/ei/bgn/7221.htm; 

2008 World Fact Book, U.S. Central Intelligence Agency. 

43The World Bank, Equatorial Guinea, 

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/EQGUINEAEXTN/0,,menuPK:3521

97~pagePK:141132~piPK:141109~theSitePK:352171,00.html. 

44 U.S. Department of State, Background Notes: Equatorial Guinea, http://www.state.gov/r/pa/ei/bgn/7221.htm. 45 “Equatorial Guinea; Poverty Rife in Africa’s ‘Kuwait,’” Africa News (10/6/2008), citing Bank of Central African 

States, http://allafrica.com/stories/200810061482.html. 

46 Id. 

47 The Independent, “A Murderous Dictator, His Rapper Son and a $700M-a-Year Oil Boom,” March 16, 2004. 

http://www.independent.co.uk/news/world/africa/a-murderous-dictator-his-rapper-son-and-a-700mayear-oil-boom566494.html. 

48 2008 World Fact Book, U.S. Central Intelligence Agency. 

49 The Human Development Index is a product of the United Nations Development Programme (UNDP). It 

“provides a composite measure of three dimensions of human development: living a long and healthy life (measured 

by life expectancy), being educated (measured by adult literacy and enrolment at the primary, secondary and tertiary 

level) and having a decent standard of living (measured by purchasing power parity, PPP, income).” See: 

http://hdrstats.undp.org/en/countries/country_fact_sheets/cty_fs_GNQ.html. 

50 2008 World Fact Book, U.S. Central Intelligence Agency. See also U.N. Human Development Reports, 

http://hdr.undp.org/en/statistics/. 
19 

EG children under the age of five were malnourished, and only 44 percent of the population had 

access to safe drinking water.51 

Equatorial Guinea has had only two presidents since gaining independence in 1968. 

Francisco Macias Nguema was elected the first EG President in 1968. By 1972, he had taken the 

title of “President-for-Life,”52 and during ten years of autocratic rule, saw the EG population 

contract by one-third. In 1979, his nephew, Teodoro Obiang Nguema Mbasogo, led a successful 

coup, executed his uncle, and assumed the presidency. 

Over the next 30 years, President Obiang was declared the winner of five successive 

elections to seven-year terms, in 1982, 1989, 1996, 2002, and 2009.53 International observers 

have criticized the fairness of those elections, questioning vote totals that, for example, in 1996 

and 2002, showed President Obiang winning 98% and 97% of the vote, respectively.54 His vote 

total in 2009 was announced as 95%.55 Critics have also condemned his administration for 

widespread human rights abuses and suppression of political opposition.56 In its 2008 Human 

Rights Report, the U.S. State Department noted improvements from past years, but also 

criticized a host of EG human rights abuses, including “limited ability of citizens to change their 

government; increased reports of unlawful killings by security forces; government-sanctioned 

kidnappings; systematic torture of prisoners and detainees by security forces; life threatening 

conditions in prisons and detention facilities; impunity; arbitrary arrest, detention, and 

incommunicado detention; harassment and deportation of foreign residents with limited due 

process; judicial corruption and lack of due process; restrictions on the right to privacy; 

restrictions on freedom of speech and of the press ... [and] government corruption.”57 

Transparency International’s Corruptions Perception Index has consistently ranked 

Equatorial Guinea as having one of the most corrupt images in the world, with the 2008 index 

ranking it 171 out of the 180 countries evaluated.58 During the same time period, President 

Obiang’s personal wealth appears to have increased. In 2006, President Obiang was named by 

Forbes as one of the world’s ten wealthiest rulers, with an estimated personal wealth of $600 

million.59 In 2008, Parade Magazine named President Obiang as one of the world’s worst 

dictators.60

                                                           

51The World Bank, Equatorial Guinea, 

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/EQGUINEAEXTN/0,,menuPK:3521

97~pagePK:141132~piPK:141109~theSitePK:352171,00.html. 

52 U.S. Department of State, Background Notes: Equatorial Guinea, http://www.state.gov/r/pa/ei/bgn/7221.htm. 53 Id. 

54 Id. 

55 See 12/2/09 statement issued by the EG Ambassador to the United States, Purificacion Angue Ondo, “Republic 

of Equatorial Guinea Releases Final Presidential Election Results,” available on PRNewsire-USNewsWire. 56 See, e.g., CBS News: 60 Minutes, “Kuwait of Africa,” July 18, 2004, http://www.cbsnews.com/stories/ 

2003/11/14/60minutes/main583700.shtml. 

57 U.S. Department of State, 2008 Human Rights Report: Equatorial Guinea, February 25, 2009. 

58 Transparency International, “Transparency International 2008 Corruption Perceptions Index.” 

http://www.transparency.org/news_room/in_focus/2008/cpi2008/cpi_2008_table. 

59 See forbes.com, “Fortunes of Kings, Queens, and Dictators,” May 5, 2006, see online at 

http://www.forbes.com/2006/05/04/rich-kings-dictators_cz_lk_0504royals.html. 60 Parade Magazine, “The World’s Worst Dictators,” 2008, http://www.parade.com/dictators/2008/index.jsp. 
20 

 Teodorin Obiang. Teodoro Nguema Obiang Mangue, nicknamed “Teodorin,” is the 

eldest son of President Obiang and First Lady Constancia Mangue Nsue Okomo.61 For at least 

ten years, he has held the post of EG Minister of Agriculture and Forestry. He reportedly 

collects an official government salary of approximately $5,000 per month or $60,000 per year.62 

Despite this modest salary, Mr. Obiang is known to live a lavish lifestyle with multiple real 

estate holdings, automobiles, and extravagant spending sprees.63 

In 2004, as part of an investigation into how Riggs Bank was implementing Patriot Act 

provisions to curb money laundering and foreign corruption, the Subcommittee released 

documents related to 60 Riggs Bank accounts that had been opened by Equatorial Guinea, EG 

officials, and their relatives, including Teodorin Obiang. One Riggs Bank analysis evaluated 

Mr. Obiang’s business activities, noting that in addition to his government position, he was the 

sole owner of a key EG forestry company, Grupo Sofana, with exclusive rights to export EG 

timber, and controlled an affiliated EG timber company, Somagui Forestal.64 The Riggs 

documentation also showed that, from 1997 through 2003, Mr. Obiang was associated with over 

a dozen U.S. bank accounts which, at times, received millions of dollars in deposits. The 2004 

report released by the Subcommittee summarized these accounts as follows. 

“While the E.G. President’s eldest son, Teodoro Nguema Obiang, the E.G. Minister of 

Forestry, did not have any personal accounts at Riggs, he was the beneficial owner of 

three accounts opened in the name of companies he controlled. Two of these accounts 

were opened in the name of his California entertainment company, TNO Entertainment 

LLC. The first, Account No. 76-889-555, was opened in 2000 and closed in 2001, and 

the funds were transferred to Account 76-923-450, which was opened in 2001 and 

remained open in early 2004. From 2001 to 2003, the second account had balances that 

                                                           

61 The Scotsman, “Coup Plot Conviction Increases the Pressure on Mark Thatcher,”August 28, 2004. 

http://news.scotsman.com/topstories/Coup-plot-conviction-increases-the.2559206.jp. 62 See African Development Information Service – People Record: Teodoro Nguema Obiang, 

http://www.afdevinfo.com/htmlreports/peo/peo_8085.html. 

63 See, e.g., The Times Online, “Playboy Waits for His African Throne,” September 3, 2006, 

http://www.timesonline.co.uk/tol/news/world/article626511.ece; The Star, “African Oil Sheik Goes on South 

African Spending Spree,” July 20, 2005, page 1. Mr. Obiang’s well-publicized spending sprees include the 

following: 

 According to press reports, on one weekend in 2005, Mr. Obiang purchased two Bentleys, a Lamborghini, 

and two multi-million dollar luxury houses in Cape Town, South Africa, http://www.iol.co.za/index.php? 

set_id=1&click_id=86&art_id=vn20050720063046112C699596; Times Online “President’s Playboy Son 

Splashes Out £1M in Luxury Car Spree,” July 21, 2005, http://www.timesonline.co.uk/tol/ 

news/world/article546244.ece; The Star, “Playboy’s High Life: Dictator’s Son Spends Millions on Cars, 

Houses, and Champaigne in SA”, July 20, 2005. http://www.thestar.co.za/index.php?fArticleId=2631945. 

 In 2003, Mr. Obiang was observed traveling around Paris in a Lamborghini and purchasing as many as 30 

designer suits in one afternoon while being followed by French media. CBS News: 60 Minutes, “Kuwait 

of Africa,” July 18, 2004, http://www.cbsnews.com/stories/2003/11/14/60minutes/main583700.shtml. 

 According to another press report, in 2006, Mr. Obiang spent nearly $700,000 to rent Microsoft founder 

Paul Allen’s yacht “Tatoosh” for a Christmas cruise off St. Barts to entertain a former girlfriend. NY Daily 

News, “Has Eve’s Fling Brought Her a Despot of Gold,” February 20, 2006, http://www.nydailynews. 

com/archives/gossip/2006/02/20/2006-02-20_has_eve_s_fling_brought_her_.html. 64 “Money Laundering and Foreign Corruption: Enforcement and Effectiveness of the Patriot Act,” U.S. Senate 

Permanent Subcommittee on Investigations, July 15, 2004 (hereinafter “2004 Subcommittee Investigation into 

Riggs Bank”) 
21 

fluctuated between about $17,000 and $11.6 million. The third account, Account No. 25-

380-038, was opened in the name of Awake Ltd., a Bahamian offshore shell company 

that Riggs helped to establish. This money market account, opened in 2002, saw virtually 

no account activity.65 ... 

“The Subcommittee also identified two other sets of bank accounts associated with the 

President’s son, opened at JPMorgan Chase and Citigroup. At JPMorgan Chase, four 

accounts and three CDs were opened in the name of the President’s son, including a 

savings account and three checking accounts which together held about $75,000 in 2003. 

All three CDs had matured in 2002, and at that time had an aggregate value of more than 

$1.7 million. At Citigroup, the Subcommittee identified four accounts that had been 

opened in the name of the son’s company, TNO Entertainment. The earliest of these 

accounts was opened in 1997, and all four were closed in early 2000. They included a 

checking account, money market account, CitiGold account, and securities investment 

account. These accounts were apparently dormant at times, but in mid 1999, received 

deposits in a relatively short period totaling about $11.8 million. After noting suspicious 

account activity, Citigroup closed these accounts in 2000. Riggs Bank apparently 

identified at least one additional set of accounts held by the E.G. President’s son at City 

National Bank of Beverly Hills, California.”66

Mr. Obiang has admitted in a number of settings that, in addition to his government post, 

he owns a number of companies. For example, in 2004, when a U.S. bank asked him to explain 

the source of funds for a substantial wire transfer, he sent an email explaining: “The wire 

transfer was from one of my companies in Equatorial Guinea. The funds that were transferred to 

me did not come from any illegal source. It was either from Somagui Forestal or Sofona.”67 In a 

2006 court proceeding examining ownership of two houses in South Africa, Mr. Obiang 

produced wire transfers showing that he had paid for the houses with funds from an EG account 

held by Socage. In a sworn and signed affidavit submitted to the court, he wrote: “One of the 

companies that I own is SOCIEDAD DE CARRETERAS DE GUINEA ECUATORIAL 

(‘SOCAGE’), with a bank account at the CCEI BANK GE, in BATA, the commercial capital of 

the country.”68

Many of the transactions examined in this Report involve wire transfers sent by Somagui 

Forestal or Socage from bank accounts in Equatorial Guinea; a few involve funding transfers 

from accounts opened in the name of TNO Entertainment, LLC, a California corporation that is 

associated with Mr. Obiang and was still active in 2009.69

                                                           

65 2004 Subcommittee Investigation into Riggs Bank, at 159. 

66 Id., at 160. 

67 9/30/04 Declaration of Teodoro Ngeuma Obiang, Obiang v. City National Bank, Case No. SC 083177, explaining 

the source of funds for a substantial wire transfer he had sent to the bank, CNB0004068. 

68 8/8/06 Second Respondent’s Answering Affidavit, Maseve Investments 7 (PTY) Ltd. v. Equatorial Guinea, (High 

Court of South Africa (Cape Provincial Division), Case No. 1407/2006, at 13. (Emphasis in original.) 

69 “TNO” apparently stands for Teodoro Nguema Obiang. Mr. Obiang is also active in the media in Equatorial 

Guinea, apparently owing the only privately-held radio station, Radio Asonga, and serving as director of the state 

owned TV Asonga. 
22 

 During the course of the investigation, Subcommittee staff has communicated with 

Mr. Obiang’s attorneys, raising questions as to the source of his funds. Most recently, in 

December of 2009, the Subcommittee contacted Mr. Obiang and again offered an opportunity for 

him to provide information to the Subcommittee. The Embassy of Equatorial Guinea responded 

and noted that it had passed the Subcommittee’s request along to Mr. Obiang. Subcommittee 

staff then met with Mr. Obiang’s attorney who promised to provide information as to the source 

of Mr. Obiang’s funds. 

Corruption Allegations. Members of the Obiang family have long been suspected of 

misappropriating Equatorial Guinea’s oil and timber wealth for personal gain.70 In addition to 

allegations in the media, over the past five years several civil and criminal legal actions have 

raised corruption concerns involving President Obiang, his son, and other relatives. 

In 2004, this Subcommittee charged that Riggs Bank in Washington, D.C. had opened 

more than 60 accounts and certificates of deposit for the EG government, EG officials, and their 

relatives and, when administering them, had “turned a blind eye to evidence suggesting the bank 

was handling the proceeds of foreign corruption, and allowed numerous suspicious transactions 

to take place without notifying law enforcement.” Documents released by the Subcommittee 

showed that the bank had opened multiple personal accounts for the EG President and his wife, 

helped establish two offshore corporations controlled by President Obiang, and over a three-year 

period from 2000 to 2002, had “facilitated nearly $13 million in cash deposits into Riggs 

accounts controlled by the E.G. President and his wife.”71 The Subcommittee also released 

documents showing that about $35 million had been withdrawn from the country’s oil revenue 

accounts at Riggs Bank and wire transferred to accounts opened in the name of Apexside 

Trading Ltd. and Kalunga Co., offshore shell corporations associated with EG officials, 

including President Obiang.72

In 2006, a civil complaint was filed in the High Court of South Africa by a South African 

firm, Maseve Investments, which was attempting to collect on a debt that it claimed the EG 

government owed in connection with a contract to construct an EG airport. To collect the debt, 

the plaintiff attempted to seize two luxury Cape Town homes that were owned by Mr. Obiang, 

but which the plaintiff alleged had been purchased with EG government funds sent from an 

account at Riggs Bank.73 Mr. Obiang filed a sworn affidavit in response, producing wire 

transfers showing that the houses had been purchased with funds from an EG account held in the 

name of a company he owned, Socage.74 He stated in the affidavit: 

                                                           

70 See, e.g., Washington Post, “Oil Gives African Nation a Chance for Change: Despite Leader’s Promises, Many 

Fear People of Equatorial Guinea Will Not Benefit From Windfall,” May 13, 2001; CBS News: 60 Minutes, 

“Kuwait of Africa,” July 18, 2004, http://www.cbsnews.com/stories/2003/11/14/60minutes/main583700.shtml. 

71 2004 Subcommittee Investigation into Riggs Bank, at 129. 

72 Id., at 167. 

73 See Maseve Investments 7 (Pty) Ltd. v. Republic of Equatorial Guinea, (High Court of South Africa, Cape 

Provincial Division), Case No. 1407/2006. See also The Cape Times, “Equatorial Guinea playboy’s Cape homes 

seized,” February 16, 2006; The Guardian, “The tiny African State, the President's Playboy Son and the $35M 

Malibu Mansion,” November 10, 2006. 

74 8/8/06 Affidavit of Teodoro Nguema Obiang, Second Respondent, Maseve Investments 7 (PTY) Ltd. v. 

Equatorial Guinea, (High Court of South Africa, Cape Provincial Division), Case No. 1407/2006. 
23 

“Cabinet ministers and public servants in Equatorial Guinea are by law allowed to own 

companies that, in consortium with a foreign company, can bid for government contracts 

and should the company be successful, then what percentage of the total cost of the 

contract the company gets, will depend on the terms negotiated between the parties. But 

in any event, it means that a cabinet minister ends up with a sizeable part of the contract 

price in his bank account.”75 

The U.S. Department of Justice later characterized this statement as follows: “Although Teodoro 

Nguema OBIANG has claimed that this practice was legal, the assertion also suggests that he 

may be receiving bribes or extortion payments in the form of a percentage of contract revenue.”76

In March 2007, three nonprofit anti-corruption organizations, Sherpa, Survie, and the 

Federation of the Congolese Diaspora, filed a legal complaint before the French Public 

Prosecutor alleging the ruling families of Equatorial Guinea, Gabon, Angola, Burkina Faso, and 

Congo owned millions of dollars worth of properties in France “that could not be the fruits of 

their official salaries ... but would have likely required the use of stolen public assets.”77 The 

complaint attached articles and reports with alleged information about property and vehicles 

owned by the Heads of State and their relatives, including the Obiangs. According to a later 

legal pleading filed in the case, in June 2007, a police investigation was launched in response to 

the complaint which confirmed most of the allegations and uncovered additional luxury 

properties, vehicles, and bank accounts belonging to the cited Heads of State and their 

relatives.78 The police allegedly confirmed, for example, that “Teodorin Obiang, son of the 

President of Equatorial Guinea, acquired at least 5 million Euros worth of luxury cars.”79 In 

November 2007, however, the police investigation was halted by the Public Prosecutor. 

On July 9, 2008, another nonprofit organization dedicated to combating corruption, 

Transparency International France (TI France), together with two citizens from Gabon and the 

Congo, re-filed the complaint before the French Public Prosecutor with the goal of asking an 

investigating judge to reopen the investigation.80 On December 2, 2008, after the Public 

Prosecutor declined to pursue the case, TI France filed a civil party petition with an investigating 

judge alleging that the presidents of Equatorial Guinea, Gabon, and Congo had acquired luxury 

                                                           

75 Id., at 12. 

76 9/4/07 memorandum from the U.S. Department of Justice to the Central Authority of France, MEW:SCR.PJR 

182-21407, at 5-6, no bates number. See also The Financial Times, “Taking a Cut Acceptable, Says African 

Minister,” October 25, 2006, http://www.ft.com/cms/s/0/98cb7e86-645a-11db-ab21-0000779e2340. 

html?nclick_check=1. 

77 Legal memorandum prepared by Sherpa & Transparency International France (TI France), Admissibility of TI 

France’s complaint with civil party petition, (French court of appeals, June 2009), at 1. This memorandum recounts 

the history of the anti-corruption case filed by the three organizations from 2007 to 2009. The initial 2007 

complaint is Plainte Pres le Tribunal de Grande Instance de Paris, undated, PSI-OECD-00001-13. 78 Legal memorandum prepared by Sherpa & TI France, Admissibility of TI France’s complaint with civil party 

petition, (French court of appeals, June 2009), at 1. 

79 Id. Later, in 2009, a 600-page compilation of documents related to the French police investigation was leaked to 

the press. Among other information, those documents indicate that the police had identified a luxury Paris 

apartment owned by Teodorin Obiang as well as eight luxury cars worth a total of $6.2 million. MWC News, 

October 30, 2009, “France Halts African Leaders Probe,” mwcnews.net/content/view/34091/51/. See also Agence 

France, “French Corruption Suit Targets African Leaders,” December 2, 2008. 80 Legal memorandum prepared by Sherpa & TI France, Admissibility of TI France’s complaint with civil party 

petition, (French court of appeals, June 2009), at 2. 
24 

homes and other property in France with embezzled public funds and requesting that an 

investigation be undertaken.81 On April 8, 2009, the Public Prosecutor recommended that the TI 

France petition be ruled inadmissible due to a lack of standing.82 On May 5, 2009, the Dean of 

investigating judges rejected that recommendation and instead held that the case could 

continue.83 The Public Prosecutor appealed the Dean’s decision, and in October 2009, a French 

appeals court ruled that TI France did not have standing to file the petition and dismissed it.84 

That ruling is now on appeal to France’s highest court.85 

While this lengthy civil proceeding was unfolding in court, in September 2007, the U.S. 

Department of Justice (DOJ) sent a formal request to the “Central Authority of France” 

requesting assistance with an ongoing U.S. criminal investigation into Teodorin Obiang and his 

associates.86 The 2007 DOJ memorandum making this request was leaked to the press in 

November 2009.87 The memorandum stated that Mr. Obiang “has been the subject of various U.S. 

government inquiries for several years.”88 It stated that DOJ and the U.S. Department of 

Homeland Security’s Immigration and Customs Enforcement (ICE) were “investigating 

suspected criminal conduct of Teodoro Nguema OBIANG and his associates involving the illicit 

transfer and laundering of assets believed to be derived from extortion, bribery and/or the 

misappropriation, theft, or embezzlement of public funds.” It continued: 

“[S]ources have informed investigators that Teodoro Nguema OBIANG, in his official 

capacity, has instituted a large ‘revolutionary tax’ on timber, but insisted that the 

payments be made directly to him, either in cash or through checks to SOMAGUI 

                                                           

81 Plainte Avec Constitution de Partie Civile Pres le Tribunal de Grande Instance de Paris, undated, PSI-OECD00014-38; legal memorandum prepared by Sherpa & TI France, Admissibility of TI France’s complaint with civil 

party petition, (French court of appeals, June 2009), at 2. The civil party petition was also filed by Gregory Ngbwa 

Mintsa, a Gabonese citizen. 

82 Legal memorandum prepared by Sherpa & TI France, Admissibility of TI France’s complaint with civil party 

petition, (French court of appeals, June 2009), at 3. 

83 Ordonnance D’Irrecevabilite Partielle De Plainte Avec Constitution De Partie Civile, Tribunal de Grande Instance 

de Paris, May 5, 2009, PSI-Transparency-USA.org 00001-00005; legal memorandum prepared by Sherpa & TI 

France, Admissibility of TI France’s complaint with civil party petition, (French court of appeals, June 2009), at 5; 

TI France Press Release, “Corruption case filed by Transparency International France and a Gabonese citizen ruled 

partially admissible,” May 5, 2009. See also BBC News, “Lawsuit on Africa Leaders ‘Valid,’” May 6, 2009, 

http://news.bbc.co.uk/2/low/africa/8035218.stm; Connect Africa, “African Leaders to be Tried by French 

Magistrate,” May 6, 2009, http://connectafrica.wordpress.com/2009/05/06/african-leaders-to-be-tried-by-frenchmagistrate. 

84 Cour D’Appel De Paris Pole 7 Deuxieme Chambre De L’Instruction, Appel D’une Ordonnance De Recevabilite 

De Constitution De Partie Civile Arret, October 29, 2009, PSI-Transparency-usa.org 00006-15. See also TI France 

Press Release, “Appealing for justice: three African presidents and their French assets,” October 29, 2009; MWC 

News, “France Halts African Leaders Probe,” October 30, 2009; Agence France, “French Corruption Suit Targets 

African Leaders,” December 2, 2008; Impunity Watch, “French Court Halts Corruption Probe,” October 31, 2009, 

http://www.impunitywatch.com/impunity_watch_europe/2009/10/french-court-halts-corruption-probe.html. 85 TI France Press Release, “Appealing for justice: three African presidents and their French assets,” October 29, 

2009. 

86 9/4/07 memorandum from the U.S. Department of Justice to the Central Authority of France, MEW:SCR.PJR 

182-21407, no bates number (hereinafter “2007 DOJ memorandum”). 

87 The DOJ memorandum was posted on the website of the New York Times on November 17, 2009. See New 

York Times, “Taint of Corruption is No Barrier to U.S. Visa,” November 16, 2009, 

http://www.nytimes.com/2009/11/17/us/17visa.html. 

88 2007 DOJ memorandum at 3. 
25 

FORESTAL, a forestry company owned by Teodoro Nguema OBIANG. ... [I]n August 

2006, Teodoro Nguema OBIANG filed an affidavit with the High Court of South Africa 

in a civil matter regarding whether funds held by Teodoro Nguema OBIANG belonged to 

the Equatorial Guinea government, a contention that Teodoro Nguema OBIANG 

contested. In his affidavit, Teodoro Nguema OBIANG admitted that cabinet ministers in 

Equatorial Guinea form private companies which act in consortia with foreign companies 

when obtaining government contracts and, as a consequence, ‘a cabinet minister ends up 

with a sizeable part of the contract price in his bank account.’ Although Teodoro 

Nguema OBIANG has claimed that this practice was legal, the assertion also suggests 

that he may be receiving bribes or extortion payments in the form of a percentage of 

contract revenue.”89

The memorandum concluded: “The prosecutors suspect that most, if not all, of Teodoro Nguema 

OBIANG’s assets are derived from extortion, bribery or the misappropriation of public funds.”90 

A presentation by ICE in support of the 2007 request for assistance provided additional 

information. It stated that Mr. Obiang “[t]ravels frequently to the United States as an ‘A-1’ 

diplomat, although he is seldom on official business,” and “[r]outinely travels to the United 

States with over $1 million in cash, and fails to declare,” which is a federal crime punishable by 

up to five years in prison.91 The ICE presentation also stated that Mr. Obiang was the “[t]arget 

of multiple [Suspicious Activity Reports] for suspected money laundering from different 

financial institutions,”92 and identified multiple assets and bank accounts associated with 

Mr. Obiang in France, South Africa, and the United States. 

The Subcommittee attempted to confirm the 2007 criminal investigation discussed in the 

DOJ and ICE materials. Neither DOJ nor ICE would confirm the investigation or provide an 

update of its status. To date, no federal criminal indictment or civil asset forfeiture action 

involving Mr. Obiang had been made public.

 In 2008, a complaint was filed in a Spanish court by the Open Society Institute and 

Soros Foundation, alleging money laundering of misappropriated oil revenues by EG officials. 

According to press articles, the complaint alleges that President “Teodoro Obiang has controlled 

close to 16 billion Euros [roughly US $22 billion] worth of oil revenues since he took power in 

1979.”93 The complaint also alleges that President Obiang and his relatives purchased more than 

$26 million in Spanish real estate with suspect funds. According to press reports, this civil 

complaint remains active. 

Together, these investigations and complaints over the past five years have raised 

substantial public concerns about the Obiang family in general and Mr. Obiang in particular, and 

suggest that the funds in their possession should be viewed as suspect. 

                                                           

89 2007 DOJ memorandum at 5-6. See also Financial Times, “Taking a Cut Acceptable, Says African Minister,” 

October 25, 2006, http://www.ft.com/cms/s/0/98cb7e86-645a-11db-ab21-0000779e2340.html?nclick_check=1. 

90 2007 DOJ memorandum at 11. 

91 U.S. Immigration and Customs Enforcement powerpoint presentation, undated but likely in 2007, “Teodoro 

Nguema OBIANG, et al,” slides 9 and 10.

92 Id., at slide 10. 

93 See El Mundo, “Obiang Launders over $26 Million, Buying Real Estate in Spain,” December 9, 2008. 
26 

B. Obiang Use of Attorneys To Bring Suspect Funds 

 Into the United States 

For the four year period, 2004 to 2008, examined in this case history, Mr. Obiang 

employed members of the U.S. legal profession to help him bring millions of dollars in suspect 

funds from Equatorial Guinea into the United States through U.S. bank accounts. Two of the 

attorneys he employed in those efforts were Michael Berger who worked for him for four years, 

and George Nagler who worked for him for two years. Both attorneys were aware of the 

allegations of corruption related to Mr. Obiang, but facilitated his efforts to use shell company, 

attorney-client, law office, and other third party accounts at six U.S. banks as hidden conduits for 

his funds. 

(1) Attorney Michael J. Berger

 Documentation obtained by the Subcommittee shows that, from at least 2004 to 2008, 

Mr. Obiang employed Michael Jay Berger, a California attorney, to carry out a variety of 

personal and business transactions. Among other services, Mr. Berger incorporated two U.S. 

shell companies called Beautiful Vision, Inc. and Unlimited Horizon, Inc. on behalf of 

Mr. Obiang; opened bank accounts in the names of those shell companies; and used those shell 

company accounts, as well as Mr. Berger’s own attorney-client and law office accounts, to bring 

at least $3 million in suspect funds from Equatorial Guinea into the United States and pay 

Mr. Obiang’s bills and expenses. The documents indicate that Mr. Berger actively assisted 

Mr. Obiang in using these third party accounts as conduits for his funds, at times helped conceal 

Mr. Obiang’s activities from the banks administering the accounts, and thereby helped 

Mr. Obiang bypass AML and PEP safeguards designed to detect and analyze high risk 

transactions. Mr. Berger also assisted Mr. Obiang in the purchase of a $30 million California 

residence, as explained later in this section. 

The documents indicate that, while working for Mr. Obiang, Mr. Berger was well aware 

of Mr. Obiang’s political status and suspect wealth. Mr. Berger maintained a collection of press 

articles related to Mr. Obiang, for example, many of which described corruption problems within 

Equatorial Guinea, alleged that the wealth accumulated by Mr. Obiang’s father, the President of 

Equatorial Guinea, originated as the proceeds of corruption, and criticized Mr. Obiang’s lavish 

lifestyle.94 

Mr. Berger received hundreds of thousands of dollars in compensation for his services as 

well as other benefits. Although he provided documents in response to a Subcommittee 

subpoena, Mr. Berger declined to answer Subcommittee questions regarding his dealings with 

Mr. Obiang, asserting his Constitutional rights under the Fifth Amendment. 

                                                           

94 Various periodicals, SEN000535-84; 11/21/06 email from Mr. Berger to Mr. Obiang, SEN004492; 9/15/07 email 

from Mr. Berger to Mr. Obiang, SEN004620; 10/28/07 email from Mr. Berger to Mr. Obiang, SEN004389.
27 

(a) Incorporating Shell Companies and Paying Bills 

 Mr. Berger is a California attorney who, according to his website, specializes in 

bankruptcy law.95 He started his own firm in 1983, and his web site describes his clients as 

ranging from high-profile to working-class.96 His relationship with Mr. Obiang, which dates 

back to at least 2004, involved his providing a variety of services to support Mr. Obiang’s 

interests in the United States. 

Mr. Berger formed two U.S. corporations for Mr. Obiang. The first was Beautiful 

Vision, Inc., a California corporation which was formed on October 12, 2004, and whose 

incorporation papers list Mr. Berger as the company president.97 Although none of the 

incorporation documents mentions Mr. Obiang by name, he was the sole signatory on a Beautiful 

Vision account at Bank of America and, in a later sworn statement in an arbitration case, 

Mr. Obiang described Beautiful Vision as “my company.”98 

One year later, on October 21, 2005, Mr. Berger formed a second California corporation 

for Mr. Obiang called Unlimited Horizon, Inc. Its incorporation papers identify Mr. Berger as 

the agent to accept service of process, but do not identify any officers or directors by name.99 

The incorporation documents do not mention Mr. Obiang. Mr. Berger later identified himself in 

bank account opening documentation as the president of Unlimited Horizon.100 

From 2004 to 2007, Mr. Berger opened multiple bank accounts in the names of Beautiful 

Vision, Inc. and Unlimited Horizon, Inc., and used those accounts to pay bills and expenses 

associated with Mr. Obiang. 

One of the documents reviewed by the Subcommittee illustrates the types of services 

performed by Mr. Berger for Mr. Obiang in connection with these shell corporations. On July 

17, 2006, Mr. Berger entered into a written agreement with Mr. Obiang to perform services 

related to Unlimited Horizon, Inc.101 The contract identified five services to be provided by 

Mr. Berger: (1) paying household bills associated with Mr. Obiang’s residence at 3620 

Sweetwater Mesa Road in Malibu, California; (2) hiring a payroll service company to pay the 

salaries of the employees of Unlimited Horizon, Inc., and compute any taxes owed in connection 

with these salaries; (3) hiring an accountant to perform that tax work; (4) obtaining worker’s 

compensation insurance for Unlimited Horizon, Inc.; and (5) reviewing and paying Mr. Obiang’s 

personal bills upon request.102

                                                           

95 Michael Jay Berger, Esq., http://www.bankruptcypower.com/. 

96 Id. 

97 See incorporation papers for Beautiful Vision, Inc., Wells Box 1, no bates number. See also Coldwell Banker 

agreement signed by Mr. Berger as president of Beautiful Vision, PSI-Coldwell_Banker-01-000501. 

98 January 2007 Declaration of Teodoro Nguema Obiang, Mirzo International, Inc. v. Hyland, Case No. AB06-15 

(Beverly Hills/Greater Los Angles Association of Realtors Arbitration Complaint Case), SEN007574-76 (“On or 

about November 1, 2004, I authorized Mr. Berger, as then President of my company, Beautiful Vision, Inc., to sign 

an Exclusive Retainer Agreement”). 

99 See Unlimited Horizon articles of incorporation, PSI-Union_BK_Calif-01-000007-12, at 12; C0000016; 8/23/05 

Bank of America Investigative File on Unlimited Horizon, Inc. account, BAC-PSI-05948. 100 See, e.g., 8/28/06 account opening documentation for Unlimited Horizon account at Union Bank of California, 

PSI-Union_BK_Calif-01-000007-12. 

101 7/17/06 agreement between Mr. Berger and Mr. Obiang, SEN000001-5. 102 Id. 
28 

Other documents show that Mr. Berger’s tasks included such matters as screening, hiring, 

and facilitating the payroll of the domestic staff at the $30 million Malibu residence Mr. Obiang 

had purchased, including private security guards, butlers, chefs, drivers, and other caretakers.103 

One bill showed, for example, that over the course of seven months in 2007, Mr. Berger paid 

over $330,000 for two bodyguards available 24 hours per day at $38 per hour, and over $7,400 

for “The Fish Physician” to provide services related to Mr. Obiang’s fish tank and Koi pond.104 

These funds were disbursed from an Unlimited Horizon account at Union Bank of California.105 

Mr. Berger also assisted Mr. Obiang in his 2006 purchase of the $30 million Malibu 

property, as detailed later in this section. An October 2006 email from Mr. Berger to Mr. Obiang 

shows that he also helped negotiate contracts with third parties regarding that property. In the 

message, Mr. Berger describes meeting with an interior decorator to discuss a $4 million budget 

for decorating Mr. Obiang’s Malibu residence: 

“I met for 2 hours today with your designer .... I convinced them to accept 25% 

commission on all items, not the 30% in their draft contract. ... The job has an 

approximate budget of $4,000,000.00. 5% of $4,000,000.00 is $200,000.00. I feel good 

about saving you money .... I enjoy working for you.”106 

(b) Bringing In and Moving Suspect Funds 

From at least 2004 to 2008, Mr. Obiang utilized a variety of U.S. bank accounts and wire 

transfer systems to bring millions of dollars in suspect funds from Equatorial Guinea into the 

United States to support his U.S. activities. Documents reviewed by the Subcommittee show 

that Mr. Berger helped Mr. Obiang conceal his U.S. financial activities, primarily by opening 

and using shell company accounts and his own attorney-client and law office accounts at U.S. 

banks as conduits for Obiang funds. Mr. Berger does not appear to have taken any steps to 

ensure that the funds he helped bring into the United States were legitimate. 

From 2004 to 2007, Mr. Obiang used accounts at three U.S. banks, Union Bank of 

California, Bank of America, and Citibank, often with Mr. Berger’s assistance, to deposit, 

transfer, and spend nearly $10 million. Most of these funds were wire transferred from accounts 

in Equatorial Guinea held in the name of Mr. Obiang or two EG companies he controlled, 

Somagui Forestal and Socage. The EG wire transfers often deposited funds into attorney-client 

or law office accounts controlled by Mr. Berger, who then transferred the funds to other Obiangrelated accounts. This two-step process helped mask the fact that the other accounts were 

receiving funds from Equatorial Guinea, which most banks flag as a high risk country due to its 

weak AML controls and reputation for corruption. Mr. Berger also used the EG funds to pay 

Obiang-related bills and expenses. Over time, as the three banks discovered the EG wire 

transfers or Mr. Obiang’s use of their accounts, they closed the accounts he was using. The two 

banks with a Berger attorney-client or law office account also terminated their relationships with 

him, due to the incoming EG wires and Mr. Obiang’s surreptitious use of the accounts. Each 

                                                           

103 1/10/08 Fax from Mr. Berger to Mr. Obiang, SEN000008. 104 Various dates, checks from Unlimited Horizon, Inc. General Account at Union Bank of California, PSIUnion_Bk_Calif-01-000048-397 (Sealed Exhibit). See also 10/10/06 Invoice from Saurman Investigative Services, 

Inc. and 10/28/06 check from Unlimited Horizon, Inc., SEN000874. 

105 Id. 106 10/18/06 email from Mr. Berger to Mr. Obiang, SEN003438. 
29 

time an account was closed, however, Mr. Obiang responded by finding another U.S. bank 

account, often with Mr. Berger’s assistance, that he could utilize. 

Mr. Berger’s matter-of-fact reaction to the account closings is instructive. On June 12, 

2007, Union Bank of California closed Unlimited Horizon, Inc. General Account No. 

0720115409, less than a year after it was opened, due to suspicious transactions.107 Following 

the account closure, Mr. Berger wrote an email to Mr. Obiang explaining the status of the 

account, steps he was taking to avoid any complications from the closure, and alternative funding 

channels that could be used, including an Unlimited Horizon account at Citibank, a Berger 

attorney-client account at Bank of America, and perhaps a new account at another bank. 

“Attached hereto is a copy of the check register of the general account at Union Bank 

from June 1, 2007 through June 12, 2007, the date it was closed by the bank. There is 

currently a zero balance in said account. Checks that were written but did not clear 

before the account was closed are listed. ... Most of these checks have already been 

replaced with new checks from the Citibank account. I have not yet heard from DMV 

with respect to replacement of 2 registration checks that did not clear: checks for your 

2005 Lamborghini and your 2005 Mercedes. I will replace these checks as soon as I 

receive a bill from DMV, as I did for your 2005 Porche. 

Also attached hereto is a copy of the Check register for the general account at Citibank 

from its opening on 6/25/07 through today, 7/11/07. The remaining balance in this 

account is $19,664.96. I am saving this money for the next payroll which will take place 

on Friday, July 13. 

Also attached hereto is an account of the funds that were deposited by me into my Bank 

of America Client Trust Account on your behalf, and the checks I wrote on your behalf. 

You have $9,727.55 remaining in my Bank of America Client Trust Account. Per our 

discussion, I will use these funds to open up another bank account at another bank or, if 

needed, deposit these funds into the existing Citibank account. 

... I have prepared and attached an invoice to you requesting a wire transfer of 

$200,000.00 to my Bank of America Client Trust Account. I will need these funds to 

pay additional bills for you. A copy of my Bank of America Client Trust Account Wire 

Transfer Information is attached hereto. 

As always, I appreciate the opportunity to work for you.”108

As this email and other documents demonstrate, Mr. Berger actively assisted Mr. Obiang in 

bypassing U.S. AML and PEP safeguards intended to keep foreign corruption out of the United 

States. 

                                                           

107 7/11/07 email from Mr. Berger to Mr. Obiang, SEN004574. See also 8/28/06 Bank-Depositor Agreement of 

Union Bank of California and Unlimited Horizon, Inc., PSI-Union_BK_Calif-01-000007-12. 

108 7/11/07 email from Mr. Berger to Mr. Obiang, SEN004574. 
30 

(i) Union Bank of California 

For more than four years, from 2004 to 2008, Mr. Obiang used accounts at Union Bank 

of California (UBOC) to bring suspect funds into the United States to support his activities. 

Using multiple shell company, law office, and other third party accounts, none of which were 

opened in his own name, Mr. Obiang was able to wire transfer nearly $8 million in suspect funds 

into UBOC accounts. Mr. Berger was instrumental in opening the shell company and law office 

accounts, moving Obiang funds through them, and masking Mr. Obiang’s financial activities 

from the bank. 

From 2001 to 2004, Mr. Obiang sent multiple wire transfers from Equatorial Guinea, 

including one for over $6.2 million, to UBOC accounts, including one opened in the name of an 

individual employed by Mr. Obiang and another opened by an Obiang-related shell company, 

Sweet Pink, Inc. After detecting these EG wire transfers in 2004, the bank closed both accounts 

in 2005. In 2006, Mr. Berger opened two accounts for another Obiang shell company, Unlimited 

Horizon, as well as a law office account at UBOC, without disclosing that Mr. Obiang would be 

using them. Over a ten-month period from 2006 to 2007, EG wire transfers totaling more than 

$1.7 million were deposited into the new Berger law office account. Over that same time period, 

Mr. Berger transferred those funds to the two Unlimited Horizon accounts which he then used to 

pay Mr. Obiang’s bills and expenses. 

While the $1.7 million in EG wire transfers triggered internal UBOC AML alerts, UBOC 

did not review the transactions for about six months, because it was negotiating a deferred 

prosecution agreement with the U.S. Justice Department over deficiencies in UBOC’s AML 

program. In June 2007, UBOC finally reviewed the transactions. Bank personnel concluded that 

the EG wire transfers were suspicious, raising both fraud and AML concerns, and UBOC 

immediately closed all three accounts. 

 

But Mr. Obiang still wasn’t done making surreptitious use of UBOC accounts. UBOC 

later discovered that, in 2008, Mr. Obiang wire transferred nearly $30,000 to a UBOC account 

held by the mother of a woman he was dating, and then withdrew the funds via cash withdrawals 

at ATM machines and casinos in the United States. 

 Wire Transfers and Kulungian Account. UBOC told the Subcommittee that it first 

became aware of Obiang-related account activity in 2004, after UBOC deemed Equatorial 

Guinea to be a high-risk country and conducted a search for EG wire transfers.109 The search 

identified one large 2001 wire transfer of $6.2 million and seven smaller wire transfers from 

2003 to 2004, totaling about $18,700, that had been sent from an Obiang account at Riggs Bank, 

Account No. 76923450, to accounts at UBOC. The $6.2 million wire transfer had been sent to a 

UBOC account for Beverly Hills Escrow in connection with Mr. Obiang’s purchase of a 

                                                           

109 Subcommittee interview of Union Bank officials, February 25, 2009; 10/21/04 UBOC Case Report, PSIUnion_Bank_of_California-04-0449-52 (providing results of search related to “Equatorial Guinea Government and 

related officials/family members scrub”). According to UBOC employees, each year UBOC ranked various 

countries by risk, using recommendations and reports of the Financial Action Task Force (FATF), the U.S. State 

Department, Transparency International, and other sources. UBOC assigned each country a risk rating of high, 

medium, or low. UBC’s monitoring software then screened wire transfers and other transactions on a monthly basis 

to identify high risk activity for further review. 
31 

residence near Los Angles as explained below.110 The remaining wire transfers had been sent to 

UBOC Account No. 1301073100, held in the name of Carla Kulungian.111 Still another wire 

transfer for more than $14,700 had been sent from an Obiang company, Somagui Forestal, to the 

Kulungian account.112 UBOC told the Subcommittee that it was able to determine that Ms. 

Kulungian worked as a secretary for Mr. Obiang, and had accepted the wire transfers into her 

account pursuant to her employment.113 On November 19, 2004, UBOC closed the Kulungian 

account.114 

 Sweet Pink Account. Nearly a year later, on September 29, 2005, a UBOC checking 

account, Account No. 1300052831, was opened in the name of Sweet Pink, Inc.115 Sweet Pink, 

Inc. is a California shell corporation, formed in 2005, by another attorney who worked for 

Mr. Obiang, George Nagler, as described later in this section. During October 2005, two wire 

transfers, each for nearly $30,000, were deposited into the account by Somagui Forestal, 

Mr. Obiang’s EG company.116 The bank learned of the EG wire transfers and closed the Sweet 

Pink account on October 27, 2005, less than a month after it had been opened.117

 Unlimited Horizon and Law Office Accounts. Undeterred by the closing of the two 

accounts, a year later Mr. Obiang struck again, this time using Mr. Berger to open the accounts. 

In August 2006, Mr. Berger opened two accounts at UBOC for Unlimited Horizon, Inc., without 

mentioning Mr. Obiang’s connection to the company. Mr. Berger initially funded the accounts 

with Obiang funds held in his attorney-client account at Bank of America.118 Two months later, 

Mr. Berger opened a law office account at UBOC, and immediately began accepting EG wire 

transfers into that account. Over a ten-month period from 2006 to 2007, EG wire transfers 

deposited more than $1.7 million into the UBOC Berger law office account. During that same 

period, Mr. Berger transferred the funds via check to the two Unlimited Horizon accounts and 

then used those accounts to pay Mr. Obiang’s bills and expenses. By allowing his law office 

account to function as a pass-through for the EG funds, Mr. Berger helped Mr. Obiang 

circumvent UBOC’s AML and PEP controls and bring suspect funds into the United States. 

Mr. Berger opened the two Unlimited Horizon accounts at Union Bank of California on 

August 28, 2006, Accounts No. 0720115409 and No. 0720115417.119 The account opening 

                                                           

110 10/21/04 UBOC Case Report, PSI-Union_Bank_of_California-04-0450, 0452. 111 Id., at 0450. See also Subcommittee interview of Union Bank officials, February 25, 2009. 112 10/21/04 UBOC Case Report, PSI-Union_Bank_of_California-04-0450. 113 Subcommittee interview of Union Bank officials, February 25, 2009. 114 10/21/04 UBOC Case Report, PSI-Union_Bank_of_California-04-0177; Subcommittee interview of Union Bank 

officials, February 25, 2009. 

115 UBOC Case Report on Sweet Pink, Inc. Wire Review, PSI-Union_Bank_of_California-04-0191. 116 Id. 117 Id. 118 8/28/06 check from the Law Offices of Michael Jay Berger Attorney-Client Trust Account to Unlimited 

Horizon, Inc., PSI-Union_Bank_of_California-01-000026. 

119 8/28/06 Bank-Depositor Agreement of Union Bank of California and Unlimited Horizon, Inc., PSIUnion_Bank_of_California-01-000007-11. The first account was designated a “general” account for Unlimited 

Horizon, Inc., while the second was designated a “special” account for Unlimited Horizon. 
32 

documentation shows that Mr. Berger listed himself as the sole signatory for both accounts.120 

The documentation makes no mention of Mr. Obiang. 

 An August 28, 2006 email shows that Mr. Berger and Mr. Obiang explicitly agreed from 

the beginning to channel Obiang funds through the two Unlimited Horizon accounts. The email 

also makes it clear that both men knew Mr. Berger was using his attorney-client account to 

transact business and execute funding transfers for Mr. Obiang. Mr. Berger wrote: 

“Dear Mr. Nguema: 

Attached hereto is proof of my opening two business checking accounts for Unlimited 

Horizon, Inc. at Union Bank today and wire transfer information for these two accounts. 

From the funds that I am holding for you in my client trust account, I deposited 

$20,000.00 into the general account for Unlimited Horizon, Inc. and $10,000.00 into the 

special account for Unlimited Horizon, Inc.”121

Two months later, on October 15, 2006, Mr. Berger sent Mr. Obiang the following email: 

“As of today, I have spent or transferred to the Unlimited Horizon Accounts all of the 

funds that you wired to my client trust account. ... Unlike my client trust account [at 

Bank of America] which is used for many clients, the 2 Unlimited Horizon Accounts are 

used exclusively for your business. ... [T]he need for the transfer of additional funds is 

clear. ... By separate email and fax, I am sending you a request for a wire transfer of 

$200,000.00.”122

The following day, October 16, 2006, Mr. Berger opened a third account at UBOC, the 

Michael Jay Berger DBA Law Office of Michael Jay Berger, Account No. 0720115581.123 He 

was the only authorized signatory on the account.124 He immediately began using his law office 

account as a pass-through for EG wire transfers, accepting large wire transfers from Somagui 

Forestal and Obiang accounts in Equatorial Guinea and forwarding the funds via check to the 

Unlimited Horizon general account at UBOC. 

Two weeks after opening the new account, for example, on November 1, 2006, 

Mr. Berger sent Mr. Obiang an email asking him to wire $200,000 to Mr. Berger’s new law 

office account at UBOC and explaining that he would then transfer the funds to the Unlimited 

Horizon account and, in turn, pay Mr. Obiang’s bills and expenses. 

“Dear Mr. Nguema: 

Our July, 2006 agreement requires me to send you an e-mail ‘whenever the balance in the 

checking account of Unlimited Horizon, Inc. falls below $50,000.00.’ The balances as of 

today in the two Unlimited Horizon, Inc. accounts are as follows (after the clearing of all 

checks that have been written and sent out): 

                                                           

120 Id. 121 8/28/06 email from Mr. Berger to Mr. Obiang, SEN004449. 122 10/15/06 email from Mr. Berger to Mr. Obiang, SEN004465. 123 10/16/06 Bank of California Bank-Depositor Agreement, PSI-Union_BK_Calif-01-000629-630. 124 Id. 
33 

General Account $53,354.51 

Special Account $ 336.46 

Per our in person discussion on October 29, 2006, I suggest that the wire transfer be sent 

to my new client trust account at Union Bank. I will transfer it from there to the 

Unlimited Horizon, Inc. General Account. I will send you a separate e-mail and fax 

requesting a $200,000 wire transfer and providing wire transfer information for this new 

account.”125

On November 24, 2006, Somagui Forestal wired nearly $200,000 to Mr. Berger’s new law office 

account.126 

From November 24, 2006 through June 6, 2007, eight EG wire transfers from Somagui 

Forestal or Mr. Obiang, totaling over $1.7 million, were deposited into the new Berger law office 

account at UBOC.127 Bank records indicate that soon after receiving each wire transfer, 

Mr. Berger transferred the funds received by writing a check to Unlimited Horizon Account No. 

0720115409.128 The funds deposited into the Unlimited Horizon account were then used to pay 

Mr. Obiang’s bills, including household expenses, parking tickets, car repairs, clothing, home 

furnishings, and electronics.129 

In addition, from October 2006 to March 2007, on a monthly basis, Mr. Berger wrote 

himself a $5,000 self-endorsed check from the Unlimited Horizon account, presumably as 

compensation for his services.130 

The $1.7 million in EG wire transfers sent to the Berger law office account did not go 

unnoticed; they triggered several internal UBOC anti-money laundering (AML) alerts.131 The 

bank’s review of these alerts was delayed, however, due to a deferred prosecution agreement that 

it was then negotiating with the U.S. Department of Justice arising from deficiencies in UBOC’s 

AML program.132 As part of the deferred prosecution agreement, UBOC was required to 

complete a number of pending compliance matters that delayed its review of the 2006 and 2007 

EG wire transfers.133 

On or about June 11, 2007, Union Bank of California initiated an internal review of the 

EG wire transfers into the Berger law office account extending back to November 2006, and that 

                                                           

125 11/1/06 email from Mr. Berger to Mr. Obiang, SEN004477. Although the account is held in the name of 

Mr. Berger’s law office, he refers to the account in this email as his “new client trust account.” 126 11/24/06 wire transfer from Somagui Forestal, PSI-Union_Bk_Calif-01-000642. 127 Wire transfers from Somagui Forestal, PSI-Union_BK_Calif-01-000642-647, 649-650. 128 UBOC account statements, PSI-Union_BK_Calif-01-000631-641; UBOC wire transfer records, PSIUnion_BK_Calif-01-000652, 000657, 000660, 000667, 000678, 000686, 000697, 000718. 

129 Various dates, checks from Unlimited Horizon, Inc. to a variety of service vendors, PSI-Union_Bk_Calif-01-

000048-397 (Sealed Exhibit). 

130 Various dates, checks from Unlimited Horizon, Inc. to Mr. Berger, PSI-Union_Bk_Calif-01-000391, 000331, 

000274, 000239, 000182, 000140. 

131 Union Bank of California wire monitoring software screens every field of wire transfer data for certain names, 

countries, and dollar amounts. Subcommittee interview of Union Bank officials, February 25, 2009. 

132 Id. 133 Id. 
34 

account’s subsequent transfers to the Unlimited Horizon accounts.134 Bank personnel concluded 

that the EG wire transfers were suspicious, raising both fraud and AML concerns. The 

investigative report of the UBOC Financial Intelligence Unit stated the following: 

“The investigation found the use of multiple corporate vehicles by Michael Berger, the 

lawyer of a Politically Exposed Person (PEP), to disguise the identity of the PEP as well 

as layer and integrate funds derived via international wire transactions from a high risk 

jurisdiction [Equatorial Guinea], which had the appearance of money laundering activity. 

... Several problematic areas were detected in the client’s business account activity. ... 

[S]pecifically, the client (1) received multiple wire transactions from Teodoro Nguema 

Obiang and his company in Equatorial Guinea (EG), Somagui Forestal, (2) processed 3rd

party checks payable to Teodoro Nguema Obiang through his IOLTA [law office] 

account in order to conceal the identity of the listed payee, and (3) operated a California 

LLC, Sweetwater Malibu LLC, in order to layer and integrate funds which originated in a 

high-risk jurisdiction. The ultimate benefactor of the transactions was Teodoro Nguema 

Obiang with the funds being utilized to pay for his estate and living expenses in the 

United States. ... 

The aggregate total of all suspicious credits to the client’s IOLTA account was 

$1,752,520. ... [T]he total debits from the client’s IOLTA account which were deemed 

suspicious in nature totaled $1,551,855.00. ... [T]he total of [all debits paid from 

Ultimate [sic] Horizon accounts deemed suspicious] was $1,656,359.00. ... [T]he 

aggregate total of all suspicious activity detected during this investigation was 

$4,960,734.00. 

This suspicious activity consisted of the use of multiple corporate vehicles by Michael 

Berger, the lawyer of Politically Exposed Person (PEP) Teodoro Nguema Obiang, in 

order to disguise the identity of his client as well as to place, layer, and integrate 

Obiang’s funds derived via international wire transactions from Equatorial Guinea, a high 

risk jurisdiction. Therefore, the detailed actions had the appearance of money laundering 

activity conducted by a UBOC client on behalf of Obiang.”135

On June 12, 2007, UBOC closed the Berger law office account.136 The bank gave 

Mr. Berger a cashiers check with the remaining funds, which Mr. Berger deposited into his 

attorney-client account at Bank of America.137 UBOC also sent a letter to Unlimited Horizon, 

addressed to Mr. Berger, stating that “we do not believe it is in the best interest to continue your 

relationship with Union Bank.”138 On June 12, 2007, UBOC issued a second cashiers check in 

the amount of $250,014.65 to Unlimited Horizon.139 

Johnson Account. Even after the closure of the Unlimited Horizon and Berger accounts, 

Mr. Obiang did not cease his efforts to make use of UBOC accounts. In 2009, UBOC discovered 

                                                           

134 6/15/07 UBOC Case Notes on Berger-Wire Review, PSI-Union_Bank_of_California-04-0272. 135 6/15/07 UBOC Case Summary on the Berger Wire Review, PSI-Union_Bank_of_California-04-0269. 136 6/12/07 letter from Union Bank of California to Mr. Berger, SEN000998. See also 6/15/07 UBOC Case Notes 

on Berger-Wire Review, PSI-Union_Bank_of_California-04-0272. 

137 Subcommittee staff interview of UBC officials, February 25, 2009. 138 6/12/07 letter from UBOC to Unlimited Horizon, Inc. and Mr. Berger, SEN007797. 

139 6/12/07 cashier’s check from UBOC to Unlimited Horizon, Inc., SEN004570. 
35 

that, on March 28, 2008, Mr. Obiang sent a wire transfer from Equatorial Guinea for nearly 

$30,000 to a UBOC account belonging to Rayshonda Johnson for her daughter Roxanna 

Galbran.140 It is unclear why the bank did not detect and ask questions about the EG wire 

transfer at the time, given the prior problems with Mr. Obiang. According to a 2009 internal 

UBOC investigation, Ms. Johnson explained that her daughter was engaged to an African prince, 

Mr. Obiang, and that the funds were to be used for her daughter’s housing expenses. UBOC told 

the Subcommittee that it had learned the daughter had already lost her home, possibly to 

foreclosure, and that the funds appeared to have been withdrawn via large cash withdrawals at 

ATM machines and casinos in the United States.141 The bank told the Subcommittee that it had 

concluded Mr. Obiang had once again used a UBOC customer to receive funds in the United 

States on his behalf, continuing a multi-year pattern of activity to circumvent UBOC’s attempts 

to restrict his financial activity at the bank. 

 (ii) Bank of America

 From 2004 to 2007, Mr. Obiang was also able, with the assistance of Mr. Berger, to 

deposit over $9.7 million, including over $2 million in wire transfers from Equatorial Guinea and 

over $4 million from the sale of property in Los Angeles, into accounts at Bank of America, 

none of which were opened in Mr. Obiang’s name. The EG wire transfers generally went to an 

attorney-client account that Mr. Berger had long maintained at the bank. Mr. Berger then 

transferred some of these funds into two Bank of America accounts opened for an Obiang shell 

company, Beautiful Vision, Inc. Mr. Berger and Mr. Obiang then used the Beautiful Vision 

accounts to pay Obiang-related bills and expenses, until Bank of America closed them in 2005. 

After that, Mr. Berger used the EG funds in his attorney-client account to either pay Obiangrelated bills directly or transfer funds to the Unlimited Horizon accounts at Union Bank of 

California or Citibank. By using his attorney-client account as a conduit for the EG funds, 

Mr. Berger helped disguise the real source of funding for the Beautiful Vision and Unlimited 

Horizon accounts and enabled Mr. Obiang to utilize those accounts for a substantial period of 

time. In 2007, after the bank conducted an internal investigation into whether Mr. Obiang was 

secretly utilizing the Berger attorney-client account, Bank of America closed the account, 

terminated its relationship with Mr. Berger, and told the Subcommittee that it had taken steps to 

prevent such tactics in the future. 

Beautiful Vision Accounts. From 2004 to 2005, Mr. Berger opened several Bank of 

America accounts in the name of Beautiful Vision, Inc. Those accounts were used to pay 

millions of dollars in Obiang-related bills as well as supply Mr. Obiang with two cashiers checks 

totaling in excess of $3.4 million.

On October 19, 2004, one week after Mr. Berger incorporated Beautiful Vision, Inc., he 

opened two Bank of America accounts in the name of the company, listing himself in the bank 

records as the company’s owner and president.142 Beautiful Vision Account No. 02137-06466 

was set up as a business checking account,143 while Beautiful Vision Account No. 02139-06465 

                                                           

140 Subcommittee interview of Union Bank officials, February 25, 2009. 141 Id. 142 8/23/05, Bank of America, Master Case Information, BAC-PSI-05948. 143 Bank of America, Master Agreement: Business Deposit Accounts, BAC-PSI-03036-39.
36 

was designated a “special” checking account.144 Mr. Berger was designated the sole signatory 

for the business checking account,145 while the sole signatory for the special checking account 

was Mr. Obiang.146 Mr. Berger also set up accounts to purchase two CDs in the name of 

Beautiful Vision, CD Nos. 02135-00057 and 02132-00049.147 Although Mr. Obiang was the 

sole signatory on one of the accounts, Bank of America did not perform any due diligence 

related to him during the account opening process and did not learn of his PEP status.

About two weeks after the accounts were established, on November 1, 2004, Mr. Berger 

wrote three checks providing $3.1 million in initial funding to the accounts. All three checks 

were drawn on his Bank of America attorney-client account, and used Obiang-related funds sent 

from Equatorial Guinea. One check deposited $500,000 into the Beautiful Vision business 

checking account;148 a second deposited $1 million into the Beautiful Vision special checking 

account;149 and a third provided $1.6 million to purchase the two CDs.150 Three weeks later, on 

November 19, 2004, the Beautiful Vision special checking account received a wire transfer for 

another $4 million from D&G Escrow Corporation, the escrow agent that handled the September 

2004 sale of a Los Angeles residence owned by Mr. Obiang, as explained further below.151 Over 

the next year, Mr. Berger made additional deposits totaling about $2.5 million.152 This chart 

shows the primary deposits into the Beautiful Vision accounts. 

Major Deposits Into Beautiful Vision Accounts

Date “To:” Amount Bates

11/1/04 Beautiful Vision, Inc. 02139‐06465 (check from Berger attorney‐client account) $  1,000,000.00 BAC‐PSI‐02398

11/1/04 Beautiful Vision, Inc. 02137‐06466 (check from Berger attorney‐client account) $     500,000.00 BAC‐PSI‐02399

11/1/04 Beautiful Vision, Inc. 02135‐00057 (CD) & 02132‐00049 (CD)

(check from Berger attorney‐client account)

$  1,600,000.00 BAC‐PSI‐02400

11/12/04 Beautiful Vision, Inc. 02139‐06465 $     500,000.00 BAC‐PSI‐02473

11/19/04 Beautiful Vision, Inc. 02139‐06465 (wire transfer from D&G Escrow) $  4,054,408.33 BAC‐PSI‐02474

12/2/04 Beautiful Vision, Inc. 02139‐06465 $     500,000.00 BAC‐PSI‐02479

3/4/05 Beautiful Vision, Inc. 02139‐0646 $     605,288.43 BAC‐PSI‐02492

7/29/05 Beautiful Vision, Inc. 02139‐06465 (check from Berger attorney‐client account

after City National Bank closed Obiang account)

$     669,691.02 BAC‐PSI‐02401

8/8/05 Beautiful Vision, Inc. 02139‐06465 (wire transfer from Teodoro Obiang) $     299,933.50 BAC‐PSI‐02510

Source:  Bank of America                        Total:  $  9,729,321.28  

  Prepared by Subcommittee

                                                           

144 Id. 145 Id. 146 8/23/05 Bank of America, Master Case Information, BAC-PSI-05948. 147 Id. 148 BAC-PSI-03067-68. 

149 BAC-PSI-02398. 150 BAC-PSI-02400. 151 November 2004 statement for Beautiful Vision special checking account, BAC-PSI-02474. Less than two weeks 

later, a wire transfer for $3.5 million was sent from the Beautiful Vision account to an account for Mr. Obiang, but 

that wire transfer was reversed on 12/10/04, and the funds were returned to the account. Id., at BAC-PSI-02474 and 

02479.

152 See 2004-2005 account statements for Beautiful Vision special checking account, BAC-PSI-02470-515. 
37 

 The two Beautiful Vision checking accounts were used to pay bills and expenses associated with 

Mr. Obiang. The business checking account, for example, issued multiple checks, signed by 

Mr. Berger, which together totaled about $532,000. While most were for amounts of less than 

$10,000, one large check for $266,944.45 paid for purchases at a high-end retail store. The 

special checking account also issued multiple checks, all of which were signed by Mr. Obiang 

and together exceeded $7.6 million.153 The following chart lists the Beautiful Vision checks in 

excess of $50,000 that were funded from the Beautiful Vision special checking account for 

which Mr. Obiang was the sole signatory. 

Beautiful Vision Checks in Excess of $50,000

Date       Check Amount       “Pay to the Order of” “For” Bates

11/1/04 $       82,900.00 Naurelle Furniture BAC‐PSI‐02564

11/1/04 $     137,312.71 Ferrari of Beverly Hills Maserati BVH BAC‐PSI‐02565

11/5/04 $       63,326.25 Soofer Gallery Carpet BAC‐PSI‐02571

11/5/04 $     332,243.21 Ferrari of Beverly Hills Ferrari BAC‐PSI‐02566

11/8/04 $       66,893.11 Summit (Illigible) BAC‐PSI‐02568

11/12/04 $       80,287.95 Gucci    BAC‐PSI‐02572

11/13/04 $       51,288.00 Dolce & Gabbana    BAC‐PSI‐02563

11/13/04 $       21,976.56 Fields Pianos Piano BAC‐PSI‐02575

11/16/04 $       50,000.00 Ferrari of Beverly Hills Deposit 6/2 Order BAC‐PSI‐02574

11/13/04 $       59,850.00 Soofer Gallery Rugs BAC‐PSI‐02573

11/22/04 $     280,409.00 Auto Star Signature Ferrari (Illegible) BAC‐PSI‐02567

11/26/04 $       50,000.00 Lamborghini Beverly

Hills

BAC‐PSI‐02570

11/26/04 $     288,523.29 Lamborghini Beverly

Hills

BAC‐PSI‐02569

11/26/04 $     181,265.32 GlobalJet Corp.    BAC‐PSI‐02578

1/5/05 $     393,192.90 GlobalJet Corp.    BAC‐PSI‐02580

1/6/05 $       55,193.00 Dolce & Gabbana    BAC‐PSI‐02579

3/4/05 $  3,300,000.00 Cash    BAC‐PSI‐02585

3/4/05 $     285,567.33 GlobalJet Corp.    BAC‐PSI‐02586

3/5/05 $       58,500.00 L.A. Audio Video, Inc. Installation of Bang

&Olufsen

Home Theatre

BAC‐PSI‐02587

3/5/05 $     118,244.66 ADT Security Services Teodoro Nguema

Obiang

BAC‐PSI‐02591

7/30/05 $     330,173.96 O’Gara Coach Company,

LLC

Pay off 2005

Lamborghini

Roadster

BAC‐PSI‐02591

8/6/05 $     102,053.29 ADT Security Services Teodoro Nguema

Obiang

BAC‐PSI‐02592

8/15/05 $     100,000.00 Beautiful Vision General Acct. Payroll BAC‐PSI‐02593

9/16/05 $       79,522.54 Cash    BAC‐PSI‐02595

                    Total ‐ $ 6,968,723.08 Source‐Bank of America  

     Prepared by Subcommittee  

The largest Beautiful Vision check, dated March 4, 2005, and signed by Mr. Obiang, was 

made out to “cash” in the amount of $3.3 million. Mr. Obiang used it to purchase a Bank of 

America cashiers check on the same day in the same amount, made payable to himself.154 A 

                                                           

153 See 2004-2005 account statements for Beautiful Vision special checking account, BAC-PSI-02470-515. 154 See copy of 3/4/05 check and 3/4/05 cashier’s check from Bank of America, BAC-PSI-06020. 
38 

little over a week later, on March 15, 2005, the cashiers check was cashed at CCEI Bank in 

Equatorial Guinea.155 Despite the large amount of money and high risk jurisdiction involved in 

this transaction, it did not trigger a review by Bank of America or direct the bank’s attention to 

Mr. Obiang. 

Bank of America closed the first Beautiful Vision business checking account, Account 

No. 02137-06466, on or about August 10, 2005,156 and a week later, on August 18, 2005, 

replaced it with a new checking account, Beautiful Vision Account No. 02139-41114.157 This 

new account was initially funded with a $100,000 check, signed by Mr. Obiang, drawn on the 

Beautiful Vision special checking account.158 A month later, a $50,000 check, again signed by 

Mr. Obiang and drawn on the Beautiful Vision special checking account, was also deposited into 

the new Beautiful Vision account.159 The account then paid bills related primarily to activities at 

the Grand Wailea Resort in Hawaii, the Venetian Hotel in Las Vegas, and the L’ermitage Hotel 

in Beverly Hills, on dates that corresponded to travel by Mr. Obiang to those cities.160 In 

addition, two large wire transfers from the account, listing Mr. Berger as the originator, sent 

$70,000 to the Grand Wailea Resort on August 24, 2005, and $37,093.55 to the same resort on 

September 12, 2005.161 

This activity triggered a review of the new account.162 During the review, Bank of 

America immediately discovered Mr. Obiang’s role and immediately closed the account on 

September 12, 2005, a month after it was opened. The review also led to Bank of America’s 

discovering that Mr. Obiang was using the second Beautiful Vision account, and the bank closed 

that account as well, two months later in November 2005.163 Bank of America told the 

Subcommittee that it closed both accounts due to Mr. Obiang’s involvement with Beautiful 

Vision, Inc.164 The bank did not, however, take any action regarding Mr. Berger’s accounts, 

even though he was the president of Beautiful Vision, had opened both accounts, and had hidden 

from the bank that Mr. Obiang was the beneficial owner of the company. 

Berger Attorney-Client Account. After Bank of America closed the Beautiful Vision 

accounts in 2005, Mr. Obiang did not withdraw from the bank. Instead, he made greater use of 

                                                           

155 See copy of 3/4/05 cashier’s check, BAC-PSI-07630. 156 10/29/04 account statement from Bank of America, BAC-PSI-03040; 08/10/05 account statement from Bank of 

America, BAC-PSI-03065. 

157 8/31/05 account statement from Bank of America, BAC-PSI-02516; 9/16/05 account statement from Bank of 

America, BAC-PSI-02520. The funds in the closed account were transferred to other Beautiful Vision accounts and 

used to pay Obiang-related bills and expenses. Subcommittee interview of Bank of America officials, December 18, 

2009. 

158 8/18/05 Bank of America deposit ticket and 8/15/05 check to Beautiful Vision, Inc. signed by Mr. Obiang, BACPSI-02596-97. 

159 9/12/05 Bank of America deposit ticket and 9/9/05 check signed to Beautiful Vision, Inc. signed by Mr. Obiang, 

BAC-PSI-02598-99. 

160 8/31/05 account statement from Bank of America, BAC-PSI-02516. 9/16/05 account statement from Bank of 

America, BAC-PSI-02520. 

161 Id., at BAC-PSI-02520. 162 Subcommittee interview of Bank of America officials, December 18, 2009. 163 Subcommittee interview of Bank of America officials, March 25, 2009 and December 18, 2009. 164 Subcommittee interview of Bank of America officials, April 22, 2009. 
39 

Mr. Berger’s attorney-client account to continue to bring suspect funds into the United States 

through Bank of America. 

Mr. Berger first opened his attorney-client account at Bank of America in 1996, under the 

name of Law Offices of Michael Jay Berger Attorney-Client Trust Account No. 16646-09603.165 

Mr. Berger first began accepting wire transfers from Mr. Obiang in 2004, when he began 

working for him, and continued to accept them, including wire transfers from Equatorial Guinea, 

until his account was closed by the bank in 2007. Altogether over three years, the Berger 

attorney-client account accepted and disbursed over $4.8 million to pay Obiang-related bills or 

forward funds to other Obiang-related accounts. By using his attorney-client account as a 

conduit for Obiang funds, Mr. Berger helped Mr. Obiang conceal his activities at Bank of 

America and circumvent the bank’s AML and PEP controls. 

For example, on June 24, 2005, City National Bank sent two checks to the Berger 

attorney-client account at Bank of America in the amounts of $500,000 and $199,691.02, for a 

total of $699,691.02.166 These funds came from an Obiang account that had been closed by the 

bank. Mr. Obiang had earlier told the bank that the source for these funds was one of his 

companies in Equatorial Guinea.167 Mr. Berger deposited both checks in his attorney-client 

account.168 

On July 28, 2006, Mr. Berger sent Mr. Obiang instructions for wiring funds to his 

attorney-client account.169 A week after those instructions were sent, on August 4, 2006, 

Mr. Obiang’s EG company, Socage, wire transferred nearly $300,000 to the Berger attorneyclient account.170 It was the first of six large EG wires from Socage or Somagui Forestal, 

totaling nearly $1.3 million, sent to the account between August 2006 and September 2007.171 

Each time these EG funds were deposited into the account, Mr. Berger responded by using the 

money to pay Obiang-related bills or forwarding the funds to other Obiang-related accounts.172 

On October 20, 2006, for example, the Berger attorney-client account received a wire 

transfer for $199,931.17 from Socage.173 Three days later, on October 23, 2006, Mr. Berger 

wrote a check from his attorney-client account to “cash” for $199,931.17, placing a note on the 

check, “For UHI (illegible) account.”174 “UHI” refers to Unlimited Horizon, Inc. which cashed 

the check the same day, and deposited the funds into its account at Union Bank of California, 

                                                           

165 8/2/96 SQN scanned signature for account 16646-09603, BAC-PSI-04678. 166 7/6/05 City National Bank account statement, CNB0005540. 167 9/30/04 Declaration of Teodoro Nguema-Obiang to the Superior Court of California, County of Los Angeles, 

CNB0004068. 

168 Various dates, wire transfer records from Bank of America, BAC-PSI-02424-25. 

169 SEN 004438 (Mr. Berger wrote: “Here is the updated information that you need to wire transfer money to my 

Attorney Client Trust Account at Bank of America. Name of Account: Law Offices of Michael Jay Berger 

Attorney-Client Trust Account”). 

170 8/4/06 wire transfer record, BAC-PSI-02445. 171 Various dates, wire transfer records from Bank of America, BAC-PSI-02445-69. This $1.3 million is in addition 

to the $9.7 million deposited into the Beautiful Vision account from 2004 to 2005. 172 BAC-PSI-02395-441 (Sealed Exhibit). See also Citibank account file, C0000003-24. 173 Various dates, wire transfer records from Bank of America, BAC-PSI-02442-69.. 174 The check amount corresponds to a $200,000 incoming wire amount, less a $45 wire transfer fee. 10/31/06 

account statement from Bank of America, BAC-PSI-02371. 
40 

Account No. 0720115409.175 This transaction was described in an email from Mr. Berger to 

Mr. Obiang as follows: 

“Dear Mr. Nguema: 

This confirms my receipt of a wire transfer from you in the amount of $199,941.17 [sic]. 

This money was received in my attorney client trust account at Bank of America on 

October 20, 2006. Per our telephone conversation today, I will transfer said funds to the 

Unlimited Horizon General Checking Account at Union Bank on Monday (when Union 

Bank opens) and use said funds to pay your bills. ... 

Sincerely, 

Michael Berger”176

On July 26, 2007, the Berger attorney-client account received another EG wire transfer 

from Socage for $199,948.82.177 The same day, Mr. Berger wrote a check on his account to 

“cash” for $199,948.82 with a note “for cashier’s check for client.” The check was deposited 

into an Unlimited Horizon account at Citibank, Account No. 202018867.178

On August 5, 2007, Mr. Berger sent the following email asking Mr. Obiang to send 

$200,000 to the Berger attorney-client account at Bank of America so that the money could be 

used to pay Mr. Obiang’s bills. 

“Dear Mr. Nguema: 

... All approved check requests have been paid, with the following 4 exceptions: 

Hagerty Insurance Agency $8,165.00 (add on Bentley Azure) 

Gearys $1,734.17 (2 wine glasses) 

South Coast Water $3,221.31 (portable car wash machine) 

Xtreme Marine $8,044.26 (service speed boat) 

I did not have enough money to pay these 4 bills[.] 

I have prepared and attached an invoice to you requesting a wire transfer of $200,000.00 

to my Bank of America Client Trust Account. I will need these funds to pay additional 

bills for you. A copy of my Bank of America Client Trust Account Wire Transfer 

Information is attached hereto. ... 

Sincerely, 

Michael Berger”179

                                                           

175 9/28/07 account statement from Bank of America, BAC-PSI-02394; 10/23/06 check to UHI, BAC-PSI-02406. 176 10/21/06 email from Mr. Berger to Mr. Obiang, SEN012377. 177 7/31/07 account statement from Bank of America, BAC-PSI-02390. 178 7/31/07 account statement from Citibank, C0000027. 

179 8/5/07 email from Mr. Berger to Mr. Obiang, SEN004594. 
41 

Shortly afterward, on August 16, 2007, Somagui sent a wire transfer from Equatorial 

Guinea for $199,908.45 to the Berger attorney-client account.180 On the same day, Mr. Berger 

wrote a check on that account to “cash” for $199,908.45 with a note for “Unlimited Horizon, Inc. 

Cashier’s Check.” The check was deposited into the Unlimited Horizon account at Citibank, 

Account No. 202018867.181 

A final example occurred on September 11, 2007, when Somagui sent an EG wire 

transfer for $199,934.10 to the Berger attorney-client account.182 On the same day, Mr. Berger 

wrote a check on that account to “cash” for $199,934.10 with a note for “Cashier’s Check.” As 

before, the check was deposited into the Unlimited Horizon account at Citibank.183 

The following chart lists key EG incoming wires to the Berger attorney-client account at 

Bank of America from 2005 to 2007. 

Select Incoming EG Wires to Berger Attorney‐Client Account at Bank of America

Date Amount Originator Ordering

Bank

Correspondent Ultimate Beneficiary Bates

8/8/05 $ 299,933.50 Teodoro Obiang Belgolaise

Bank in Paris

None specified Beautiful Vision Account  

02139‐06465 at Bank of America

BAC‐PSI‐02914

8/4/06 $ 299,923.68 SOCAGE, BATA   NATEXIS

BANQUES

None Specified Funded multiple checks drawn on

Berger Attorney‐Client Account

16646‐09603 at Bank of America

BAC‐PSI‐02445

9/26/06 $ 199,975.90 SOCAGE, BATA   CCEI Bank GE ING Belgium Funded multiple checks drawn on

Berger Attorney‐Client Account

16646‐09603 at Bank of America

BAC‐PSI‐02449

10/20/06 $ 199,976.17 SOCAGE, BATA   CCEI Bank GE ING Belgium Unlimited Horizon Account

0720115409 at  

Union Bank of California

BAC‐PSI‐02454

7/26/07 $ 199,948.82 SOCAGE, BATA   CCEI Bank GE Northern Trust

Int’l Bank

Unlimited Horizon Account

202018867 at Citibank

BAC‐PSI‐02458

8/14/07 $ 199,933.45 SOMAGUI, BATA   NATEXIS

BANQUES

None Specified Unlimited Horizon Account

202018867 at Citibank

BAC‐PSI‐02462

9/11/07 $ 199,934.10 SOMAGUI, BATA   CCEI Bank GE Northern Trust

Int’l Bank

Unlimited Horizon Account

202018867 at Citibank

BAC‐PSI‐02466

TOTAL‐  $1,599,625.62 SOURCE‐ Bank of America

Prepared by Subcommittee

By 2006, Bank of America knew that Mr. Berger was working with Mr. Obiang and had 

established the Beautiful Vision accounts for him, but took no action for more than two years to 

review the EG wires going into the Berger attorney-client account. 

                                                           

180 BAC-PSI-02462-65. 181 SEN004605; 8/31/07 account statement from Citibank, C0000030; 6/26/07 Citibank account enrollment form for 

Unlimited Horizon, Inc., C0000018. 

182 4/26/04 wire transfer, BAC-PSI-02466-69. This amount was the amount sent by wire transfer less a wire transfer 

fee. 

183 SEN004605; 9/30/07 account statement from Citibank, C0000033; 6/26/07 Citibank account enrollment form for 

Unlimited Horizon, Inc., C0000018. 
42 

In the meantime, Mr. Berger used his attorney-client account to transfer funds to both the 

Beautiful Vision and Unlimited Horizon accounts, as well as to pay some Obiang bills and 

expenses. This chart lists significant disbursements totaling in excess of $4.8 million from the 

Berger attorney-client account from 2004 to 2007. 

Select Disbursements from Berger Attorney‐Client Account at Bank of America

Date “To:” Amount Bates

11/1/04 Beautiful Vision Account 02139‐06465 at Bank of America $ 1,000,000.00 BAC‐PSI‐02398

11/1/04 Beautiful Vision Account 02139‐06466 at Bank of America $    500,000.00 BAC‐PSI‐02399

11/1/04 Beautiful Vision Accounts 02135‐00057 (CD) & 02132‐00049 (CD)

at Bank of America

$ 1,600,000.00 BAC‐PSI‐02400

7/29/05 Beautiful Vision Account 02139‐06465 at Bank of America $   669,691.02 BAC‐PSI‐02401

8/31/06 Saurman Investigative Services “For: Sweetwater Malibu, LLC” $     56,544.00 BAC‐PSI‐02404

10/4/06 Saurman Investigative Services “For: Sweetwater Malibu, LLC” $     54,720.00 BAC‐PSI‐02405

10/23/06 Cash (“For: Cashier’s Check UHI Gen. Acct.”) – Unlimited Horizon

Account at Union Bank of California

$   199,931.17 BAC‐PSI‐02406

7/6/07 Saurman Investigative Services “For: TNO June 2007” $     54,720.00 BAC‐PSI‐02408

7/10/07 Cash “For Cashier's Check Unlimited Horizons, Inc.” / Deposited to

Unlimited Horizon Account 202018867 at Citibank

$   100,000.00 BAC‐PSI‐02409

7/27/07 Cash “For: Cashier's Check for Client” / Deposited to Unlimited Horizon

Account 202018867 at Citibank

$   199,948.82 BAC‐PSI‐02407

8/16/07 Cash “For: Unlimited Horizon, Inc. Cashiers Check” / Deposited to

Unlimited Horizon Account 202018867 at Citibank

$   199,908.45 BAC‐PSI‐02410

9/11/07 Cash “For: Cashier's Check”/Deposited to Unlimited Horizon

Account 202018867 at Citibank

$   199,934.10 BAC‐PSI‐02411

Source‐ Bank of America                                          Total‐ $4,835,397.56

Prepared by Subcommittee

A comparison of the two charts shows five instances in which an incoming EG wire 

transfer into the Berger attorney-client account was followed by an outgoing check in the same 

amount to an Unlimited Horizon account. The timing and amounts of those transfers suggest 

that the funds were deliberately sent to the attorney-client account first, even though the funds 

were ultimately intended for an Unlimited Horizon account at another bank. The transfers 

suggest that Mr. Obiang, with the assistance of Mr. Berger, was making a deliberate effort to 

conceal the source of funding for the Unlimited Horizon accounts. By routing the funds through 

the Berger attorney-client account at Bank of America first, the funds deposited into the 

Unlimited Horizon accounts at UBOC and Citibank were presented as transfers from the account 

of a U.S. lawyer rather than from a company in Equatorial Guinea. Mr. Berger assisted in this 

scheme by accepting the EG wire transfers and then transferring the same amount of funds via 

checks to the Unlimited Horizon accounts. Essentially, Mr. Berger allowed his attorney-client 

account to function as a pass-through account and conceal the fact that the Unlimited Horizon 

accounts at UBOC and Citibank were recipients of suspect funds from Equatorial Guinea. 

In June 2008, the Subcommittee contacted the bank and inquired about whether the 

Berger attorney-client account was being used as a conduit for Obiang funds. Bank of America 

told the Subcommittee that an analysis performed in response to the Subcommittee’s inquiry 

uncovered the Obiang and EG connections to the Berger attorney-client account.184 Bank of 

                                                           

184 Subcommittee interview of Bank of America officials, April 22, 2009. 
43 

America told the Subcommittee that it “wasn’t comfortable” with the transactions, viewed them 

as suspicious, and closed the attorney-client account in July 2008.185 

(iii) Citibank 

Still another U.S. bank account utilized by Mr. Obiang, with the assistance of Mr. Berger, 

was an account opened by Mr. Berger in the name of Unlimited Horizon, Inc. at Citibank in 

Beverly Hills, California. Beginning in July 2007, more than $1 million in suspect funds from 

Equatorial Guinea were transferred from the Berger attorney-client account to this account and 

used to pay Mr. Obiang’s bills and expenses. Citibank closed the account in May 2008, ten 

months after it was opened.186

 Mr. Berger opened Citibank Account No. 202018867 in the name of Unlimited Horizon, 

Inc. on June 25, 2007, thirteen days after the closing of the Unlimited Horizon account at Union 

Bank of California.187 Mr. Berger was the sole signatory on the account, and apparently actively 

hid from Citibank the company’s connection to Mr. Obiang.188 

 At the time of the account opening, Citibank conducted a due diligence review of 

Unlimited Horizon, including by reviewing its corporate records, requiring completion of a 

know-your-customer form, and conducting a physical site inspection of the company using the 

address provided by Mr. Berger.189 As part of this due diligence process, Mr. Berger provided a 

copy of Unlimited Horizon’s incorporation documents and identified himself as the company’s 

president.190 

Mr. Berger also filled out a Citibank form entitled, “Senior Public Figure Screening,” 

requesting details on any politically connected signatory or owner of more than a 25% of the 

company’s shares. Mr. Berger indicated on the form that no signatory or account owner was a 

citizen of a country other than the United States. By answering in the negative, Mr. Berger was 

not required to and did not answer the following question which asked: “If yes, are any of such 

owners a Senior Political Figure (for example, a current or former Senior Public Figure or Senior 

Official in the executive, legislative, administrative, military or judicial branch of government) 

or a close associate/family member ....”191 

The final step in Citibank’s due diligence process was a site inspection of the place of 

business listed on the account opening forms. On June 26, 2007, one day after the account 

application, a Citibank personal banker toured the address of Unlimited Horizon, Inc. provided 

by Mr. Berger.192 The banker’s report described the type of business as providing legal 

                                                           

185 Subcommittee interview of Bank of America officials, March 25, 2009; document disclosing Mr. Berger’s 

accounts, BAC-PSI-07607. 186 Mr. Obiang also had a Citibank credit card in his own name from June 30, 2005 to March 2008, when the 

account was closed. The credit card account had been inactive since March 2007. See 3/19/09 letter from Citibank 

to the Subcommittee, PSI-Citi-34-0001-08, at 06. 

187 7/11/07 email from Mr. Berger to Mr. Obiang, C0000006; SEN004574. 188 6/26/07 Citibank account enrollment form for Unlimited Horizon, Inc., C0000018. 

189 6/27/07 Citibank Single Stock Holder Checklist, C0000005. 

190 10/27/05 Articles of Incorporation for Unlimited Horizon, Inc. as provided to Citibank, C0000016; Citibank 

account file for Unlimited Horizon cover sheet, C0000004. 

191 6/22/07 Citibank: CitiBusiness Deposit Account Application, Senior Public Figure Application, C0000014. 

192 6/26/07 Citibank, Observations at Place of Business, C0000021. 
44 

accounting services, the number of employees present as three, and other characteristics of the 

office.193 Mr. Berger had provided the address for his own law offices. The Citibank report 

states: “Mr. Berger also owns Law Offices of Michael Jay Berger and D&B verification result 

showed a confidence code: 6. Same address and phone number.”194 

Mr. Berger failed to disclose that the beneficial owner of Unlimited Horizon – the true 

beneficiary of the company – was Mr. Obiang.195 He also represented that his law offices served 

as the physical office of Unlimited Horizon, without disclosing that Unlimited Horizon was a 

shell company with no employees or physical presence of its own. He allowed the Citibank 

banker to think that Unlimited Horizon provided legal accounting services, when it did not. 

Mr. Berger also failed to disclose that the company had a direct connection to a senior foreign 

official, Mr. Obiang, who was then serving as the Minister of Agriculture and Forestry in 

Equatorial Guinea. 

Based upon the information it was provided, Citibank agreed to open the account for 

Unlimited Horizon on June 25, 2007. Citibank records show that the account was first funded 

two weeks later, on July 10, 2007, with a $100,000 cashier’s check from Bank of America.196 

This cashiers check had been paid for with funds from the Berger attorney-client account. A 

July 12, 2007 email from Mr. Berger to Mr. Obiang makes it clear that these were Obiangrelated funds: 

“Dear Mr. Nguema, ... I went to Bank of America, withdrew $100,000.00 of your 

money from my Bank of America client trust account, purchased a cashier's check for 

$100,000.00 made out to Unlimited Horizon, Inc. and deposited said cashier's check into 

the new Unlimited Horizon, Inc. account at Citibank.”197

Over the next five months, the Unlimited Horizon account received five more large 

deposits, totaling nearly $1 million, all of which were secretly linked to Mr. Obiang. On July 27, 

2007, for example, following a wire transfer for nearly $200,000 from “Somagui” in Equatorial 

Guinea to the Bank of America attorney-client account, Mr. Berger withdrew the same amount 

from that account and deposited it into the Unlimited Horizon account at Citibank.198 Three 

weeks later, on August 16, 2007, Mr. Berger withdrew nearly $200,000 from his attorney-client 

account at Bank of America and deposited the same amount into the Unlimited Horizon account 

at Citibank.199 A month after that, on September 11, 2007, he did it again. After receiving a 

wire transfer for nearly $200,000 from “Somagui” in Equatorial Guinea to his Bank of America 

attorney-client account, Mr. Berger withdrew the same amount from that account and deposited 

it into the Unlimited Horizon account at Citibank.200 On October 12, 2007, it happened a fourth 

time. Mr. Berger withdrew nearly $200,000 from his Bank of America attorney-client account 

                                                           

193 Id. 

194 Id. 

195 See, e.g., 10/15/06 email from Mr. Berger to Mr. Obiang, SEN004465 (Mr. Berger wrote: “Unlike my client trust 

account which is used for many clients, the 2 Unlimited Horizon Accounts [at Union Bank of California] are used 

exclusively for your business.”). 

196 7/31/07 account statement from Citibank, C0000026; SEN004595. 

197 7/12/07 email from Mr. Berger to Mr. Obiang, SEN004586. 

198 BAC-PSI-02458; BAC-PSI-02407; SEN004598; 7/31/07 account statement from Citibank, C0000027. 

199 8/31/07 account statement from Citibank, C0000030; BAC-PSI-02410; SEN004605. 200 BAC-PSI-02411; BAC-PSI-02466; SEN004605; 9/30/07 account statement from Citibank, C0000033. 
45 

and deposited the same amount into the Unlimited Horizon account at Citibank. Finally, on 

November, 9, 2007, he withdrew nearly $170,000 from the same attorney-client account and 

deposited the same amount into the Unlimited Horizon account at Citibank.201 These five 

deposits, in addition to the initial deposit of $100,000, meant that the Citibank account collected 

over $1 million in less than six months. 

The funds sent to Mr. Berger’s attorney-client account at Bank of America could have 

been sent directly to the Unlimited Horizon account at Citibank, but if they had been, Citibank 

would have been alerted the funds were being wired from Equatorial Guinea. The fact that the 

funds were routed first through the attorney-client account suggests that Mr. Berger was 

deliberately assisting Mr. Obiang in hiding his involvement in the funding of the Citibank 

account. 

The Obiang-related funds in the Berger attorney-client account were used to pay Obiangrelated bills and expenses, including payroll expenses associated with his Malibu residence. On 

May 20, 2008, less than one year after the account was opened, Citibank closed the Unlimited 

Horizon account, because “activity in the account was inconsistent with the account profile.”202

A little over $6,000 was in the account when it was closed.203

(iv) PayPal 

 Mr. Berger used three U.S. banks, Union Bank of California, Bank of America, and 

Citibank, to help Mr. Obiang bring millions of dollars in suspect funds into the United States, 

through shell company, attorney-client, and other accounts. He apparently also considered using 

other payment systems for this purpose. On June 8, 2007, for example, Mr. Obiang’s assistant 

Suellen Everett wrote to Mr. Berger requesting that he purchase a product called “jumping stilts” 

for Mr. Obiang: 

“The boss saw a guy running down the street in these contraptions and wanted them. In 

order to get them by Saturday we must pay via the link below ....”204

Mr. Berger replied: 

“I have set up a PayPal account for Unlimited Horizon, Inc. It will take 2 or three 

business days to get verified. At that point, I will be able to use PayPal to make 

payments for Unlimited Horizon in any amount up to the balance of the account. This 

will be a good thing for the future and will give Mr. Nguema extra flexibility in ordering 

and paying for items....”205

By setting up a PayPal account in the name of a shell company, Mr. Berger could have 

enabled Mr. Obiang once more to hide his involvement in making purchases that, while trivial 

here, could involve a more serious expenditure of suspect funds in the future. 

                                                           

201 SEN004675. 202 3/19/09 letter from Citibank to the Subcommittee, PSI-Citi-34-0001-08, at 07. 203 2/29/08 account statement from Citibank, C0000056. 204 6/7/07 email from Ms. Everett to Mr. Berger, SEN002185. 205 Mr. Berger previously established an account at Union Bank of California in the name of Unlimited Horizon, 

Inc.; see also 6/7/07 email from Mr. Berger to Ms. Everett, SEN002184. 
46 

When Paypal was contacted by the Subcommittee, however, it was unable to find any 

account that had been opened in the name of Unlimited Horizon, Inc., Beautiful Vision, Inc., or 

other corporations associated with Mr. Obiang. Nor had any account been opened in the name of 

Mr. Obiang. The Subcommittee was thus unable to confirm, despite Mr. Berger’s 2007 email, 

that any PayPal account for Mr. Obiang had actually been established. 

(c) Compensation 

The total amount and form of the compensation provided by Mr. Obiang to Mr. Berger in 

return for his services are unclear. Mr. Berger periodically requested wire transfers from 

Mr. Obiang in amounts ranging from $200,000 to $400,000 to be sent to Mr. Berger’s attorneyclient accounts to pay for “legal services to be rendered to you and costs to be paid for you 

pursuant to our July 26, 2006 personal services agreement.”206 These funds were provided on at 

least a monthly basis, but it is unclear how much Mr. Berger retained as compensation for his 

own services.207 The records also show that, from October 2006 to March 2007, Mr. Berger 

wrote himself a monthly $5,000 self-endorsed check from the Unlimited Horizon account at 

UBOC, for a total of $30,000 over six months.208 Still another document indicates that 

Mr. Berger was paid a $60,000 fee for referring Mr. Obiang to a California real estate agent who 

helped him purchase his $30 million Malibu residence, as explained further below.209 

In addition to this cash compensation, as a result of his relationship with Mr. Obiang, 

Mr. Berger was invited to exclusive social events and venues in Southern California. After a 

party called the “Nguema Summer Bash” on September 14, 2007, for example, Mr. Berger sent 

the following email to Mr. Obiang: 

“Thank you very much for inviting me to your party and for being so nice to me at the 

party. I appreciate the super VIP treatment that you gave me. I appreciate you telling 

your friends that I am your attorney. I am proud to work for you. ... The food was 

great, the drinks were better than great, the house, the view, the DJ, the white tiger were 

all SO COOL! Best of all were the people that I met there because of you.”210

Mr. Obiang also arranged for Mr. Berger to be invited to the 2007 “Kandy Halloween 

Bash” at the Playboy Mansion.211 After the party, Mr. Berger wrote: 

“Dear Mr. Nguema: 

                                                           

206 See, e.g., 8/23/07 invoice from Mr. Berger to Mr. Obiang, SEN007758; 8/5/07 invoice from Mr. Berger to 

Mr. Obiang, SEN007767; 8/5/07 wire transfer information, SEN007769; 11/29/07 invoice from Mr. Berger to 

Mr. Obiang, SEN007785; 10/30/07 invoice from Mr. Berger to Mr. Obiang, SEN007786; 9/25/07 invoice from 

Mr. Berger to Mr. Obiang, SEN007796. 

207 Id. 208 Various dates, checks from Unlimited Horizon to Mr. Berger, PSI-Union_Bk_Calif-01-000391; 000331, 

000274, 000239, 000182, 000140 (Sealed Exhibit). 

209 3/11/09 legal counsel to Neal Baddin’s written response to Subcommittee questions, PSI-Coldwell_Banker-03-

0003. 

210 9/15/07 email from Mr. Berger to Mr. Obiang, SEN004620. 211 10/12/07 email from Mr. Berger to Mr. Obiang accepting the invitation to the Kandy Halloween party, 

SEN004651. 
47 

Thank you very much for inviting me to the Kandy Halloween party @ The Playboy 

Mansion and getting me the VIP treatment. I had an awesome time. I met many 

beautiful women, and I have the photos, e-mail addresses and phone numbers to prove it. 

If the word gets out that you are looking for a bride, women all over the world will go 

even more crazy for you. ... 

Your loyal friend and attorney, 

Michael Berger.”212

These documents suggest that, through Mr. Obiang, Mr. Berger gained access to exclusive 

settings that might otherwise have been inaccessible to him. 

(2) Attorney George I. Nagler

 For a two-year period from 2005 to 2007, Mr. Obiang employed a second California 

attorney, George I. Nagler, to advance his interests in the United States. Mr. Nagler helped 

Mr. Obiang purchase and manage the Malibu property, incorporated shell companies for 

Mr. Obiang, persuaded others to open accounts in the names of those companies, and for a short 

time allowed Obiang funds to be funneled through his own attorney-client and law office 

accounts. Altogether, Mr. Nagler helped Mr. Obiang bring over $2.1 million in funds from 

Equatorial Guinea into the United States. In addition, Mr. Nagler worked with a colleague in the 

insurance industry to help Mr. Obiang obtain insurance for his fleet of 32 cars and motorcycles. 

Mr. Nagler and Mr. Berger met, but appeared to work independently of each other. 

Mr. Nagler is a graduate of Harvard University and has been admitted to practice law in 

California since 1970.213 According to his website, his areas of practice include real estate, 

business law, and limited liability companies, among others.214 Mr. Nagler provided documents 

in response to a Subcommittee subpoena and answered written questions from the 

Subcommittee. 

 According to Mr. Nagler, he provided legal services to Mr. Obiang for two years, from 

approximately September 2005 through September 2007.215 Those services related primarily to 

Mr. Obiang’s purchase of the $30 million Malibu residence, and included assisting Mr. Obiang 

in the formation of three shell companies, arranging for the purchase and management of his 

Malibu property, and handling various insurance matters.216 Mr. Nagler told the Subcommittee 

that in performing these duties he did “not believe that he ever concealed or mischaracterized the 

Client’s association with any account.”217 The documentation also indicates that, like 

Mr. Berger, Mr. Nagler was well aware of the suspect origins of Mr. Obiang’s funds. Mr. Nagler 

told the Subcommittee that he was paid fees for his services which, over the two years, totaled 

about $196,500.218

                                                           

212 10/28/07 email from Mr. Berger to Mr. Obiang, SEN004389. 213 Lawyers.com, http://www.lawyers.com/California/Beverly-Hills/George-I.-Nagler-78953-a.html. 214 Law Offices of George I. Nagler, http://www.georgenagler.com/. 215 8/1/08 letter from Mr. Nagler’s legal counsel to the Subcommittee, PSI-Nagler-02-0002. 216 Id. 217 Id., at PSI-Nagler-02-0009. 218 Id., at PSI-Nagler-02-0002. 
48 

(a) Incorporating Shell Companies 

Mr. Nagler told the Subcommittee that he helped Mr. Obiang establish three California 

corporations, Sweet Pink, Inc., Sweetwater Malibu, LLC, and Sweetwater Management, Inc. 

Sweet Pink, Inc. According to Mr. Nagler, he began working for Mr. Obiang in 

September 2005, after being contacted through the Internet by Mr. Obiang’s executive assistant, 

Rosalina Romo.219 

Mr. Nagler told the Subcommittee that he was asked at that time to form a corporation 

“to employ individuals at the home the Client maintained before he purchased the Malibu 

Property and to handle payroll and other matters related to the employment of those 

individuals.”220 In an email dated September 15, 2005, Mr. Nagler asked Ms. Romo to provide 

him with two or three names for the corporation.221 Later that same day, he requested articles of 

incorporation be filed with the California Secretary of State for “Sweet Pink Inc.”222 The 

Statement of Information for Sweet Pink, Inc. listed Ms. Romo as the company’s Chief 

Executive Officer, Secretary, and Chief Financial Officer.223 Mr. Obiang is listed as “assistant 

treasurer,”224 but Mr. Nagler told the Subcommittee that it was his understanding that 

Mr. Obiang “was the sole owner” of the corporation and was the “sole source of funding” for the 

corporation.225 

On September 22, 2005, Mr. Nagler faxed an “engagement letter” to Marvin Freedman, a 

certified public accountant, with instructions to immediately open a bank account for Sweet 

Pink, Inc. and obtain wiring instructions so that Mr. Obiang could fund the account.226 

“He [Mr. Obiang] wants you to open a bank account as soon as you can forward the 

wiring instructions so he can wire funds. You should plan to have two or three people in 

your office authorized to sign the account. You should add him as the assistant treasurer 

as able to sign alone. ... He is in Paris and can arrange to wire the funds from there.”227

A few days later, Mr. Nagler was told that Eve Jeffers, a hip-hop musician and 

Mr. Obiang’s then girlfriend, would become the president of the corporation. On September 28, 

2005, Mr. Nagler sent the following instructions to Mr. Freedman and Ms. Romo regarding 

signatory authority for the Sweet Pink account at Union Bank of California: 

“I understand that Eve Jeffers, the President, Secretary, and Chief Financial Officer will 

be coming in to the Encino branch of Union Bank to sign the signature card today. She 

signing alone will have signing authority, Mr. Obiang will also have signing authority 

acting alone when he can come in and sign and you will initially be authorized. Three 

                                                           

219 Id., at PSI-Nagler-02-0010. 220 Id., at PSI-Nagler-02-0004. 221 9/15/05 email from Mr. Nagler to Ms. Romo, SEN005785. 222 9/15/05 fax from Mr. Nagler, SEN005786. 223 State of California, Statement of Information for a Domestic Stock Corporation, SEN013765. 224 Id. 225 8/1/08 letter from Mr. Nagler’s legal counsel to the Subcommittee, PSI-Nagler-02-0004-05. 226 9/22/05 fax from Mr. Nagler to Mr. Freedman, SEN005761. 227 Id. 
49 

other people from your office will be authorized to sign so long as two of you sign all 

checks. You expect that the other three will sign the signature card some time this week. 

In the interim you will be authorized to sign alone. 

Lina, by copy [being] sent to you, please ask Eve to call you when she has signed. You 

should then call or fax Mr. Freedman and tell him that the card has been signed. 

Mr. Freedman can then open the account and send the complete wiring instructions to 

you by fax. I understand that the funds will be wired by Mr. Obiang from a bank out of 

town.”228

The next day, September 29, 2005, a checking account in the name of Sweet Pink, Inc., 

Account No. 1300052831, was opened at Union Bank of California. Ms. Jeffers was a signatory 

along with four other persons from Mr. Freedman’s firm. Mr. Obiang was not on the signature 

card.229 During October 2005, two wire transfers, each for nearly $30,000, were deposited into 

the account from Somagui Forestal, one of Mr. Obiang’s EG companies.230 Union Bank of 

California learned of the large wire transfers from Equatorial Guinea, which it had designated as 

a high-risk jurisdiction. On October 27, 2005, less than one month after the account opening, the 

bank closed the Sweet Pink account. 

Sweetwater Malibu, LLC. In February 2006, Mr. Nagler formed a second California 

corporation for Mr. Obiang, Sweetwater Malibu, LLC. Mr. Nagler told the Subcommittee that 

this corporation was formed “to take title to the Malibu Property,”231 which was then in the 

process of being purchased. In a memorandum he sent to Mr. Obiang, Mr. Nagler provided this 

explanation of the company: 

“Sweetwater Malibu, LLC. This limited liability company will be the buyer of the 

Malibu. I had it formed on Tuesday, February 7, 2006, by sending the papers to the 

Secretary of State. I need you to give me the name of the person who you want to act as 

manager. I need someone who is a US taxpayer so that we can apply for a tax 

identification number for the company. If you do not give me a name, I will show you as 

the manager.”232

The Sweetwater Malibu, LLC articles of organization were filed with the California 

Secretary of State on February 8, 2006.233 They identified Mr. Nagler as the initial agent for 

service of process and stated that Sweetwater Malibu, LLC would be managed by a single 

manager who was not named.234 The articles made no mention of Mr. Obiang, however, a week 

                                                           

228 9/28/05 fax from Mr. Nagler to Mr. Freedman, SEN005736. 

229 Union Bank of California internal report, PSI-Union_Bank_of_California-04-0191. 230 3/2/09 Union Bank of California Case Report on Sweet Pink, Inc., PSI-Union_Bank_of_California-04-0191. 231 8/1/08 letter from Mr. Nagler’s legal counsel to the Subcommittee, PSI-Nagler-02-0003. See also 4/3/06 fax 

from Mr. Nagler to the First American Title Co., SEN006103 (Sweetwater Malibu, LLC was formed for the purpose 

of “purchasing, owning and operating a residence commonly known as 3620 Sweetwater Mesa Road, Malibu, CA 

90265.”). 

232 2/21/06 fax from Mr. Nagler to Mr. Obiang, SEN0011704 233 2/8/06 Sweetwater Malibu, LLC Articles of Organization, PSI-Pacific_Mercantile_Bank-01-0263. 234 Id. 
50 

later, on February 15, 2006, Mr. Obiang signed an “Operating Agreement for Sweetwater 

Malibu, LLC” identifying him as the “sole member of the company.”235

 Three weeks after the formation of the corporation, on February 27, 2006, a grant deed 

was signed and notarized selling the Malibu property to Sweetwater Malibu, LLC.236 The 

grantor requested that notification of the recording of the deed be sent to “Sweetwater Malibu, 

LLC, care of George Nagler.”237

On March 31, 2006, a confidentiality agreement was signed by the realty company that 

handled the sale, Coldwell Banker, to prohibit disclosure of Mr. Obiang as the purchaser of the 

property, the terms of the purchase, or the value of the property, for a period of 50 years.238 

According to the agreement, any disclosure made pursuant to legal process required notification 

to Mr. Nagler and the seller’s attorney.239 Hilton & Hyland, the seller’s agent, told the 

Subcommittee that both the seller and Mr. Obiang had wanted the confidentiality agreement. 

About six months later, on September 15, 2006, a Statement of Information for 

Sweetwater Malibu, LLC was filed with the California Secretary of State and listed Mr. Obiang 

as the sole manager of the corporation.240 Mr. Nagler told the Subcommittee that Mr. Obiang 

“was the sole manager” of Sweetwater Malibu, LLC “after March 2, 2006.”241 He said that 

Sweetwater Malibu, LLC “had no employees.”242

Sweetwater Management, Inc. A few weeks after setting up Sweetwater Malibu, LLC, 

Mr. Nagler established a third California corporation for Mr. Obiang called Sweetwater 

Management, Inc. A February 21, 2006, memorandum from Mr. Nagler to Mr. Obiang describes 

the corporation as follows: 

“New Management Company. You asked me to form a new management company to 

handle the payroll and to employ all the employees that you now have and will have at 

the Malibu house. You also asked me to prepare a draft of an employment agreement. 

We talked about using the name Sweetwater Management, Inc. You thought that name 

was acceptable. Do you want me to form this company?”243 

On May 16, 2006, Sweetwater Management, Inc. was incorporated using Mr. Nagler’s 

business address in Beverly Hills, California.244 The California “Statement of Information” 

listed Mr. Obiang as the company’s sole director and identified Mr. Nagler as the agent for 

                                                           

235 2/15/06 Operating Agreement for Sweetwater Malibu, LLC, PSI-Pacific_Mercantile_Bank-01-0266-73. 236 2/27/06 Grant Deed of 3620 Sweetwater Mesa Road, PSI-Coldwell_Banker-01-000069. 237 Id. 238 3/31/06 Broker Confidentiality Agreement, PSI-Coldwell_Banker-01-000509. 

239 Id., at PSI-Coldwell_Banker-01-000510. 240 9/25/06 Statement of Information regarding Sweetwater Malibu, LLC, signed by Mr. Obiang, PSIPacific_Mercantile_Bank-01-0262. 

241 8/1/08 letter from Mr. Nagler’s legal counsel to the Subcommittee, PSI-Nagler-02-0003. 242 Id. 243 2/21/06 fax from Mr. Nagler to Mr. Obiang, SEN011704. 244 See 5/16/06 Sweetwater Management, Inc. Articles of Incorporation, PSI-Pacific_Mercantile_Bank-01-0215-16; 

SEN005882. 
51 

service of process.245 Another document filed a week later named Mr. Obiang as the president, 

chief financial officer, and secretary of Sweetwater Management, Inc.246 An employee contract 

later described the purpose of Sweetwater Management, Inc. as “providing various services to 

Sweetwater Malibu, LLC.”247

Documentation obtained by the Subcommittee shows that bank accounts that were later 

opened in the name of Sweetwater Management provided funds for employee and other expenses 

associated with Mr. Obiang’s Malibu property.248 The documents also show that Mr. Nagler 

helped manage the domestic staff payroll through Sweetwater Management and paid a number of 

bills associated with that property as well as other expenses incurred by Mr. Obiang.249

 (b) Bringing In and Moving Suspect Funds 

 During the two years that he was employed by Mr. Obiang, from September 2005 to 

September 2007, Mr. Nagler helped Mr. Obiang open accounts at three small California banks, 

Cal National Bank, City National Bank, and Pacific Mercantile Bank. These accounts included 

accounts opened in the name of two Obiang shell companies that Mr. Nagler helped form, 

Sweetwater Malibu, LLC and Sweetwater Management, Inc.; Mr. Nagler’s own attorney-client 

and law office accounts; and a personal account in Mr. Obiang’s own name which Mr. Nagler 

helped to open. The shell company and Obiang accounts did not last long; the banks closed each 

account after it received a single large wire transfer from Equatorial Guinea, but together these 

accounts managed to bring in over $1.75 million through EG wire transfers. Mr. Nagler 

accepted another $400,000 in Obiang-related funds into his own attorney-client and law firm 

accounts and used the funds to pay Obiang-related bills and expenses for a three-month period in 

the summer of 2006, but then stopped doing so. By September 2007, Mr. Obiang stopped using 

Mr. Nagler’s services, and Mr. Nagler ended his efforts to locate bank accounts that Mr. Obiang 

could use to bring money into the United States from Equatorial Guinea. 

 (i) Cal National Bank 

A few months after Mr. Obiang purchased the Malibu property in April 2006, Mr. Nagler 

facilitated the opening of Sweetwater Malibu and Sweetwater Management accounts at Cal 

National Bank in Westwood, California even though Cal National Bank had a policy against 

doing business with PEPs. Mr. Nagler asked a property management company that was known 

to the bank to open the accounts without disclosing Mr. Obiang’s involvement. The bank 

initially opened the accounts, but after receiving a $250,000 wire transfer from Equatorial 

Guinea and an inquiry from an Obiang employee, the bank learned of Mr. Obiang’s ownership of 

the Malibu property being managed, closed the accounts, and transferred the remaining funds to 

Mr. Nagler’s attorney-client account at City National Bank. 

                                                           

245 See 6/21/06 Sweetwater Management, Inc. Statement of Information, PSI-Pacific_Mercantile_Bank-01-0217; 

SEN009061-72. 

246 5/23/06 “Action by Unanimous Written Consent in Lieu of First Meeting of the Incorporator and Board of 

Directors of Sweetwater Management, Inc.,” SEN009183. See also 8/1/08 letter from Mr. Nagler’s legal counsel to 

the Subcommittee, PSI-Nagler-02-0003. 

247 12/12/06 Employment Agreement of Suellen Everett at Sweetwater Management, Inc., SEN004220. 248 Id.; 7/30/07 Sweetwater Management, Inc. Semi-Monthly Payroll, SEN007509; 6/10/07 Sweetwater 

Management, Inc. Over Time Approval, SEN007510. 

249 1/26/07 email from Mr. Nagler to Ms. Everett, SEN013560. 
52 

 Opening the Accounts. During late 2005 and early 2006, Mr. Nagler actively assisted 

Mr. Obiang in the purchase of the Malibu residence, which was ultimately purchased in the name 

of Sweetwater Malibu, LLC in April 2006. In May 2006, Mr. Obiang, as owner of Sweetwater 

Malibu, LLC, entered into an agreement with Ed Mizrahi of American Equity Properties, Inc. to 

manage the property.250 In connection with that agreement, Mr. Nagler asked Mr. Mizrahi to 

open accounts in the name of Sweetwater Malibu, LLC and Sweetwater Management, Inc. at the 

bank used by his property management firm, so that those accounts could be used to pay for 

expenses related to the Malibu property, but not to disclose Mr. Obiang identity or involvement 

with the property or the corporations. 

 Cal National Bank officials told the Subcommittee that Mr. Mizrahi was well known to 

them as a professional property manager who managed multiple properties and maintained 

numerous accounts for those properties at Cal National Bank.251 They said that, on or about May 

30, 2006, Mr. Mizrahi asked the branch manager to open property management accounts for an 

individual described as “high profile” who “needed his identity to remain anonymous.”252 The 

bank agreed to open the shell company accounts without obtaining the identity of the person or 

determining whether he qualified as a PEP, even though U.S. financial institutions are routinely 

required to obtain this type of information to prevent money laundering. 

In response to Mr. Mizrahi’s request, on May 30, 2006, the bank opened Account No. 

50317171 in the name of “American Equity Properties, Inc. ITF: Sweetwater Malibu.”253 

Mr. Mizrahi was the sole account signatory.254 As part of the account opening documentation, 

the bank obtained a copy of the management agreement between American Property 

Management and Sweetwater Malibu, LLC.255 

The next day, Mr. Mizrahi, accompanied by Melinda Dehaven, an Obiang employee, 

opened three additional accounts: Account No. 50317197 for Sweetwater Management, Inc. – 

Payroll; Account No. 50317205 for Sweetwater Management, Inc. – Household; and Account 

No. 50317254 for Sweetwater Management, Inc. – Corporate. Ms. Dehaven was a signatory on 

all three accounts and apparently funded them with money transferred from her personal account 

at Bank of America.256 Mr. Mizrahi was also a signatory.257

Mr. Nagler sent the following email to Mr. Obiang regarding the opening of the Cal 

National Bank accounts:

                                                           

250 5/23/06 Management Agreement, PSI-Cal_Nat’l_Bank-01-0020-24; Subcommittee interview of Cal National 

Bank officials, February 27, 2009. 

251 Subcommittee interview of Cal National Bank officials, February 27, 2009. 252 7/06 Cal National Bank Account Review and Summary, PSI-Cal_Nat’l_Bank-01-0048; Also see Subcommittee 

interview of Cal National Bank officials, February 27, 2009. 

253 5/31/06 Cal National Bank Business Signature Card and Resolution of Corporation, PSI-Cal_Nat’l_Bank-01-

0091-92. Subcommittee interview of Cal National Bank officials, February 27, 2009. “ITF” means “in trust for.” 254 Subcommittee interview of Cal National Bank officials, November 9, 2009. 255 5/23/06 Management Agreement, PSI-Cal_Nat’l_Bank-01-0020-24. 256 Subcommittee interview of Cal National Bank officials, February 27, 2009. See also deposit tickets and checks 

from Ms. Dehaven, PSI-Cal_Nat’l_Bank-01-0089-90. The Subcommittee did not examine her account to determine 

whether it, too, operated as a conduit for Obiang funds. 257 5/31/06 Cal National Bank Business Signature Card and Resolution of Corporation, PSI-Cal_Nat’l_Bank-01-

0091-92. 
53 

“Mr. Nguema, 

Ed [Mizrahi] called me from the bank. He has been able to open the accounts with 

Melinda in the name of Sweetwater Management, Inc. for both the payroll and the 

household accounts. To do this, we need to have Melinda elected the Secretary instead of 

being an assistant secretary. I will change the first minutes to show her as the secretary. 

You can remove her as secretary any time you wish but it now gives her the authority 

with the bank to open the bank accounts. It avoids you having to go into the bank and 

sign the documents.”258

The Subcommittee does not know whether Mr. Nagler actually “changed” the minutes dating 

from the first Sweetwater Management board meeting as suggested in this email. 

Account Activity. About two weeks later, on June 12, 2006, Cal National Bank received 

a wire transfer for nearly $250,000, sent by Socage in Equatorial Guinea, to the American Equity 

Properties, Inc. ITF: Sweetwater Malibu account.259 The next day, June 13, 2006, Ms. Dehaven 

contacted the bank about the wire transfer and apparently asked to have the money moved from 

the American Equity account, where she was not a signatory, to one of the Sweetwater 

Management accounts where she was a signatory.260 

 According to bank officials interviewed by the Subcommittee, after receiving her inquiry, 

the branch manager reviewed the American Equities-Sweetwater agreement it had on file, 

examined the information provided on ownership of the company, and learned that Mr. Obiang 

was listed as the sole owner and manager of Sweetwater Malibu, LLC.261 The branch manager 

then conducted an Internet search, learned that Mr. Obiang was an EG Minister and the son of 

the EG President, and read about Riggs Bank’s involvement with Equatorial Guinea and the 

Obiang family.262 He then contacted a Cal National Bank compliance officer for guidance.263 

The branch manager also contacted Mr. Mizrahi who sent the following email to Ms. 

Dehaven, with a copy to Mr. Nagler: 

“I was just informed by the Manager at Cal National Bank that you were inquiring why 

the $249,899.80 wire was transferred into the American Equity Properties, Inc. ITF 

Sweetwater Mailibu account and not the Household account (that you are a signer on) or 

the payroll account. ... In the future, if you have questions concerning the transfers of 

monies you should address them with me or George Nagler, and not the bank 

manager.”264 [Emphasis in original.] 

Ms. Dehaven sent the following apology: 

                                                           

258 5/31/06 email from Mr. Nagler to Mr. Obiang, SEN011169. 

259 7/06 Cal National Bank Account Review and Summary, PSI-Cal_Nat’l_Bank-01-0055. 260 6/13/06 email from Mr. Mizrahi to Ms. Dehaven, SEN010959. 261 5/16/06 State of California, Articles of Incorporation for Sweetwater Management, Inc., PSI-Cal_Nat’l_Bank-01-

0024. 

262 7/06 Cal National Bank Account Review and Summary, PSI-Cal_Nat’l_Bank-01-0048. 263 Id. 264 6/13/06 email from Mr. Mizrahi to Ms. Dehaven, SEN010959. 
54 

“Sorry if I didn’t go about it the correct way. I didn’t realize that speaking with [the 

branch manager] wasn’t proper.”265

Mr. Mizrahi later sent another email to Mr. Nagler:266 

“Cal National Bank decided to review the files and researched the Owner and Ownership 

of the property. Upon doing so, the Bank Manager advised me of his finding and said 

that the Bank’s policy is to have ‘clients that are not politically connected.’ He further 

informed me that the bank accounts (that were just opened) could potentially be closed by 

the bank due to their findings.”267 

Account Closings. On June 22, 2006, less than a month after the account was opened, 

Cal National Bank notified American Equity Properties by letter that it was closing all four 

Sweetwater accounts.268 Following the account closure, Cal National Bank placed Mr. Obiang 

and Melinda Dehaven on its “hot list,” which restricted them from receiving banking services 

through the bank.269 The funds remaining in the American Equity Properties, Inc. ITF: 

Sweetwater Malibu account, totaling about $203,000, were wire transferred to Mr. Nagler’s 

attorney-client trust account at City National Bank.270 

Cal National Bank chose not to take any action against Mr. Mizrahi, the property 

manager, even though he opened the Sweetwater accounts and hid Mr. Obiang’s involvement 

from the bank. 

 (ii) City National Bank

After the closure of the Cal National Bank accounts in June 2006, for the next three 

months, Mr. Nagler allowed his attorney-client and law office accounts at City National Bank to 

serve as conduits for about $400,000 in Obiang funds. Mr. Nagler told the Subcommittee that he 

did not recall using these accounts to pay for Obiang-related expenses at any other time.271 

Mr. Nagler told the Subcommittee that during the summer of 2006, at Mr. Obiang’s 

request, he accepted a number of Obiang-related wire transfers into his attorney-client and law 

office accounts at City National Bank, and then used those funds to pay Mr. Obiang’s 

“household and living expenses” while Mr. Obiang made other arrangements.272 To pay the 

bills, Mr. Nagler instructed a payroll company to produce checks imprinted with the Sweetwater 

Management, Inc. name at the top and his attorney-client or law office account number at the 

bottom, and used those checks to pay the Obiang bills. 

                                                           

265 6/13/06 email from Ms. Dehaven to Mr. Mizrahi, SEN010958. 266 6/13/06 email from Mr. Mizrahi to Ms. Dehaven, SEN010959. 267 6/13/06 email from Mr. Mizrahi to Mr. Nagler, SEN010943. 268 6/06 letter from Cal National Bank regarding closure of Sweetwater accounts, PSI-Cal_Nat’l_Bank-01-0049. 

269 Subcommittee interview of Cal National Bank officials, February 27, 2009. 270 6/26/06 wire transfer, PSI-Cal_Nat’l_Bank-01-0051. See also Subcommittee interview of Cal National Bank 

officials, February 27, 2009. 

271 8/1/08 letter from Mr. Nagler’s legal counsel to the Subcommittee, PSI-Nagler-02-0008. See also 7/20/06 email 

from Mr. Nagler to Pacific Mercantile Bank, PSI-Pacific_Mercantile_Bank-01-0154-55 (Mr. Nagler wrote: 

“Currently, I ... have been paying [the Malibu property] bills out of my trust account.”). 

272 Id., at PSI-Nagler-02-00008-09. 
55 

More than a year later, after the bank received an inquiry from the Subcommittee, City 

National Bank conducted a search of its records and learned for the first time that, for a threemonth period during the summer of 2006, Mr. Obiang had utilized the Nagler attorney-client and 

law office accounts. Because there was no sign that Mr. Obiang had continued to use them, City 

National Bank did not close the Nagler accounts, but rated them “high risk” subject to additional 

monitoring. City National Bank also confirmed that it had earlier maintained personal and 

corporate accounts for Mr. Obiang, but had closed the last of those accounts in 2004. 

 Obiang Accounts. Mr. Obiang had already had five years of involvement with City 

National Bank prior to his utilization of the Nagler accounts in 2006. From at least 2001 to 

2004, Mr. Obiang had maintained six corporate and personal accounts at the bank. In 2003, City 

National Bank closed the five corporate accounts. In 2004, the bank opened and then closed a 

personal account for Mr. Obiang due to suspicious transactions, froze $700,000 of his funds, and 

returned those funds to Mr. Obiang only after ordered by a court to do so. 

The first set of accounts at the bank were opened in the name of TNO Entertainment, LLC, 

the California company owned by Mr. Obiang.273 These accounts were: 

 Account No. 101-672085 “TNO ENTERTAINMENT, LLC”; 

 Account No. 101-770427 “TNO ENTERTAINMENT, LLC (PETTY CASH 

ACCOUNT)”; 

 Account No. 101-800261 “TNO ENTERTAINMENT, LLC (SPECIAL ACCOUNT)”; 

 Account No. 101-862860 “TNO ENTERTAINMENT, LLC (PAYROLL ACCOUNT)”; 

 Account No. 101-862852 “TNO ENTERTAINMENT, LLC (MUSIC DIVISION 

ACCOUNT)”.274

 In account opening documents for Account No. 101-672085, Mr. Obiang identified 

himself as the managing member of TNO Entertainment, LLC, and listed his occupation as 

“Recording Executive.”275 Between February and December of 2001, Mr. Obiang made three 

large deposits to that account totaling $3.5 million.276 Those deposits were funded by checks 

drawn against a Riggs Bank account, numbered 76923450, that had been opened in the name of 

TNO Entertainment.277

                                                           

273 Subcommittee interview of City National Bank officials, March 9, 2009. “TNO” refers to Teodoro Ngeuma 

Obiang. 

274 5/28/04 City National Bank Suspicious Activity Report: Part IV Suspicious Activity Information 

Explanation/Description, CNB0001067; 5/8/01 Operating Agreement of TNO Entertainment, LLC, CNB0004863 to 

CNB0004868. 

275 12/4/03 City National Bank Business Account Agreement, CNB0001049. 276 2/28/01 account statement from City National Bank CNB0000614; 11/30/01 account statement from City 

National Bank, CNB0000655; 11/30/01 account statement from City National Bank, CNB0000659, R 2589; 

5/28/04 City National Bank Suspicious Activity Report: Part IV Suspicious Activity Information 

Explanation/Description, CNB0001067. 

277 2/28/01 account statement from City National Bank CNB0000614; 11/30/01 account statement from City 

National Bank, CNB0000655; 11/30/01 account statement from City National Bank, CNB0000659; 5/28/04 City 

National Bank Suspicious Activity Report: Part IV Suspicious Activity Information Explanation/Description, 

CNB0001067 (Sealed Exhibit). 
56 

 Bank records show that numerous checks drawn on Account No. 101-672085 were used 

to pay for high-end retail purchases. For example, the account was used to pay for a $25,000 bill 

from Versace, a $23,000 bill from Dolce & Gabanna, and a $14,000 bill from Gucci, three highend clothiers.278 Sometime in 2003, the bank initiated an evaluation of the account activity and 

determined that it was inconsistent with the profile for an entertainment company.279 At the end 

of 2003, the bank closed all five TNO Entertainment accounts, because of rapidly diminishing 

funds in the accounts, account activity inconsistent with other entertainment accounts handled by 

the bank, and difficulties contacting the accountholder, Mr. Obiang.280 Although City National 

Bank closed the accounts, the bank told the Subcommittee that it did not view them as 

suspicious, and did not place any restrictions on Mr. Obiang’s doing business with the bank in 

the future.281 

 About three months later, on March 2, 2004, Mr. Obiang opened a personal checking 

account at City National Bank, Account No. 009-609326, apparently using an invalid Social 

Security number and an invalid date of birth.282 At account opening, the bank used a database 

known as Chex System to verify the Social Security number without receiving any alert of a 

problem.283 Mr. Obiang apparently did not alert the bank to his PEP status. Mr. Obiang initially 

funded the account with a $300,000 check drawn on a Riggs Bank account, Account No. 

25773624, but the check was returned unpaid.284 On March 15, 2004, Mr. Obiang sent a wire 

transfer for nearly $1 million from his account at CCEI Bank Guinea Equatorial.285 City 

National Bank allowed the transfer without making any inquiries into the source of the funds. 

 A few months earlier, in December 2003, the bank had received a Section 314(b) request 

from Riggs Bank requesting information related to Mr. Obiang.286 The letter clearly disclosed 

Mr. Obiang’s PEP status. In addition, City National Bank had become aware of adverse media 

reports concerning Equatorial Guinea and the Obiang family. In response, a City National Bank 

compliance officer performed a search of the bank records, identified the Obiang checking 

account, and began to review the account activity.287 On June 2, 2004, the compliance officer 

wrote to other bank officials, raising a number of concerns regarding the Obiang account: 

                                                           

278 5/16/01 check from TNO Entertainment to Versace, CNB0001200; 5/18/01 check from TNO Entertainment to 

Dolce & Gabanna, CNB0001201; 8/3/01 check from TNO Entertainment to Gucci, CNB0001229 . 

279 Subcommittee interview of City National Bank officials, March 9, 2009. 280 Id. 281 Id. 282 3/21/04 City National Bank Personal Account Agreement, CNB0001043. Mr. Obiang has been issued a valid 

Social Security Number, apparently in connection with his California corporation. See 12/10/09 letter from Social 

Security Administration to the Subcommittee, no bates number. 

283 Subcommittee interview of City National Bank officials, March 9, 2009. CNB advised the Subcommittee that at 

time of account opening, the banking center manager may not have been aware of policies respective to screening 

and banking PEPs, and that bank policies regarding PEPs were not as strong as they are currently as a result of 

improvements made pursuant to a 2005 Consent Order with the Office of the Comptroller of the Currency (OCC). 284 3/31/04 account statement from City National Bank, CNB0000057. 285 Id. 286 Subcommittee interview of City National Bank officials, March 9, 2009. Section 314(b) of the 2001 Patriot Act 

encourages financial institutions and associations of financial institutions located in the United States to share 

information in order to identify and report activities that may involve terrorist activity or money laundering. 287 Subcommittee interview of City National Bank officials, March 9, 2009. 
57 

“We have identified a number of issues with this client, which should be addressed 

immediately. 

1) Your branch is unable to locate the signature card. Account opened on 3-2-2004. 

2) Public records indicate, the Social Security number used belongs to another individual. 

3) Opening deposit of $300,000.00 was returned unpaid by Riggs Bank (own check). 

4) Discrepancy in date of birth. 

4) Wire transfer for $999,950.00 from Equatorial Guinea, which should have been 

reported as suspicious and unusual. 

5) Internet shows that the client is the Minister of State for Forestry, Fishing, & 

Environment of Equatorial Guinea. It appears, he is related to the President of that 

country, Obiang Nguema Mbasogo. He may qualify as a political exposed person, 

requiring enhanced due diligence. Refer to Legal & Compliance Manual. 

Since the client provided false information, we should close the account.”288

On the same day, June 2, 2004, City National Bank sent a letter notifying Mr. Obiang of 

its intention to terminate its banking relationship with him, asked him to close his account by 

June 8, and instructed him to cease all banking activity with the bank.289 City National Bank 

closed the account on or about June 14, 2004.290 Following the account closure, the bank placed 

Mr. Obiang on its “hot list,” effectively blocking him from banking through City National Bank 

in the future.291 The bank also issued and held two checks with the funds remaining in the 

account totaling $669,691.02.292 

On July 30, 2004, Mr. Obiang called the bank to discuss closure of the account. An 

email by the bank official who spoke with Mr. Obiang described the conversation as follows: 

“In our conversation he asked me why we closed the account. I told him that we were 

provided with the incorrect social security number and that we had tried to reach him on 

many occasions and we were unsuccessful. After I told him that, he said, ‘I thought it was 

due to our country and the oil.’ He then asked me if we could reopen the account if he 

were to come in and provide us with the correct social. I told him that since we were 

unable to get a hold of him, the legal department is now involved.”293

                                                           

288 6/2/04 internal City National Bank email, CNB0004800. 

289 6/2/04 letter from City National Bank to Mr. Obiang, CNB0004101. 

290 11/15/04 City National Bank’s Cross-Complaint, Obiang v. City National Bank, Case No. SC 083177, 

CNB0003931. 

291 Subcommittee interview of City National Bank officials, March 9, 2009. 

292 11/15/04 City National Bank’s Cross-Complaint, Obiang v. City National Bank, Case No. SC 083177, 

CNB0003931. 

293 11/30/04 internal City National Bank email CNB0004799. 
58 

Earlier the same month that this conversation took place, on July 15, 2004, the 

Subcommittee held its hearing and released its report on Riggs Bank’s handling of the Equatorial 

Guinea accounts. The Subcommittee’s report specifically referenced Mr. Obiang’s TNO 

Entertainment accounts at City National Bank.294 The bank learned of the Subcommittee report 

as well as a report issued by the U.S. State Department warning that Equatorial Guinea was 

mishandling its growing oil wealth.295 In addition, on August 19, 2004, the bank received a law 

enforcement subpoena requesting documentation that, among other individuals, related to 

Mr. Obiang.296

In August 2004, Mr. Obiang requested delivery of the $700,000 from his closed 

account.297 In response, City National Bank requested that Mr. Obiang identify the source of the 

funds. Mr. Obiang provided the following declaration: 

“The wire transfer was from one of my companies in Equatorial Guinea. The funds that 

were transferred to me did not come from any illegal source. It was either from Somagui 

Forestal or Sofona.”298

According to documents reviewed by the Subcommittee, City National Bank learned 

from press reports that Obiang accounts at Riggs Bank had been frozen by the U.S. Government 

and believed that law enforcement expected delivery of the remaining funds in the Obiang 

account at its bank, pursuant to the subpoena served on the bank.299 City National Bank 

determined that it should hold onto the funds in expectation of a request from law enforcement. 

Mr. Obiang filed suit in the Superior Court of California, County of Los Angeles, to 

recover the funds.300 He was represented in that matter by attorney Michael Jay Berger. A 

Federal court had previously determined that the U.S. Government had no interest in the 

funds.301 When no other party filed a claim in the suit, the California court ordered the funds 

paid to Mr. Obiang.302 On June 24, 2005, City National Bank issued two checks payable to a 

Berger attorney-client account at Bank of America in the amounts of $500,000 and $199,691.02, 

for a total of $699,691.02.303 Mr. Berger deposited both checks in that account.304

Nagler Attorney-Client and Law Office Accounts. Despite the actions taken by City 

National Bank to close the Obiang checking account in June 2004, bar Mr. Obiang from doing 

business with the bank, and freeze $700,000 of his funds until the June 2005 court decision, 

                                                           

294 2004 Subcommittee Investigation of Riggs Bank at 44, footnote 162. 

295 CNB0003931-32. 

296 11/15/04 City National Bank’s Cross-Complaint, Obiang v. City National Bank, Case No. SC 083177, 

CNB0003931. 

297 Id. 

298 CNB0004068. 

299 Id. 300 6/27/05 Teodoro Nguema Obiang’s Ex Parte Application to Approve Judgment, Obiang v. City National Bank, 

Case No. SC083177, CNB0005558-64, at 61. 

301 Id. 302 Id. 303 7/1/05 internal legal memorandum from City National Bank, CNB0005553. 304 BAC-PSI-02424, 02425. Mr. Berger later transferred these funds to one of the Beautiful Vision accounts as 

explained earlier. 
59 

Mr. Obiang did not object when Mr. Nagler suggested using City National Bank accounts during 

the summer of 2006, to pay Mr. Obiang’s bills and expenses. For the three-month period from 

June to August 2006, Mr. Obiang managed once more, without the bank’s knowledge, to funnel 

money through its accounts, using an account Mr. Nagler had opened years earlier to handle 

client funds, Account No. [xxx-xxxx]27, and an account opened in the name of “Law Offices of 

George I. Nagler,” Account No. [xxx-xxxx]43.305

Mr. Nagler told the Subcommittee that he had maintained an attorney-client account at 

City National Bank “for many years.”306 In 2005, this account began receiving the first of 

several wire transfers from Equatorial Guinea, which Mr. Nagler said were sent by Somagui 

Forestal to pay Mr. Obiang’s legal fees. Mr. Nagler told the Subcomittee that he received nearly 

$40,000 in this manner, citing an October 19, 2005 wire transfer for nearly $12,000; a January 

18, 2006 wire transfer for nearly $12,000; and a March 23, 2006 wire transfer for about 

$14,200.307 

In mid-2006, the Nagler attorney-client account received another influx of Obiang-related 

funds totaling more than $360,000. All of these funds came from U.S. bank accounts, rather 

than directly from Equatorial Guinea. On May 2, 2006, First American Title Company wire 

transferred $107,581.11 from its U.S. account to the Nagler attorney-client account, marked 

“FBO Teodoro Nguema Obiang.”308 City National Bank did not block this wire transfer even 

though, in 2004, it had placed Mr. Obiang on its “hot list” to prevent his doing any more 

business with the bank. 

Mr. Nagler told the Subcommittee that these funds had been left over in the escrow 

account at the title company after Mr. Obiang’s purchase of the Malibu property.309 He said that 

he used $50,000 of the transferred funds to pay Mr. Obiang’s legal fees, sent about $4,400 to the 

IRS to settle a tax matter involving Mr. Obiang, and set aside the rest in a “subaccount” for 

Mr. Obiang.310 

On June 26, 2006, another $213,149.30 was transferred into the Nagler attorney-client 

account from the closed Sweetwater accounts at Cal National Bank.311 On July 27, 2006, First 

American Title Company sent another $47,500 to the Nagler attorney-client account with 

instructions “FBO Teodoro Nguema Obiang.”312 Again, the bank did not block the wire transfer 

even though Mr. Obiang was on the bank’s internal “hot list.” Mr. Nagler told the Subcommittee 

that these funds came from rent that had been paid by the seller for occupying the Malibu 

property after the closing.313

                                                           

305 Various dates, variety of checks from Sweetwater Management, Inc., CNB0001955-57. 306 8/1/08 letter from Mr. Nagler’s legal counsel to the Subcommittee, PSI-Nagler-02-0006. 307 Id., at 08. 308 7/7/08 Transaction Detail Report from First American Title Co., CNB0001651. “FBO” typically means “for the 

benefit of.” Mr. Nagler told the Subcommittee that this transfer occurred on May 5, 2006. 8/1/08 letter from 

Mr. Nagler’s legal counsel to the Subcommittee, PSI-Nagler-02-0008. 

309 8/1/08 letter from Mr. Nagler’s legal counsel to the Subcommittee, PSI-Nagler-02-0008. 310 Id., at 08-09. 311 6/30/06 account statement from City National Bank, CNB00000227; 8/1/08 letter from Mr. Nagler’s legal 

counsel to the Subcommittee, PSI-Nagler-02-0008. 

312 7/7/08 Transaction Detail Report from First American Title Co., CNB0001654. 313 8/1/08 letter from Mr. Nagler’s legal counsel to the Subcommittee, PSI-Nagler-02-0009. 
60 

After receiving these funds, Mr. Nagler transferred at least $27,000 to his law office 

account. On May 6, 2006, for example, Mr. Nagler transferred $15,052.38 from his attorneyclient account into his law office account.314 On June 30, 2006, Mr. Nagler wrote a $12,683.05 

check drawn against his attorney-client account and deposited it into his law office account with 

the notation for “Sweetwater Mgt - payroll.”315 

In addition, he arranged for a payroll company, Paychex Inc., to provide him with checks 

which were imprinted with Sweetwater Management, Inc. at the top and his law office account 

number, No. [xxx-xxxx]43, at the bottom. Beginning on June 30, 2006, Mr. Nagler began using 

those checks “to pay wages due to the employees of Sweetwater Management, Inc. and the 

appropriate payroll tax obligations of the company.”316 Mr. Nagler told the Subcommittee that 

he paid these expenses at the direction of Mr. Obiang.317

The following chart lists the checks that were imprinted with Sweetwater Management, 

Inc., drawn on the Nagler law office account, and paid to Obiang-related employees during June 

30 to July 31, 2006. 

Sweetwater Management Checks Drawn on

Nagler Law Office Account to Sweetwater Employees

Date Check # Amount Bates

6/30/06 11003 $      719.87 CNB0001956

6/30/06 11008 $      983.50 CNB0001956

6/30/06 11004 $   2,360.63 CNB0001957

6/30/06 11006 $      731.06 CNB0001957

6/30/06 11009 $      992.67 CNB0001957

6/30/06 11007 $   2,072.95 CNB0001955

7/14/06 11013 $   1,460.27 CNB0001963

7/14/06 11012 $   2,322.95 CNB0001958

7/14/06 11011 $   2,360.63 CNB0001958

7/14/06 11010 $   1,404.63 CNB0001959

7/31/06 11018 $   1,460.27 CNB0001959

7/31/06 11015 $   2,360.63 CNB0001957

7/31/06 11014 $   1,442.64 CNB0001962

7/31/06 11017 $   2,115.21 CNB0001961

7/31/06 11016 $   2,322.95 CNB0001961

Source‐ City National Bank Total‐ $25,110.86

Prepared by Subcommittee

Mr. Nagler also had checks imprinted with Sweetwater Management, Inc. at the top and 

the number of his attorney-client account, No. [xxx-xxxx]27, at the bottom. In a written 

response to questions from this Subcommittee, Mr. Nagler’s attorney stated that from “June 26, 

2006 through August 23, 2006, Mr. Nagler paid certain of Client’s household and living 

expenses from his trust account, at the Client’s request and with funds provided by the Client for 

                                                           

314 5/30/03 account statement from City National Bank, CNB0000153. 315 6/30/06 check from Mr. Nagler to himself, CNB0002320. 316 8/1/08 letter from Mr. Nagler’s legal counsel to the Subcommittee, PSI-Nagler-02-0004. 317 Id., at 08. 
61 

that purpose.”318 The “Client” referred to is Mr. Obiang. Altogether, his account disbursed more 

than $368,000 in Obiang-related funds.319

During this period, Mr. Obiang relied heavily on Mr. Nagler to pay his bills. In July 

2006, for example, after Mr. Nagler advised Mr. Obiang’s assistant, Melinda Dehaven, that he 

would be out of town for four days,320 Ms. Dehaven sent him the following email:

“Mr. Nguema left me a message and wanted me to ask you if you go out of town on those 

dates who will be available to write checks while you are away. ... [T]here are 

numerous bills that are awaiting his approval along with purchases that he will be making 

upon his arrival and will need to be paid by check. ... [P]lease advise so I can let him 

know.”321

According to Mr. Nagler’s attorney, Mr. Nagler stopped paying Mr. Obiang’s expenses 

on or about August 23, 2006.322 Mr. Berger had already agreed to undertake this task in an 

agreement he had signed the prior month with Mr. Obiang.323 Even after Mr. Nagler stopped 

paying Mr. Obiang’s bills, however, he apparently retained some Obiang-related funds in his 

accounts. An email dated May 10, 2007, for example, sent by Mr. Nagler to Mr. Obiang 

indicates that he was then holding more than $4,000 in Obiang funds in his attorney-client 

account at City National Bank: 

“Mr. Nguema, I note that I am still holding $4,185.10 of your funds in my trust account 

from last August. This amount was intended to cover check #3039 to Raffles 

L’Ermitage...to cover 5 nights at the hotel.”324

Obiang Connection Uncovered. In July 2008, the Subcommittee asked City National 

Bank for records related to Mr. Obiang. In response, the bank conducted a search and learned 

for the first time that Mr. Obiang had used the Nagler attorney-client and law office accounts to 

pay his expenses during the summer of 2006.325 The bank also learned of the checks that 

Mr. Nagler had created. City National Bank told the Subcommittee that it did not view these 

transactions as suspicious, but did deem them to be inconsistent with the purposes of the Nagler 

attorney-client and law office accounts.326 City National Bank told the Subcommittee that it had 

determined not to close the Nagler accounts, but rate them as “high risk” subject to enhanced 

monitoring.327

In 2004, City National Bank’s regulator, the Office of the Comptroller of the Currency 

(OCC), had determined that the bank’s anti-money laundering controls were inadequate. In 

                                                           

318 8/1/08 letter from Mr. Nagler’s legal counsel to the Subcommittee, PSI-Nagler-02-0008. 

319 Id., at 09. 320 7/8/06 email from Mr. Nagler to Ms. DeHaven, SEN010356. 321 7/9/06 email from Ms. DeHaven to Mr. Nagler, SEN010356. 322 8/1/08 letter from Mr. Nagler’s legal counsel to the Subcommittee, PSI-Nagler-02-0009. 323 See 7/17/06 contract between Mr. Berger and Mr. Obiang in which Mr. Berger agreed to assist Unlimited 

Horizon, Inc. in managing Mr. Obiang’s Malibu property and to pay Mr. Obiang’s personal bills upon request, 

SEN000001. 

324 5/10/07 email from Mr. Nagler to Mr. Obiang, SEN004055. 325 Subcommittee staff interview with City National Bank officials, March 9, 2009. 326 Id. 327 Id. 
62 

2005, the OCC entered into a Consent Agreement with the bank to strengthen its AML and other 

compliance programs, including by establishing controls to detect and report potential money 

laundering by immediate family members of senior foreign political figures.328 Despite this 

instruction from its regulators to tighten its controls to detect PEP activities, City National Bank 

did not investigate the EG wire transfers into the Nagler attorney-client and law office accounts, 

even when the wire transfers explicitly named Mr. Obiang; did not detect Mr. Obiang’s use of 

those accounts; and did not take any action against Mr. Nagler, even after discovering how he 

had hidden Mr. Obiang’s utilization of his accounts in 2006. 

 (iii) Pacific Mercantile Bank

At the same time that Mr. Nagler was using his City National Bank attorney-client and 

law office accounts to pay Mr. Obiang’s bills, he was working to help Mr. Obiang open accounts 

at another bank. In July 2006, Mr. Nagler contacted an acquaintance at Pacific Mercantile Bank 

(PMB) in Beverly Hills, California, and urged the bank to open accounts for Mr. Obiang. PMB 

is a small state-charted bank, with less than ten branches in southern California.329 The bank 

agreed to open five accounts in the name of Mr. Obiang and his Sweetwater corporations. For 

the first three months, the accounts were inactive. Then, after an EG wire transfer deposited 

nearly $500,000 into Mr. Obiang’s personal checking account and he disbursed nearly all of the 

funds over the course of the next month, PMB decided it was ill-equipped to oversee such high 

risk transactions and closed the accounts. 

Account Opening. The documents reviewed by the Subcommittee show that, on July 

20, 2006, Mr. Nagler sent an email to an acquaintance who worked as an Executive Vice 

President at the PMB Beverly Hills branch.330 Mr. Nagler stated in the email that he wanted to 

introduce Mr. Obiang to the bank, describing him as the son of the EG President, an EG 

Minister, and someone who wanted to become active in the U.S. entertainment industry. 

Mr. Nagler described Equatorial Guinea as “an ally of the United States and a major supplier of 

oil to this country,” and downplayed the negative reports on the country’s interactions with 

Riggs Bank. He wrote: “I suggest that Mr. Nguema will become a valued customer of the bank 

and someone with whom you will be proud to have a business relationship.”331 

Mr. Nagler also wrote that Mr. Obiang “has formed two entities, a corporation and a 

limited liability company, to hold and manage his residence here and would like to establish one 

or more bank accounts for these entities. ... Currently, I am the sole signing officer on his funds 

and have been paying bills out of my trust account.”332 

According to Mr. Nagler, on or about September 15, 2006, he accompanied Mr. Obiang 

to the bank and introduced him to the PMB Executive Vice President.333 That same day, 

                                                           

328 See Office of Comptroller of the Currency, Consent Order # 2005-16, In the Matter of City National Bank, 

http://www.occ.treas.gov/ftp/eas/EA2005-16.pdf; Subcommittee staff interview with City National Bank officials, 

March 9, 2009. 

329 See PMB press release, November 12, 2009, on its website, www.pmbank.com. 330 7/20/06 email from Mr. Nagler to PMB, PSI-Pacific_Mercantile_Bank-01-0114-15. 331 Id., at 0115. 332 Id. 333 8/1/08 letter from Mr. Nagler’s legal counsel to the Subcommittee, PSI-Nagler-02-0005. 
63 

Mr. Obiang completed paperwork to open five accounts for himself and his companies.334 

Account No. 3109386 was a personal checking account in his name, and was opened with an 

initial cash deposit of $3,000.335 According to PMB, this was the only account of the five that 

was actually funded.336 

Account No. 3401130 was a personal savings account in Mr. Obiang’s name.337 On the 

account opening form, he indicated that he would be making an initial deposit of $500,000, but 

this deposit was not actually made.338 Account No. 3109378 was opened in the name of 

Sweetwater Malibu, LLC,339 with the account opening documentation identifying Mr. Obiang as 

the company’s sole owner and manager.340 Account No. 3109360 was opened in the name of 

Sweetwater Management, Inc.,341 with the account opening documentation identifying 

Mr. Obiang as the company president,342 chief executive officer, director,343 and sole owner.344 

According to PMB, despite the completed paperwork, neither of these corporate accounts was 

ever funded. Mr. Obiang also completed a form to purchase a Certificate of Deposit (CD) at the 

bank to be funded with a $1 million wire transfer.345 Again, however, according to PMB, this 

CD was never actually purchased. 

Mr. Obiang provided slightly different information on the various account opening forms. 

In one, he described his “Employer” as: “Self[;] Minister of Agriculture/Forestry.”346 In others, 

he described himself as an “Investor” or “Self Employed.”347 He gave the Malibu residence as 

his home address.348 He also provided a copy of a U.S. social security card in his name.349

                                                           

334 9/15/06 PMB account opening documentation, SEN008935-9021. See also handwritten notations regarding these 

accounts, PSI-Pacific_Mercantile_Bank-01-0201; 9/15/06 email from Mr. Nagler to PMB regarding accounts, PSIPacific_Mercantile_Bank-01-0220. 

335 9/15/06 PMB cash receipt, PSI-Pacific_Mercantile_Bank-01-0016. 336 Subcommittee interview of Pacific Mercantile Bank officials, November 16, 2009. 337 9/15/06 PMB form, PSI-Pacific_Mercantile_Bank-01-0196-98; Subcommittee interview of Pacific Mercantile 

Bank officials, Nov. 16, 2009. 

338 9/15/06 PMB account opening form, SEN008956; Subcommittee interview of Pacific Mercantile Bank officials, 

Nov. 16, 2009. 

339 9/15/06 PMB account opening documentation, PSI-Pacific_Mercantile_Bank-01-0256-75. 340 9/15/06 PMB account opening documentation, PSI-Pacific_Mercantile_Bank-01-0259-60, 262-63, 281, 290; 

9/15/06 Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, Substitute Form W8BEN, PSI-Pacific_Mercantile_Bank-01-0223. 

341 9/15/06 PMB account opening documentation, PSI-Pacific_Mercantile_Bank-01-0210-219. 342 Id., at 213, 222, 232-33, and 242. 343 Id., at 217. 344 Id., at 221. See also 9/15/06 Certificate of Foreign Status of Beneficial Owner for United States Tax 

Withholding, Substitute Form W-8BEN, PSI-Pacific_Mercantile_Bank-01-0223. 

345 See 9/15/06 PMB form to purchase a CD, PSI-Pacific_Mercantile_Bank-01-0184; 9/18/06 PMB Certificate of 

Deposit Receipt, PSI-Pacific_Mercantile_Bank-01-0188. Despite these documents, PMB told the Subcommittee 

that the $1 million wire transfer never arrived, and the CD was never actually purchased. Subcommittee interview 

of Pacific Mercantile Bank officials, November 17, 2009. See also 8/1/08 letter from Mr. Nagler’s legal counsel to 

the Subcommittee, PSI-Nagler-02-0005. 

346 9/15/06 PMB Individual Account Holder form, PSI-Pacific_Mercantile_Bank-01-0194-95. See also PMB 

Individual Account Holder form, PSI-Pacific_Mercantile_Bank-01-0280. 

347 PMB new account forms, See PSI-Pacific_Mercantile_Bank-01-0184, 198, 210. 348 See, e.g., 9/15/06 PMB Individual Account Holder form, PSI-Pacific_Mercantile_Bank-01-0194. 

349 See copy of social security card, PSI-Pacific_Mercantile_Bank-01-0203 (Sealed Exhibit). This social security 

number was assigned to Mr. Obiang by the Social Security Administration, apparently in connection with his 
64 

In addition, Mr. Obiang provided the following memorandum bearing his signature to 

Pacific Mercantile Bank: 

“If Teodoro Nguema Obiang is out of the country and needs to conduct an internal 

transfer via phone, it is acceptable between personal and business accounts, and vice 

versa. ... This internal transfer from business to personal is approved by [the PMB 

Executive Vice President].”350

This document established a clear link between the Obiang personal and corporate accounts. 

Due Diligence Review. Within a few days after opening the five accounts, PMB 

initiated a due diligence review of Mr. Obiang. On July 21, 2006, the PMB Vice President sent 

an email to his colleagues: “This is a prospect who really we need to check his background with 

regard to all regulatory compliances including OFAC and Bank Secrecy Act/MLA. ... Pat, I 

would suggest that you check his background thoroughly through all means available and then 

we can decide if the risk is warranted to have him as a client.”351 On July 25, 2006, his colleague 

responded: 

“I can relay that the country is not on any government AML watch-list, including the 

FATF. The individual is not an SDN on OFAC and has no derogatory information in 

Lexis Nexis. Our main challenge is the BSA [Bank Secrecy Act] monitoring, especially 

as it relates to an attorney representing a PEP (Professional Front Scheme is a common 

AML scheme and one the regulators will be right on top of when they monitor our 

accounts). So it becomes a business risk decision, and keeping in mind that we have a 

BSA Officer (in contrast to a dept that larger banks have to monitor).”352

Three weeks later, on September 18, 2006, PMB’s outside vendor, E-Funds, which 

performed “verification checks” for prospective clients reported that Mr. Obiang was a 

government official in Equatorial Guinea and a Politically Exposed Person (PEP), but also 

incorrectly stated that he was a U.S. citizen.353 PMB told the Subcommittee that it found “no 

derogatory information in Lexis Nexis” about Mr. Obiang, even though in 2004, the 

Subcommittee had issued a widely-publicized report and held hearings which raised questions 

about him.354 In addition, because Equatorial Guinea was not on any government AML watchlist, PMB decided to rank it as a “low risk” country.355 

After collecting the due diligence information, PMB used an internal risk scoring model 

which determined that Mr. Obiang was a high-risk client.356 Under PMB’s individual scoring 

model, 0 to 5 points was a low risk client; 6 to 9 points was a moderate risk client; and 10 or 

                                                                                                                                                                                               

California corporation. 12/10/09 letter from the Social Security Administration to the Subcommittee, no bates 

number. 

350 9/15/06 memorandum from Mr. Obiang to PMB, SEN008995. 351 7/21/06 internal PMB email, PSI-Pacific_Mercantile_Bank-01-0114. 352 7/25/06 internal PMB email, PSI-Pacific_Mercantile_Bank-01-0114. 353 E-Funds ID Verification Results for Teodoro N Obiang, PSI-Pacific_Mercantile_Bank-01-0179-81. 354 Subcommittee interview of Pacific Mercantile Bank officials, November 16, 2009. 355 See, e.g., PMB Individual Scoring Model, PSI-Pacific_Mercantile_Bank-01-0094 (Sealed Exhibit). 356 PMB Individual Scoring Model, PSI-Pacific_Mercantile_Bank-01-0092-95 (Sealed Exhibit). 
65 

more points was a high risk client requiring “enhanced due diligence.”357 The model 

automatically assigned a score of 15 to any PEP client.358 PMB documents indicate that its 

personnel performed two risk ratings of Mr. Obiang, scoring him at 25 and 34, with his elevated 

scores due primarily to his PEP status.359 PMB also told the Subcommittee that Mr. Obiang was 

the bank’s first and only PEP client. According to PMB, while it concluded in 2006 that it could 

open an account for Mr. Obiang with enhanced AML monitoring, it said that, under its current 

policy, it would no longer open an account for him due the difficulty associated with monitoring 

PEP accounts.360

On September 19, 2006, PMB sent a letter to Mr. Obiang stating: “Thank you for 

choosing Pacific Mercantile Bank and the opportunity to serve you.” It confirmed the opening of 

his accounts and assigned him a “personal banker.”361 A copy of the letter was sent to 

Mr. Nagler. 

For the first three months they were open, the accounts were apparently unused. Then on 

December 14, 2006, Mr. Obiang’s personal checking account received a wire transfer for nearly 

$500,000 from Somagui Forestal in Equatorial Guinea.362 Over the next month, Mr. Obiang 

wrote eight checks for various purposes, including one to pay for more than $253,000 in 

California property taxes. Those disbursements, which exceeded $446,000, consumed nearly all 

the available funds in the account. The eight checks were as follows. 

Transactions Involving Obiang Account at PMB

December 2006‐January 2007

Date Transaction Amount Source or Recipient Bates

12/14/06 Wire deposit $ 499,943.53 “Somagui Forestal” PSI‐Pacific_Mercantile_Bank‐01‐0020

12/18/06 Check No. 1001 $     5,400.00 “Las Vegas Golf & Tennis” PSI‐Pacific_Mercantile_Bank‐01‐0023

12/19/06 Check No. 1002 $     2,174.00 “DMV” for “Porsche” PSI‐Pacific_Mercantile_Bank‐01‐0025

12/20/06 Check No. 1007 $   22,289.00 “Dolce & Gabana” PSI‐Pacific_Mercantile_Bank‐01‐0027

12/21/06 Check No. 1008 $   54,720.00 “Saurman Inv. SC” PSI‐Pacific_Mercantile_Bank‐01‐0029

12/21/06 Check No. 1009 $   51,903.14 “Starlink Tours” PSI‐Pacific_Mercantile_Bank‐01‐0031

12/21/06 Check No. 1010 $   50,000.00 “Washington Mutual”363 PSI‐Pacific_Mercantile_Bank‐01‐0087, 0088

12/21/06 Check No. 1011 $ 253,204.46 “LA County Tax Collector”

for “Tax‐property 07”

PSI‐Pacific_Mercantile_Bank‐01‐0033

1/04/07 Check No. 1012 $   56,544.00 “Saurman Inv.Svc” PSI‐Pacific_Mercantile_Bank‐02‐0001

Source:  

Pacific Mercantile Bank

$499,943.53 – Total Deposits

$496,234.60 – Total Disbursements

Prepared by Subcommittee

PMB told the Subcommittee that the $500,000 wire transfer in mid-December triggered a 

review of the account.364 In addition, other documentation indicates that Washington Mutual 

                                                           

357 Id., at 93. 358 Id. 

359 Id., at 92, 95 (Sealed Exhibit). 360 Subcommittee interview of Pacific Mercantile Bank officials, November 17, 2009. 361 9/19/06 letter from PMB to Mr. Obiang, PSI-Pacific_Mercantile_Bank-01-0089. 362 12/14/06 PMB Wire Original Information Report, PSI-Pacific_Mercantile_Bank-01-0020-21. 363 This check apparently was not cashed. An internal PMB email indicated that the check was intended to pay a 

Washington Mutual credit card bill, but Washington Mutual told PMB that the credit card limit was lower. See PSIPacific_Mercantile_Bank-01-0087-88. 
66 

contacted PMB to inquire about the authenticity of a $50,000 check drawn on the Obiang 

checking account, which further directed the bank’s attention to the account activity.365 On 

February 8, 2007, PMB closed Mr. Obiang’s checking account and issued a cashier’s check to 

him for the remaining balance of $56,693.93.366 PMB told the Subcommittee that it closed the 

account, because as a small bank, monitoring the account of a known PEP was too 

burdensome.367 According to PMB, it also viewed at least some of the account activity as 

suspicious. 

(c) Obtaining Insurance for Obiang Assets 

 In addition to incorporating shell companies, paying his bills, and helping Mr. Obiang 

open U.S. bank accounts, Mr. Nagler worked with Paul Finestone of Finestone Insurance 

Agency to obtain insurance for Mr. Obiang’s Malibu residence and a fleet of 32 vehicles.368 

After several U.S. insurance companies declined to provide either homeowners or automobile 

insurance to Mr. Obiang, at Mr. Nagler’s request, Mr. Finestone undertook an extensive effort to 

secure insurance for Mr. Obiang’s U.S. assets, including by contacting numerous companies, 

defending Mr. Obiang’s reputation, considering leasing arrangements, and utilizing renters and 

temporary insurance. 

Homeowners Insurance for Malibu Property. In 2006, Mr. Nagler asked 

Mr. Finestone to obtain homeowners insurance for Mr. Obiang’s newly purchased residence at 

3620 Sweetwater, Malibu, California. Initially, Mr. Finestone sought to transfer the coverage 

maintained by the previous homeowner.369 Mr. Finestone told Mr. Nagler in an email that given 

the carrier’s history of coverage of the residence, the transfer should be “very easily 

accomplished” “[a]s long as your client is not ‘notorious.’”370 The existing carrier did not, 

however, agree to transfer coverage, and in May 2006, Mr. Finestone began contacting other 

insurance companies.371 On June 2, 2006, Mr. Finestone notified Mr. Nagler that American 

International Group, Inc. (AIG) had decided to withdraw an offer after learning more about 

Mr. Obiang. 372 

“We have very bad news indeed. We have this instant received a fax from the AIG 

underwriters representative who advises that they have reviewed web sites concerning 

Teodoro Obiang and that they are withdrawing the written quotations submitted to us for 

you on all of the coverage for the estate.”373

                                                                                                                                                                                                364 Subcommittee interview of Pacific Mercantile Bank officials, November 17, 2009. 365 See 1/11/07 internal PMB email, PSI-Pacific_Mercantile_Bank-01-0087; 1/11/07 review of checking account 

activity, PSI-Pacific_Mercantile_Bank-01-0090. See also 2/5/07 review of checking account, PSIPacific_Mercantile_Bank-01-0096. 

366 2/8/07 check from PMB to Mr. Obiang, PSI-Pacific_Mercantile_Bank-01-0038. 367 Subcommittee interview of Pacific Mercantile Bank officials, November 17, 2009. 368 12/12/06 email from Mr. Nagler to Ms. Everett, SEN013561; 6/14/06 email from Mr. Finestone to Ms. DeHaven 

and Mr. Nagler, SEN010929; 6/14/06 email from Mr. Finestone to Mr. Nagler and Ms. DeHaven, SEN010919. 

369 5/5/05 email from Mr. Finestone to Mr. Nagler, SEN011296. 370 Id. 371 5/24/06 email from Mr. Finestone to Mr. Nagler, SEN011148. 372 6/2/06 email from Mr. Finestone to Mr. Nagler, SEN011137. 373 Id. 
67 

Another insurance company submitted five questions to Mr. Finestone seeking additional 

information about Mr. Obiang, including his occupation and need for armed security guards at 

the Malibu residence.374 Mr. Finestone responded that Mr. Obiang was “independently 

wealthy,” an “investor and collector,” and required armed security because of the threat of 

kidnapping and ransom inherent with his wealth.375 Additionally, Mr. Finestone noted that 

Equatorial Guinea “is a major supplier of oil to America and a critical interest of American 

energy needs;” and stated that “the father [President Obiang] is no better and no worse than the 

Saudi Royal family. ... We insure billions and billions of dollars of Saudi property bought with 

our oil money here in America and AIG has no problem handling a great deal of that business.” 

 On June 9, 2006, Mr. Finestone advised Mr. Nagler that Homeland Insurance had offered 

to provide one year of homeowners coverage for about $85,000.376 In his email to Mr. Nagler, 

Mr. Finestone wrote: “WE ARE CERTAIN THAT THE INSURER KNOWS WHO THEY 

ARE INSURING.”377 On June 14, 2009, Mr. Nagler advised Mr. Obiang to accept the coverage, 

because it was the only policy available.378 

Mr. Nagler provided Mr. Obiang with a “Homeowner’s Summary” from Mr. Finestone 

showing that he had contacted eleven insurance agencies and only one had agreed to provide 

insurance on the Malibu property.379 The summary prepared by Mr. Finestone showed that two 

major insurers, Chubb Insurance and AIG Private Client, had declined to provide the 

homeowners insurance, because “client profile too high” and “will not write due to political 

exposure.”380 Although others cited brush fire dangers and a high property value as reasons for 

the declination, Mr. Finestone noted in his summary that “clearly politics is part of the placement 

process on this property.”381 Mr. Finestone characterized one insurer’s decision, presumably that 

of Homeland Insurance, to provide property damage but not liability insurance, in the following 

email to Mr. Nagler: 

“We had a single market prepared to accept coverage on the homeowners and they 

refused liability coverage given whom the client is and their perceived exposure to 

political risk and ‘social’ risk.”382

He also wrote that “Farmers Insurance does not fully appreciate whom their client is at this time 

and we hesitate to trip them into a detailed review given the current automobile savings.”383 

Mr. Finestone was negotiating with Farmers at the time to provide both homeowners and 

automobile insurance to Mr. Obiang.384 

 Approximately one year later, in August 2007, it appears that, although Homeland 

Insurance had provided property damage coverage, property liability insurance had still not been 

                                                           

374 6/7/06 email from Mr. Finestone to Mr. Nagler, SEN011068. 375 Id at 11069. 376 Id. 377 6/9/06 email from Mr. Finestone to Mr. Nagler, SEN011045. 378 6/14/06 email from Mr. Nagler to Mr. Obiang, SEN010918. 

379 6/14/06 email from Mr. Finestone to Mr. Nagler and Ms. DeHaven, SEN010919. 380 Id. 381 Id. 382 4/29/07 email from Mr. Finestone to Mr. Nagler, SEN008867-69. 383 6/14/06 email from Mr. Finestone to Mr. Nagler and Ms. DeHaven, SEN010919. 384 7/26/06 email from Mr. Finestone to Ms. DeHaven and Mr. Nagler, SEN010296, 010300-301. 
68 

obtained.385 In an email to Mr. Obiang, Mr. Nagler recommended that he create the impression 

he was leasing the Malibu property to justify rental insurance that would provide added liability 

protection: 

“[Y]ou should have a lease prepared between the limited liability company that owns 

your Sweetwater home and you individually showing that you are leasing the house from 

the company. This will support the so called renters policy that provides liability 

protection for your protection.”386

This email suggests that Mr. Nagler, a licensed attorney, was advising his client to create a 

fictitious lease between himself and Sweetwater Malibu, LLC to “support” a renters insurance 

policy for the Malibu residence when, in fact, Mr. Obiang was the beneficial owner of that 

company and thus would be leasing the house from himself. 

Automobile Insurance. Mr. Nagler and Mr. Finestone also worked together to obtain 

insurance for Mr. Obiang’s fleet of 32 motorcycles and automobiles. 

On June 12, 2006, Mr. Finestone notified Mr. Nagler that Mr. Obiang’s lack of a valid 

California driver’s license was prohibitive to obtaining reasonably priced motorcycle 

insurance.387 Apart from recommending that Mr. Obiang obtain a California license, he 

proposed two alternatives to secure the necessary insurance. First, he proposed that Mr. Obiang 

lease the motorcycles to Mr. Nagler for $1 per year to be lent back to Mr. Obiang.388 Second, he 

proposed acquiring insurance for the entire fleet of vehicles, using licensed drivers in addition to 

Mr. Obiang.389 Mr. Finestone wrote: 

“[I]f there were a couple of relatively clean drivers with CA information that the 

underwriters could verify on the drivers list which forms part of the application, it makes 

it easier for them to reasonably accept a foreign non California licensed driver as the 

primary driver. We continue to look for every possibility to best secure and put to bed all 

of the various problems for Mr. Obiang”390 

The two alternatives suggested by Mr. Finestone involve creating either a fictitious lease or the 

misimpression that other California drivers would be using the vehicles owned by Mr. Obiang. 

In July 2006, automobile insurance for all of Mr. Obiang’s vehicles was still unresolved. 

It appears that Mr. Obiang was receiving temporary coverage for at least some vehicles through 

State Farm using a 15-day grace period on pending applications for insurance.391 However, on 

July 24, State Farm advised Mr. Finestone that the temporary coverage would expire on July 

26.392 To keep Mr. Obiang covered for an additional 15 days, it appears that Mr. Finestone used 

                                                           

385 8/11/07 email from Mr. Nagler to Mr. Obiang, SEN004091. 386 Id. 387 6/12/06 email from Mr. Finestone to Ms. DeHaven and Mr. Nagler, SEN010987. 388 Id. 

389 6/14/06 email from Mr. Finestone to Ms. DeHaven and Mr. Nagler, SEN010929-32, 34. 

390 Id. Mr. Finestone also provided Mr. Nagler with a sample letter from the Government of Equatorial Guinea to 

certify that Mr. Obiang had a clean driving record in that country. 6/13/06 email from Mr. Finestone to Ms. 

DeHaven and Mr. Nagler, SEN010960-61. 

391 7/26/06 email from Mr. Finestone to Ms. DeHaven and Mr. Nagler, SEN010300. 392 7/25/06 email from Ms. DeHaven to Mr. Finestone, SEN010306. 
69 

his friendship with a State Farm employee to renew the pending applications, as explained in this 

email he sent to Mr. Nagler. 

“We are going to get another 15 days by collapsing the current applications. ... My 

friend will then re enter all of the data for a second new application in return for an 

outrageously expensive sushi dinner at his favorite place. ... I think I can only do this 

once (depending on his appetite for a sushi fix and the risk of doing this if his superiors 

observe the action – they would not approve). ...[T]hat gives us another 15 days from 

today to get this done.”393

Mr. Finestone openly advised Mr. Nagler of this deceptive scheme to obtain a continuance of 

automobile insurance for Mr. Obiang in violation of State Farm policy. 

Billing records obtained by the Subcommittee indicate that Mr. Obiang was able to obtain 

automobile and motorcycle insurance for the year 2007 to 2008, from Hagerty Insurance, Essex 

Insurance, and Progressive Insurance, at a cost of more than $274,000. These policies appear to 

have ensured 32 motorcycles and automobiles, including seven Ferraris, five Bentleys, four Rolls 

Royces, two Lamborghinis, two Maybachs, two Mercedes, two Porches, one Aston-Martin, and 

one Bugatti, with a collective insured value of $9.5 million.394 

(d) Awareness of the Suspect Origins of Obiang Funds 

During the two years that Mr. Nagler worked for Mr. Obiang, he was well aware of 

Mr. Obiang’s background and the suspect origins of his funds. On August 11, 2005, 

approximately one month before Mr. Nagler began working for Mr. Obiang, Rosalina Roma, an 

Obiang assistant, informed Mr. Nagler in an email that his future client “is Teodoro Nguema 

Obiang from Equatorial Guinea, his father is the president of this country.”395 In July 2006, 

Mr. Nagler sent a previously-cited email to Pacific Mercantile Bank defending Mr. Obiang’s 

reputation and noting that, “Neither Mr Nguema nor his father has ever been convicted or even 

charged with violating US law.”396 Throughout 2006, in connection with his work to obtain 

home and automobile insurance for Mr. Obiang, Mr. Nagler was exposed to insurance company 

concerns about Mr. Obiang’s reputation and source of funds. 

 In late 2006, Mr. Nagler asked the public relations firm Winner & Associates to propose 

a strategic communications plan for Mr. Obiang. On November 21, 2006, Winner & Associates 

sent Mr. Nagler a proposal which stated in part: 

“[W]e understand that Mr. Nguema desires to communicate on a range of issues 

including the progress being made by Equatorial Guinea. Several of the issues that have 

helped bring about that progress involve positive developmental programs that are 

unknown or misunderstood by certain non-governmental organizations which have been 

communicating negatively about Mr. Nguema and the government of Equatorial Guinea. 

... [W]e believe that our services in the areas of crisis communication, media relations, 

                                                           

393 7/26/06 email from Mr. Finestone to Ms. DeHaven and Mr. Nagler, SEB010297. 

394 9/17/07 policy statement from Hagerty Insurance, SEN000213 to SEN000221; 10/15/07 invoice from Finestone 

Insurance Agency, SEN000222; 6/21/07 invoice from Finestone Insurance Agency, SEN000293. 

395 8/11/05 email from Ms. Romo to Mr. Nagler, SEN005794. 

396 7/20/06 email from Mr. Nagler to PMB, PSI-Pacific_Mercantile_Bank-01-0114-15. 
70 

third-party advocacy, and strategic positioning can assist in communicating positive 

information about Mr. Nguema, his government, and his country, while at the same time 

curtailing what has become a tide of misinformation put into a negative context by 

Mr. Nguema’s adversaries. ... The negative communications we are monitoring seem to 

be more frequent and the sooner we can intervene, the better.”397 

Approximately one month later on January 19, 2007, Winner & Associates emailed 

Mr. Nagler an article entitled, “Malibu Bad Neighbor; A Dictator in Training Buys His Way in 

as Politically Active Superstars Stay Mum.”398 The next month, on February 6, 2007, apparently 

without an agreement to provide services, Winner & Associates sent Mr. Nagler an article 

entitled, “Dictator’s Son Moves in; Time for Malibu to Speak Out,” and warned: “Dear George, 

The communications context for your client appears to be going further downhill. There will be 

a point beyond which we will be unable to help.”399

On another occasion in June 2006, when Mr. Obiang had instructed his staff to secure 

space for a private jet he had just purchased,400 the owner of an airplane hangar who was an 

acquaintance of Mr. Nagler sent him the following email: 

“I got the feeling when I did not get the material that he was not interested in disclosing 

his client’s [Mr. Obiang’s] background. I don’t feel comfortable in being responsible for 

someone I have no idea who he is and on top of that, one who has diplomatic 

credentials.”401

Mr. Nagler responded with a recommendation for Mr. Obiang in which he listed four 

professional references, two associated with his luxury car collection, one associated with his 

private jet, and Neil Baddin, a Coldwell Banker realtor who helped arrange Mr. Obiang’s 

purchase of his Malibu property.402 Mr. Nagler also disclosed that Mr. Obiang was the EG 

Minister of Agriculture and Forests, requested that information be kept confidential, and asked 

the hangar owner to call him directly to discuss his concerns.403 

Two months later, on August 14, 2007, an Obiang employee, Ms. Romo, sent an email to 

Mr. Berger stating that Mr. Obiang had terminated his relationship with Mr. Nagler.404 

Mr. Nagler told the Subcommittee that his employment by Mr. Obiang ended in September 

2007. 

(3) Analysis 

The Obiang case history demonstrates how a determined PEP can employ the services of 

U.S. attorneys to bring millions of dollars in suspect funds into the United States through U.S. 

                                                           

397 11/21/06 email from Winner & Associates to Mr. Nagler, SEN008925. 

398 1/19/07 email from Winner & Associates to Mr. Nagler, SEN008895. 

399 2/6/07 email from Winner & Associates to Mr. Nagler, SEN008880. 400 6/7/06 fax from Mr. Nagler to airport hanger contact, SEN011075. 401 6/7/06 email to Ms. DeHaven, SEN011096. 402 6/7/06 fax from Mr. Nagler to airport hanger contact, SEN011075. 403 Id. 404 8/14/07 email from Ms. Romo to Mr. Berger, SEN000589. Throughout the email, Ms. Romo referred to a 

“Mr. Smith,” seemingly in place of Mr. Obiang’s name. This practice has been noted in other messages as well. 

See, e.g, SEN011704-05; SEN010918; SEN005767; SEN004091. 
71 

financial institutions. Mr. Berger and Mr. Nagler helped Mr. Obiang utilize accounts at six 

different U.S. banks, both large and small, from 2004 to 2008. Most of these accounts were not 

opened in Mr. Obiang’s name, but were set up for him to use without alerting the host bank and 

often without triggering the bank’s AML and PEP controls for months or sometimes years. The 

tactics used in this case history expose a variety of AML and PEP deficiencies at U.S. banks that 

ought to be strengthened. 

Union Bank of California, for example, had designated Equatorial Guinea as a high-risk 

country in 2004, and identified and closed an Obiang employee account and a shell company 

account receiving EG funds. The bank did not know for three years, until 2007, that Mr. Obiang 

was still using the bank’s services by utilizing two U.S. shell company accounts for Unlimited 

Horizon as well as Mr. Berger’s law office account at the bank. Mr. Berger opened each of those 

accounts, but did not disclose that Mr. Obiang was the beneficial owner of Unlimited Horizon or 

that the law office account would be conducting transactions on Mr. Obiang’s behalf. In 2006, 

UBOC’s routine monitoring systems flagged high-dollar EG wires that had begun to be sent to 

the Berger law office account. But UBOC personnel took six months to initiate a review of those 

wire transfers, ironically because its AML personnel were negotiating a deferred prosecution 

agreement with the U.S. Justice Department over its inadequate AML program. When the AML 

department finally reviewed the EG wire transfers, UBOC immediately uncovered Mr. Obiang’s 

use of the shell company and law office accounts, and immediately closed them. The key AML 

deficiencies that allowed Mr. Obiang to take advantage of UBOC were the absence of beneficial 

ownership information for Unlimited Horizon and the bank’s failure to promptly review the data 

it had collected on high risk wire transfers. 

Bank of America also opened accounts for a U.S. shell company, Beautiful Vision, at the 

request of Mr. Berger, a longstanding customer of the bank. Mr. Berger did not disclose that 

Mr. Obiang was the beneficial owner of the company or explain why Mr. Obiang was the sole 

signatory on one of the Beautiful Vision accounts. From 2004 to 2005, Mr. Obiang made open 

use of one of the Beautiful Vision accounts by signing numerous, high-dollar checks that 

together exceeded $7.6 million in less than a year, but Bank of America did not conduct a due 

diligence review of him, did not learn of his PEP status, and did not review the account activity, 

even after Mr. Obiang used Beautiful Vision account funds to purchase a $3.3 million cashier’s 

check and cashed it in Equatorial Guinea. In 2005, a flurry of wire transfers involving a newlyopened Beautiful Vision account did trigger a review, and Bank of America quickly discovered 

Mr. Obiang’s connection to the company, and closed its accounts. However, the bank took no 

action against the Berger accounts, even though he had opened the Beautiful Vision accounts in 

the first place and hidden Mr. Obiang’s involvement. Over the next year, Mr. Obiang sent a 

number of high-dollar EG wire transfers to Mr. Berger’s attorney-client account at Bank of 

America, most of which Mr. Berger transferred within days to other Obiang-related accounts, but 

the bank did not review the account activity. It was only in 2007, that Bank of America 

conducted a review, quickly discovered Mr. Obiang’s use of the account, and closed it. The 

AML deficiencies here include the failure to review high-risk wire transfers sent to an attorneyclient account; the failure to take action against an attorney who violated bank policy by hiding 

the beneficial owner behind a shell company account; the failure to examine shell company 

accounts with multi-million-dollar account activity; and the failure to perform a due diligence of 

all account signatories. 
72 

Like UBOC and Bank of America, Citibank also opened a U.S. shell company account at 

the request of Mr. Berger, but before doing so, conducted a much more detailed due diligence 

review of Unlimited Horizon. Citibank asked, for example, for information about the company’s 

beneficial owners, inquired about any PEP involvement, and physically visited the business 

address of the company. Its oversight efforts, however, were frustrated by Mr. Berger’s 

willingness to provide deceptive information about the company. Mr. Berger was also careful to 

ensure that no high-dollar EG wire transfers were sent to the Unlimited Horizon account at 

Citibank that might trigger a bank review, instead providing funding through checks drawn on 

his attorney-client account at Bank of America. Despite these precautions, Citibank’s 

monitoring of the account activity led the bank to question the transactions taking place, and it 

closed the account ten months after it opened. Despite its reasonable AML efforts, Citibank was 

taken advantage of by Mr. Obiang and Mr. Berger. The key problem was Citibank’s inability to 

identify the true owner of Unlimited Horizon, a problem that would have been less difficult if 

U.S. shell companies were required to identify their beneficial owners, under oath, to the State 

where the company was formed. That type of incorporation requirement might also have led 

Mr. Berger to provide accurate beneficial ownership information for the company to protect his 

law license. 

Cal National Bank opened accounts for still another set of U.S. shell companies 

associated with Mr. Obiang, Sweetwater Malibu and Sweetwater Management. Unlike Citibank, 

however, Cal National Bank knowingly allowed a property manager, who was a long-time 

customer of the bank, to open these accounts without disclosing the beneficial owners of the 

companies. Due to a fortunate series of events, within one month, Cal National Bank discovered 

Mr. Obiang’s connection to the companies and, in light of the bank’s policy against opening 

accounts for PEPs, immediately closed them. It also placed Mr. Obiang on a “hot list” to prevent 

him from using bank services in the future. The bank took no action, however, against the 

property manager, even though he was the one who hid Mr. Obiang’s involvement from the bank 

and violated its no-PEP policy. The key AML deficiencies exposed here include the bank’s 

willingness to allow a longstanding customer to skip a basic disclosure requirement and then, 

after discovering the customer took advantage of the bank, to continue to do business with him. 

City National Bank had the longest history with Mr. Obiang of the six banks examined in 

this case history. From 2001 to 2003, the bank allowed Mr. Obiang to open five accounts for his 

California company, TNO Entertainment, without learning of his PEP status. In 2004, the bank 

allowed Mr. Obiang to open a personal checking account, again without learning of his PEP 

status. When a $1 million EG wire transfer triggered a review of the account two months later, 

the bank learned for the first time that Mr. Obiang was an EG official, the son of the EG 

President, and the subject of corruption allegations. The bank immediately closed the account 

and put Mr. Obiang on a “hot list” to block his doing business with the bank. Despite this action, 

during the summer of 2006, Mr. Nagler printed checks with Sweetwater Management, Inc. at the 

top and the account number of his attorney-client or law office account at the bottom and used 

them to pay Obiang bills and expenses. In 2008, Mr. Obiang sent an EG wire transfer to still 

another third party account at City National Bank and then withdrew the funds at ATM machines 

and casinos in the United States. 

City National Bank’s experiences with Mr. Obiang expose a variety of tactics that can be 

used to access U.S. bank accounts, even after a PEP is explicitly barred from a bank. Key AML 
73 

and PEP deficiencies include the bank’s poor due diligence efforts that failed to uncover 

Mr. Obiang’s PEP status from 2001 until 2004; and Mr. Nagler’s use of his attorney-client and 

law office accounts as checking accounts for Mr. Obiang’s shell companies. In addition, after 

learning of the checks that Mr. Nagler created, the bank chose not to close the Nagler accounts, 

but simply designate them as “high risk” warranting enhanced monitoring. That decision, like 

that of Cal National Bank regarding the property manager, demonstrates the banks’ reluctance to 

end relationships with longstanding customers, even when they are discovered to be facilitating a 

PEP’s use of bank services without informing the bank. A final problem is City National Bank’s 

failure to detect and block high risk wire transfers before they deliver funds to an account, 

including the $1 million EG wire transfer in 2006, the $40,000 in EG wire transfers sent to the 

Nagler attorney-client account, and the $30,000 in EG wire transfers to the third party account in 

2008. City National Bank had added Mr. Obiang’s to its internal “hot list” to block his use of 

bank services, but its interdiction software failed to block wire transfers bearing his name or to 

flag wire transfers from Equatorial Guinea for further inspection. 

Pacific Mercantile Bank is the only one of the six banks that opened an account in the 

name of Mr. Obiang, while knowing of his PEP status. It did so in 2006, after Mr. Nagler 

supplied a letter of recommendation, its staff conducted a limited due diligence review that 

missed press articles containing negative information about Mr. Obiang, and its staff reached the 

surprising conclusion that Equatorial Guinea was a low risk country. On the other hand, to the 

bank’s credit, when the Obiang account received a $500,000 EG wire transfer and disbursed 

nearly all of the funds within a month, the bank decided that it was ill-equipped to oversee such 

high risk transactions and immediately closed the account. 

 Together, these six banks provided evidence that U.S. financial institutions need to 

strengthen their AML and PEP controls if they are to keep foreign corruption out of the United 

States. Stronger measures include using better PEP lists to identify PEP clients and obtain 

accurate information about them; obtaining beneficial ownership information for U.S. shell 

companies; providing prompt reviews of high-dollar wire transfers from high risk jurisdictions; 

and strengthening the monitoring of PEP, attorney-client, law office, and shell company accounts 

by designating them as high risk accounts. Banks should also consider obtaining a written 

certification from each attorney-client and law office account that the account will not be used to 

bypass AML or PEP controls at the bank, conceal PEP activity from the bank, bring suspect 

funds into the bank, or provide services to a PEP who had been excluded from the bank. 

C. Obiang Use of Real Estate and Escrow Agents To Purchase 

 U.S. Property With Suspect Funds 

In addition to members of the U.S. legal profession, Mr. Obiang employed members of 

the U.S. real estate industry to help him buy and sell high-end real estate in California, using 

millions of dollars in suspect funds transferred from Equatorial Guinea. Neal Baddin, a real 

estate agent at Coldwell Banker, helped Mr. Obiang purchase the $30 million property in 

Malibu, while John Kerrigan, a real estate agent with Mirzo International, Inc., helped 

Mr. Obiang sell a Los Angeles area house for $7.7 million. First American provided key escrow 

services for the Malibu purchase, accepting $30 million in wire transfers from Equatorial Guinea 

to complete the transaction. Neither the real estate agents nor the escrow company asked 

Mr. Obiang about the source of his funds, even when he made a multi-million-dollar real estate 
74 

purchase without using a mortgage and wire transferred the needed funds from a country known 

for corruption, since none had a legal obligation to inquire. 

As explained earlier, since 1988, U.S. AML laws have identified “persons involved in 

real estate closings and settlements” as vulnerable to money laundering abuses due to the large 

sums of money involved in their transactions. 405 The 2001 Patriot Act required this group to 

establish AML programs, unless exempted by the Treasury Department.406 In 2002, the Treasury 

Department issued a “temporary” exemption for persons involved in real estate closings and 

settlements from the new requirement; eight years later, the Treasury Department still has not 

required them to establish AML programs.407 Nor has the real estate industry issued AML 

guidance to its members. That means, under current law, U.S. real estate and escrow agents 

operate without any legal obligation to know their customers, evaluate the source of their funds, 

or exercise special precautions when dealing with PEPs. 

(1)Real Estate Agent Neil Baddin 

Neal Baddin has been involved in the real estate business for 29 years.408 Originally from 

Minnesota, he moved to Los Angeles in 1979, and over the years worked at a number of real 

estate firms. He currently works as an independent contractor in a branch office of Coldwell 

Banker. 

Mr. Baddin’s office is located in the Hollywood Hills, and he told the Subcommittee that 

he works with many people in the entertainment industry.409 He stated that he usually works 

with clients seeking property in the $800,000 to $2 million price range. Mr. Baddin said he 

attracts clients through referrals, telephone calls, and advertising. He indicated that the $30 

million purchase of the Malibu property by Mr. Obiang was the largest transaction he has 

worked on. 

Introduction to Mr. Obiang. Mr. Baddin stated that he was introduced to Mr. Obiang 

by Michael Jay Berger, whom he has known since the early 1990s when Mr. Berger moved into 

Mr. Baddin’s neighborhood.410 Mr. Baddin stated that Mr. Berger called him in August or 

September 2004, said he was representing a wealthy client who wanted to buy a property, and 

the client was looking for a new real estate agent. Mr. Baddin wasn’t sure if Mr. Berger 

mentioned the client’s name at that time, but understood that it would be a “delicate and intricate 

sales transaction.” 

Mr. Baddin said that, in or around October 2004, Mr. Berger arranged a meeting at the 

Beverly Wilshire Hotel where he introduced Mr. Baddin to Mr. Obiang.411 Mr. Baddin said the 

                                                           

405 See 31 U.S.C. § 5312(a)(2)(U)(including “persons involved in real estate closings and settlements” in the list of 

“financial institutions” subject to U.S. AML requirements). 

406 See Section 352 of the Patriot Act of 2001, P.L. 107-56 (October 26, 2001), codified at 31 U.S.C. § 5318(h). 407 See 31 CFR § 103.170, as codified by interim final rule published at 67 FR 21110 (April 29, 2002, as amended at 

67 FR 67547 (November 6, 2002) and corrected at 67 FR 68935 (November 14, 2002). 

408 Subcommittee interview of Mr. Baddin, May 12, 2008. 

409 Id. 410 Id. 411 Id. Prior to meeting Mr. Obiang, Mr. Baddin stated that in or around April 2004, he had visited Mr. Obiang’s 

then residence on Antelo Road during an open house. Mr. Baddin wrote: “Regarding my visit to Mr. Ngeuma’s 
75 

meeting took place in a suite, that Mr. Obiang was accompanied by a woman that may have been 

his girlfriend, and that his impression was that Mr. Obiang was “bigger than life.” Mr. Baddin 

reported that they spoke very little about real estate, except in general terms. Mr. Baddin said 

Mr. Berger had told him that Mr. Obiang had a house in mind and had made previous bids on the 

residence without success. At the end of the meeting, Mr. Baddin said that he did not know if he 

would ultimately be representing Mr. Obiang. 

Mr. Baddin said that, about a month later, Mr. Berger telephoned and told him that 

Mr. Obiang wanted to work with him.412 On November 1, 2004, Mr. Baddin entered into an 

exclusive retainer agreement to locate property for Mr. Obiang. The retainer agreement said that 

the real estate agent fee for the purchase of a property would comply with the Multiple Listing 

Service (MLS), and that, “The first and only house for now to be covered by this agreement is 

3620 Sweetwater Mesa Road, Malibu CA.”413 The agreement was signed by Mr. Berger as 

president of Beautiful Vision, Inc.414 Mr. Baddin told the Subcommittee he didn’t know why the 

retainer agreement was signed by Mr. Berger or what business Beautiful Vision was engaged in, 

but knew that it was a company that had been created by Mr. Obiang with Mr. Berger, and had 

no employees.415 

Bidding on the Property. In November 2004, Mr. Baddin and Mr. Berger went to look 

at the Sweetwater property in an exclusive gated community in Malibu, California. Mr. Baddin 

said that the property was “one of the most extraordinary pieces of property I’ve ever seen in my 

life.”416 He described it as “12 acres of land over looking one of the most famous surfing 

beaches in California. The main house was 15,000 square feet in a Mediterranean style. There 

was a 2500 square foot guest house, 2 gate houses, a pool overlooking the ocean, a small putting 

green, and a tennis court.” The asking price was $35 million. Mr. Baddin said that an assistant 

from the listing company, Hilton & Hyland, met them at the property to show it to them. 

Over the course of more than a year, he said that Mr. Obiang made five offers on the 

property. The first, in November, was for $27 million.417 Mr. Baddin submitted this offer in 

person to Hilton & Hyland which countered with an offer of $32 million.418 Mr. Obiang 

                                                                                                                                                                                               

house on Antelo, My wife and I saw it advertised as an Open House on a Sunday approximately around 4/04. ... 

Mr. Kerrigan was holding it open. We were amazed at this round Nautilus shaped house, but what was more 

amazing was the car collection in the garage that John showed us. We asked John, ‘who owns this house?’ He said, 

I shouldn’t really say, but he’s a minister of a very wealthy country in Africa. ... I did not try to make contact with 

the Owner. ... By coincidence and by a mutual friend, I was introduced to Mr. Nguema around 10/04.” 

Memorandum from Mr. Berger, PSI-Coldwell_Banker-01-000502. 

412 Subcommittee interview of Mr. Baddin, May 12, 2008. 413 11/1/04 Exclusive Retainer Agreement to Locate Real Property, PSI-Coldwell_Banker-01-000501. 414 Id. This was the only retainer agreement that was signed between Mr. Baddin and Mr. Berger acting as an agent 

of Mr. Obiang. 

415 In a statement later submitted in connection with an arbitration proceeding, Mr. Obiang described Beautiful 

Vision as “my company.” January 2007 Declaration of Michael Berger, Mirzo International, Inc. v. Hyland, Case 

No. AB06-15 (Beverly Hills/Greater Los Angles Association of Realtors Arbitration Complaint Case), SEN007574-

76, at 7575.

416 Subcommittee interview of Mr. Baddin, May 12, 2008. 4173/11/09 legal counsel to Neal Baddin’s written response to Subcommittee questions, PSI-Coldwell_Banker-03-

0002. 

418 Mr. Baddin reported that although he submitted this offer, he understood that another real estate agent, John 

Kerrigan, had submitted an offer for Obiang prior to the offer Mr. Baddin submitted. In a written statement, 
76 

responded with an offer of $27.5 million.419 Mr. Baddin said that, on November 8, 2004, Hilton 

& Hyland countered with $31.5 million.420 

Mr. Baddin said that about six months then went by without further developments.421 He 

said that he ran into Mr. Berger and inquired about the property but received no new information. 

In September 2005, Mr. Baddin stated that he received a call from either Mr. Obiang or 

Mr. Berger informing him that Mr. Obiang wanted to make a new offer. Mr. Baddin confirmed 

that the property was still on the market, and called Mr. Obiang with that information. He said 

that Mr. Obiang said “Let’s give it another try,” and informed him that another attorney who 

specialized in real estate, George Nagler, would be involved in the transaction. Mr. Baddin said 

that he began dealing with Mr. Nagler as well as Mr. Berger, but that Mr. Obiang remained the 

primary contact.422 On September 30, 2005, Mr. Obiang submitted a new offer for $28.5 

million.423

In November 2005, Mr. Baddin took Mr. Nagler to see the property.424 On December 21, 

2005, Mr. Baddin submitted a fourth offer on behalf of Mr. Obiang to buy the property for $30 

million.425 The seller countered on December 28 for $31 million. Mr. Baddin said at that point, 

the transaction was becoming complicated, and the attorneys began dealing directly with one 

another.426 In December 2005, Mr. Obiang contacted Mr. Baddin who presented Hilton & 

Hyland with a fifth offer for $30.5 million. In early January 2006, Mr. Nagler called Mr. Baddin 

and informed him that the seller had accepted the offer. According to Mr. Baddin, the final price 

was $30 million for the residence and $750,000 for specified furnishings in the house.427 

                                                                                                                                                                                               

Mr. Baddin wrote, “I asked both Mr. Berger and Mr. Ngeuma why they weren’t continuing to work with 

Mr. Kerrigan. They both explained to me jointly and separately that Mr. Kerrigan had bungled the sale of 

Mr. Nguema’s property on Antelo. They said he let the Buyer move in to Antelo before the close of escrow without 

Mr. Nguema’s permission. The Buyer also refused to close the escrow on time and the transaction became 

litigious.” Memorandum from Mr. Baddin, PSI-Coldwell_Banker-01-000502. 

4193/11/09 legal counsel to Neal Baddin’s written response to Subcommittee questions, PSI-Coldwell_Banker-03-

0002. Mr. Baddin noted that throughout the negotiations, Mr. Obiang was very difficult to reach and didn’t always 

return Mr. Baddin’s phone calls. He also noted that at times he would have an appointment with Mr. Obiang, and he 

would spend hours waiting at his house and Mr. Obiang wouldn’t come downstairs or he wouldn’t show up. 420 3/11/09 legal counsel to Neal Baddin’s written response to Subcommittee questions , PSI-Coldwell_Banker-03-

0002. 

421 Subcommittee interview of Mr. Baddin, May 12, 2008. 422 A September 29, 2005, email from Lina Romo, an Obiang assistant, confirms Mr. Nagler’s involvement in the 

transaction when she asks Mr. Nagler to send the documents for the Malibu property to Mr. Obiang at the Hotel 

Crillon in Paris. See 9/29/05 email from Mr. Nagler to Mr. Baddin, PSI-Coldwell_Banker-01-000385. 

423 3/11/09 legal counsel to Neal Baddin’s written response to Subcommittee questions, PSI-Coldwell_Banker 03-

0002. 

424 Subcommittee interview of Mr. Baddin, May 12, 2008. 425 3/11/09 legal counsel to Neal Baddin’s written response to Subcommittee questions, PSI-Coldwell_Banker 03-

0002. 

426 According to Mr. Baddin, the complicating factors included whether or not the furniture would remain with the 

house and the date when the seller would vacate the property. 

427 3/11/09 legal counsel to Neal Baddin’s written response to Subcommittee questions, PSI-Coldwell_Banker-03-

0002. 
77 

Escrow Deposits. To complete the purchase of the Malibu property, in January 2006, 

Hilton & Hyland and Coldwell Banker opened an escrow account at First American Title 

Company.428 Mr. Baddin stated that the seller chose the escrow agent.429 

Mr. Baddin told the Subcommittee that, a few months earlier, Hilton & Hyland had asked 

for funds to be placed in escrow at Coldwell Banker to demonstrate that Mr. Obiang was making 

a serious bid on the Malibu property. In an email dated October 3, 2005, Hilton & Hyland 

wrote: “In order for us to present your offer on Sweetwater Mesa to the owner’s attorney, we 

need verification of funds from your buyer.”430 Mr. Baddin said that, in response, Mr. Obiang 

transferred $500,000 to an escrow account at West Coast Escrow, which was affiliated with 

Coldwell Banker.431 On December 22, 2005, Mr. Obiang sent an additional $900,000 to the 

escrow account, sending the funds from another U.S. account rather than from Equatorial 

Guinea.432 On February 2, 2006, West Coast Escrow, on behalf of Mr. Obiang, wire transferred 

the $900,000 to First American Title Company as a down payment on the purchase of the Malibu 

residence. The funds were placed in First American’s escrow account at Wachovia Bank.433

Mr. Baddin told the Subcommittee that, after the price was agreed on and the escrow 

deposits made, he spent the next 45 days, from January into February 2006, helping to conduct 

detailed inspections of the property.434 He said that Mr. Obiang did not accompany him, and he 

dealt exclusively with Mr. Nagler. He said that several repairs were needed, and the seller 

agreed to credit $80,000 to $100,000 back to the buyer for the repairs. 

Confidentiality Agreement. Mr. Baddin told the Subcommittee that, on March 31, 

2006, just prior to the purchase of the Malibu property, Coldwell Banker was asked to and did 

sign a confidentiality agreement regarding the purchase.435 The agreement stated that the 

identity of Mr. Obiang was “confidential” and “not to be disclosed to anyone.”436 

                                                           

428 California law requires that the real estate buyer place money in escrow. First American Title Company owns 

First American Trust Company; First American Title Company is, in turn, owned by its parent company, First 

American Corporation. Subcommittee interview of First American officials, January 15, 2010. 

429 Subcommittee interview of Mr. Baddin, May 12, 2008. 430 10/3/05 email from Hilton & Hyland to Mr. Baddin, PSI-Coldwell_Banker-01-000386. In a February 1, 2008 

telephone call with the Subcommittee, Alla Furman of Hilton & Hyland stated that she knew something was unusual 

with this transaction because it was “all confidential” and it “sounded weird to us.” 431 See fax from Mr. Baddin, PSI-Coldwell_Banker 01-000706-7 (instructions from Mr. Baddin to Mr. Obiang’s 

attorney, Mat Hsu, to send funds to the West Coast Escrow account at Comerica Bank). 432 See 12/22/05 email from Sidley Austin to Citibank Private Bank requesting the wire transfer to West Coast 

Escrow, and accompanying email showing the transfer was completed, PSI-Sidley Austin-01-000028. The 

$900,000 was wire transferred by Sidley Austin LLP, a law firm, from its account at Citibank Private Bank to the 

West Coast Escrow account at Comerica Bank, on behalf of Mr. Obiang. Sidley Austin had received a much larger 

sum from a U.S. escrow account at Gulfstream Aerospace Corporation, which had been negotiating with Mr. Obiang 

over the purchase of an aircraft, as explained below. The negotiations were unsuccessful, and Gulfstream had 

returned Mr. Obiang’s escrowed funds, sending them to Sidley Austin at his direction. See 12/17/09 letter from 

Sidley Austin to the Subcommittee, PSI-Sidley Austin-01-000001-3. 

433 2/6/06 receipt for deposit from First American Title Co., SEN011816. 434 Subcommittee interview of Mr. Baddin, May 12, 2008. 435 3/31/06 Broker Confidentiality Agreement, PSI-Coldwell_Banker-01-000509-10. 436 Id. Mr. Baddin had signed the confidentiality agreement a few days earlier, on March 23, 2006, but the manager 

of his branch office officially signed it on behalf of Coldwell Banker. 3/23/06 Broker Confidentiality Agreement, 

SEN012339-41. 
78 

Mr. Baddin stated that he had signed a few confidentiality agreements in the past, 

“usually for a celebrity type of person.” Mr. Baddin stated that being asked to sign a 

confidentiality agreement did not raise a red flag for him, because people are “nosy.” Hilton & 

Hyland told the Subcommittee that both the seller and the buyer wanted a confidentiality 

agreement.437

Mr. Baddin told the Subcommittee that, in addition to signing the confidentiality 

agreement, he decided not to list his name in the real estate MLS system as the buyer’s real 

estate agent. Mr. Baddin said that he didn’t want to be listed in the MLS system because it was a 

very high end sale and if he had been listed, he would have been “bombarded” by other agents. 

Mr. Baddin reported that Hilton & Hyland had asked him if he wanted to be listed as the buyer’s 

agent, and he declined. He said that he usually puts his name in the system, and there have been 

only a few times when he hasn’t. Mr. Baddin noted that he could have been fined $250 for not 

putting his name in the system. 

$30 Million in EG Wire Transfers. The grant deed for the Malibu property indicates 

that the seller sold the residence to Sweetwater Malibu, LLC on February 27, 2006.438 

According to Mr. Baddin, while the deed was signed and notarized on February 27, the deal was 

not recorded and therefore not finalized until April 27, 2006, because the property was not 

actually delivered until April.439 

Mr. Baddin also told the Subcommittee that the original offer for the property had been 

made in the name of Beautiful Vision, Inc., but the final offer had been made in the name of 

Teodoro Nguema Obiang. During the escrow process, Mr. Baddin said that Mr. Nagler arranged 

to remove Mr. Obiang’s name from the deed and for the title to be recorded in the name of 

Sweetwater Malibu, LLC, a shell company Mr. Nagler had formed two months earlier in 

February 2006.440 

In April 2006, Mr. Obiang actually paid for the purchase of the Malibu residence, which 

Forbes magazine later described as the sixth most expensive residential purchase in the United 

States that year.441 In doing so, Mr. Obiang did not use a mortgage. Instead, according to the 

settlement document, Mr. Obiang paid for the property outright, in six installments, as follows: 

 On February 6, 2006, he paid $900,000. 

                                                           

437 Subcommittee interview of Jeffrey Hyland, December 20, 2007. 438 2/20/06 Grant Deed from First American Title Co., PSI-Coldwell_Banker-01-000069-70. The seller sold the 

property under the name Sweetwater Mesa, LLC. 

439 Subcommittee interview of Mr. Baddin, May 12, 2008. Mr. Baddin stated in another document that “the deed to 

the buyer was executed prior to close of the sale. The deed remained in escrow until the Buyer placed sufficient 

funds into escrow, when the sale closed. During most of this time the buyer’s contingencies had not been removed. 

A supplemental escrow instruction dated April 16, 2006, to the effect that the buyer would release another $500,000 

to the seller to extend the escrow to May 15, 2006, was circulated by the escrow holder.” 3/11/09 legal counsel to 

Neal Baddin’s written response to Subcommittee questions, PSI-Coldwell_Banker-03-0003.

440 3/11/09 legal counsel to Neal Baddin’s written response to Subcommittee questions, PSI-Coldwell_Banker-03-

0002. See 3/23/06 supplemental escrow instructions submitted by Mr. Nagler to First American Title Company, 

SEN011514. These instructions stated that Mr. Obiang would take title to the property in the name of Sweetwater 

Malibu, LLC and asked for all documentation to reflect that vesting change. 

441 Forbes Magazine, “Most Expensive Home Sales 2006,” December 12, 2006, http://www.forbes.com/ 

home/2006/12/11/most-expensive-sales-forbeslife-cx_mw_1212mostexpensivehomesales_slide_7.html 

?thisSpeed=15000. 
79 

 On April 5, 2006, he paid $5,908,400. 

 On April 10, 2006, he paid $5,908,400. 

 On April 19, 2006, he paid $5,908,400. 

 On April 21, 2006, he paid $5,908,400. 

 On April 26, 2006, he paid $5,908,400.442

Documentation reviewed by the Subcommittee shows that Mr. Obiang provided the 

initial payment of $900,000 from a bank account belonging to a U.S. law firm, as explained 

earlier.443 The remaining payments were wire transferred directly from Equatorial Guinea to the 

First American Trust escrow account at Wachovia Bank. Specifically, the funds originated at 

Societe General de Banque in Equatorial Guinea where Mr. Obiang had a personal account; 

passed through correspondent accounts held by the Bank of Central African States and Banque 

de France; and were deposited with Wachovia Bank in California, where First American Trust 

had its escrow account. This chart summarizes the five EG wire transfers used to fund the 

purchase of the Malibu residence. 

EG Wire Transfers To Purchase Malibu Residence

Date Amount Originating Institution Through Beneficiary Bates

4/05/06 $5,908,400 Obiang Account at Societe

Generale de Banque‐

Equatorial Guinea

Bank of Central African

States  Banque De

France

First American Trust

Account at Wachovia

BF‐G‐00004

4/10/06 $5,908,400 Obiang Account at Societe

Generale de Banque‐

Equatorial Guinea

Bank of Central African

States  Banque De

France

First American Trust

Account at Wachovia

BF‐G‐00010

4/19/06 $5,908,400 Obiang Account at Societe

Generale de Banque‐

Equatorial Guinea

Bank of Central African

States  Banque De

France

First American Trust

Account at Wachovia

BF‐G‐00016

4/21/06 $5,908,400 Obiang Account at Societe

Generale de Banque‐

Equatorial Guinea

Bank of Central African

States   Banque De

France

First American Trust

Account at Wachovia

BF‐G‐00019

4/26/06 $5,908,400 Obiang Account at Societe

Generale de Banque‐

Equatorial Guinea

Bank of Central African

States  Banque De

France

First American Trust

Account at Wachovia

BF‐G‐00022

Total‐ $29,542,000 Source‐ Wachovia

Prepared by Subcommittee Staff

Mr. Baddin told the Subcommittee that the Obiang purchase was unique in his 

experience, not only because of the high price involved, but also because no mortgage was 

used.444 When questioned, he stated that none of the parties involved in the transaction had 

asked how Mr. Obiang would provide the funds needed for the purchase price. Mr. Baddin 

noted that it is up to the seller to determine whether or not they believe the buyer has the ability 

to pay for the property.   

                                                           

442 4/28/06 Buyer’s Final Settlement Statement from First American Title Co., PSI-Coldwell_Banker-02-000367. 443 The U.S. law firm was Sidley Austin Brown & Wood LLP (now Sidley Austin LLP) which sent the $900,000 to 

West Coast Escrow in December 2005. On February 6, 2006, West Coast Escrow sent the funds to First American. 

2/6/06 receipt for deposit from First American Title Co., SEN011816. 444 Subcommittee interview of Mr. Baddin, May 12, 2008. 
80 

When questioned about whether Mr. Baddin knew the source of Mr. Obiang’s funds, 

Mr. Baddin responded that he did not. He said that he knew Mr. Obiang was involved in the 

government in his country, and that Mr. Berger had told him Mr. Obiang was qualified to 

purchase the property. Mr. Baddin stated that he never asks his clients questions about their 

finances, since he had no legal obligation to do so and such questions made most clients 

uncomfortable. He said that, from his viewpoint, there were “no red flags” raised by either the 

transaction or Mr. Obiang. 

First American told the Subcommittee that it had a voluntary AML program and that, 

among other measures, each time it receives a wire transfer from a foreign account, it checks the 

name of the originator against lists compiled by OFAC of terrorists, narcotics traffickers, and 

other criminals, as required by law.445 It noted that Mr. Obiang was not on the OFAC list. Its 

other AML controls did not prevent First American from accepting the wire transfers from 

Mr. Obiang.

First American’s bank, Wachovia, told the Subcommittee that its systems automatically 

screen all incoming wire transfers against the OFAC lists, as required by law.446 Wachovia 

indicated that, because the Obiang name is not on the OFAC lists, the wire transfers from 

Equatorial Guinea did not trigger a review, even though Wachovia had designated Equatorial 

Guinea as a high risk country. Instead, the $30 million in EG wire transfers were deposited into 

the First American escrow account with no questions asked. Wachovia noted that, under current 

law, it has no legal obligation to perform due diligence on the clients of its client, First 

American.447 

Split Commission. One last issue related to the purchase of the Malibu residence 

involves the $615,000 commission paid to the real estate agent. Mr. Baddin said that, in 

September 2005, about a year after he began working with Mr. Obiang, Rosalina Romo, an 

Obiang assistant, telephoned and asked him if he would be willing to credit half of his 

commission on the Malibu purchase back to Mr. Obiang. Mr. Baddin said that he agreed. While 

unusual, Mr. Baddin noted that he had split his commission with clients in the past, though not 

often. He said he agreed to it in this case, because he did not want Mr. Obiang to back out of the 

deal and knew the commission would be large due to the high purchase price. 

On September 18, 2005, Mr. Baddin handwrote a letter in which he agreed to split his 

commission with Mr. Obiang. The letter stated: “This is a letter to confirm the agreement that 

Neal Baddin of Coldwell Banker will share the commission on 3620 Sweetwater 50/50 with 

Teodoro Ngeuma Obiang.”448 The letter was signed by both Mr. Baddin and Mr. Obiang. 

Mr. Baddin said that he was later told by Mr. Obiang’s attorney, Matt Hsu, that Mr. Obiang 

wanted to amend the letter agreement. On December 16, 2005, Mr. Obiang sent Mr. Baddin a 

more formal letter stating that Mr. Baddin was representing Mr. Obiang as his real estate agent 

                                                           

445 Subcommittee interview of First American, January 11, 2010. All U.S. financial institutions also perform this 

wire transfer screening, so Wachovia, as First American’s bank, would also have performed this function.

446 11/21/08 legal counsel to Wachovia’s written response to Subcommittee questions. PSI Wachovia 10-0001-15. 447 Id., at 5, 8. Wachovia has since informed the Subcommittee that it has added Mr. Obiang to an internal list 

within the bank that blocks wire transfers bearing specified names, as explained further below. 

448 9/18/05 letter from Mr. Baddin and Mr. Obiang, PSI-Coldwell_Banker-01-000388. 
81 

and asking Mr. Baddin to provide Mr. Obiang with 50% of his commission on the Malibu 

property.449 

The total commission on the Malibu property was $615,000.450 Mr. Obiang received 

$305,000, and Mr. Baddin received $305,000, although after taxes and processing fees, 

Mr. Baddin ultimately received about $241,000.451 The remaining $5,000 was retained by 

Coldwell Banker. Mr. Baddin also paid Mr. Berger a referral fee of $60,000.452

 Ongoing Relationship. Mr. Baddin told the Subcommittee that he continued to work 

with Mr. Obiang after the closing on the Malibu property.453 About a month or two after the 

closing, Mr. Obiang called Mr. Baddin and asked him if he knew a good interior decorator. 

Mr. Baddin recommended a decorator, and he and the decorator met with Mr. Obiang at the 

Pacific Design Center. 

In the fall of 2006, Mr. Obiang called Mr. Baddin and told him that he wanted to 

purchase a condominium. An Obiang assistant, Melinda DeHaven, arranged to view four to six 

properties with Mr. Baddin, but at the last minute canceled and did not reschedule. In 2007, 

Mr. Obiang called again and asked Mr. Baddin to show him properties of interest. Mr. Baddin 

said he took Mr. Obiang to see two or three houses in the Los Angeles area, but Mr. Obiang was 

not interested in any of them. 

Mr. Baddin stated that Mr. Obiang still occasionally calls him. He stated that Mr. Obiang 

called him in early 2008, and said he was thinking about selling the Malibu property. 

Mr. Baddin said that he was not surprised since Mr. Obiang did not live there very much and 

traveled a great deal. 

(2)Real Estate Agent John Kerrigan 

Prior to Mr. Baddin, Mr. Obiang worked with another California real estate agent, John 

Kerrigan. Mr. Kerrigan told the Subcommittee that he had been in the real estate business since 

1984, and currently worked for Mirzo International, Inc.454 He said that, from 1999 to 2004, he 

had shown Mr. Obiang a number of properties for sale, but was never selected as the buying 

agent. In 2004, however, Mr. Kerrigan helped Mr. Obiang sell a Los Angeles residence for $7.7 

million. 

Mr. Kerrigan has also filed a complaint against real estate agent Neil Baddin, alleging 

that he inappropriately lured away his client by offering to split the commission related to the 

purchase of the Malibu property.455 That complaint was referred for arbitration, and a number of 

                                                           

449 12/16/05 letter from Obiang to Mr. Baddin, PSI-Coldwell_Banker-01-000505. 450 3/27/06 NRT cash receipt statement, PSI-Coldwell_Banker-01-000549. 451 Id.; 3/11/09 legal counsel to Neal Baddin’s written response to Subcommittee questions, PSI-Coldwell_Banker03-0003. 

452 3/11/09 legal counsel to Neal Baddin’s written response to Subcommittee questions, PSI-Coldwell_Banker-03-

0003. 

453 Subcommittee interview of Mr. Baddin, May 12, 2008. 454 Subcommittee interview of Mr. Kerrigan, May 15, 2008. 455Mirzo International, Inc. v. Hyland, Arbitration Complaint Case No. AB06-15. 11/6/06 email from Mr. Baddin to 

Mr. Obiang, PSI-Coldwell_Banker-01-000498. 
82 

pleadings were filed in the arbitration case providing information about the Antelo and Malibu 

properties. 

Introduction to Mr. Obiang. Mr. Kerrigan said that, in 1999, when he was working at 

Remax, he received a “cold call” from Mr. Obiang who was looking for properties in the $10 to 

$15 million range.456 Mr. Kerrigan reported that soon after he received the call, he met 

Mr. Obiang at the Beverly Hills Hotel and showed him photographs of residences for sale. 

Mr. Kerrigan stated that, from 1999 to 2003, he showed Mr. Obiang approximately 20 to 30 

properties in the $15 to $20 million price range and, in 2004, made multiple offers on his behalf 

to purchase the Malibu property that Mr. Obiang eventually purchased in 2006, using a different 

real estate agent, Mr. Baddin.457 

In a statement submitted in connection with his complaint against Mr. Baddin, 

Mr. Kerrigan described his relationship with Mr. Obiang in the following manner: 

“I have had [an] extensive, continuous, and ongoing real estate agency relationship with 

the Buyer, Mr. Teodoro Nguema Obiang, for the past seven years, from September 1999 

all the way to the present, October 2006. In addition to helping Mr. Ngeuma with his real 

estate needs, I have been closely connected to helping him adjust to living here in the 

U.S. over the last seven years. Whenever he came to town I would always make myself 

available to him, at his request, to run errands, help him out with selecting furniture, 

finding the best hotels online for him to travel to on vacation, and finding rental 

apartments for his friends, all with no commission compensation to me. ... I was always 

willing to help him any way I could in order to build a strong working relationship with 

this client.”458

Mr. Kerrigan also stated that he showed Mr. Obiang: 

“a number of condominiums that he wanted to lease or purchase because he was getting 

tired of staying in hotels. He wanted a condo in addition to a large home and the plan 

was to let his out of town friends stay in the condo after he purchased a home. He put in 

offers to purchase with me on two penthouse condos for $8,000,000 and $7,500,000 on 

Wilshire Blvd. Corridor. The offer for $7,500,000 was accepted and he opened escrow in 

May 2002. Then, two and a half months later, he abruptly cancelled the escrow for no 

reason in August 2002 and walked away from most of his deposit. I continued to work 

with him.”459 

Antelo Property Sale. According to Mr. Kerrigan, in 2001, Mr. Obiang purchased a 

very contemporary house on Antelo Road, in the Los Angeles area, for $6.5 million.460 

                                                           

456 “Exhibit 1A, Detailed Information by John Kerrigan on the Agency Relationship of John Kerrigan with the 

Buyer, Leading up to the Purchase of the Malibu Property,” (hereinafter “Kerrigan Statement”), Mirzo International 

v. Hyland, Arbitration Complaint Case No. AB06-15, PSI-Coldwell_Banker-01-000009-24; Subcommittee 

interview of Mr. Kerrigan, May 15, 2008. 

457 Kerrigan Statement, Mirzo International, Inc. v. Hyland, Arbitration Complaint Case No. AB06-15. PSIColdwell_Banker-01-000014. 

458 Id. 

459 Id., at 15-16. 460 Id., at 15. 
83 

Mr. Obiang did not use him as his agent when he purchased the Antelo property.461 

Mr. Kerrigan told the Subcommittee that he understood Mr. Obiang had purchased the property 

in his own name, did not use a mortgage, and provided funds to pay the entire $6.5 million 

cost.462 The Subcommittee subsequently located documentation of a wire transfer sent on March 

19, 2001, for $6.2 million from an Obiang account at Riggs Bank, Account No. 76923450, to a 

Union Bank of California account for Beverly Hills Escrow in connection with property on 

Antelo Road in Los Angles.463 Mr. Kerrigan told the Subcommittee that he was not aware of and 

did not ask about the source of Mr. Obiang’s funds.464

Mr. Kerrigan said that a few years later, in or around March 2004, Mr. Obiang decided to 

sell the Antelo property, and telephoned him to act as his agent in the sale.465 Mr. Kerrigan said 

that Mr. Obiang had never actually moved into the property. He said he originally listed the 

property for $10 million at Mr. Obiang’s request, even though that was an unrealistically high 

price. On October 8, 2004, the Antelo property sold for $7.7 million, which meant that 

Mr. Obiang had secured a gross profit of more than $1 million from the $6.5 million purchase 

price he had paid in 2001.466

 On October 19, 2004, the escrow agent who handled the Antelo property sale, D&G 

Escrow Corp., transferred over $4 million from the purchase price to a Beautiful Vision, Inc. 

account at Bank of America.467 Beautiful Vision had been formed the prior week by Mr. Berger, 

on October 12, 2004. It’s not clear where the remainder of the $7.7 million was sent. 

Subsequent to the sale, disagreements apparently arose among Mr. Kerrigan, Mr. Berger, 

and Mr. Obiang.468 

                                                           

461 Id. Mr. Kerrigan told the Subcommittee that he had told Mr. Obiang about the Antelo property, and Mr. Obiang 

“did not want to see it because it was a contemporary style and he preferred Mediterranean. After all the time and 

effort I spent I was disappointed that he did not buy it from me but I continued to work with him just the same.” 

462 Subcommittee interview of Mr. Kerrigan, May 15, 2008. 463 See UBOC Case Report with information on this wire transfer, PSI-Union_Bank_of_California-04-0452. 464 Id. 465 Id. 466 See 10/15/04 Grant Deed, signed by Mr. Obiang, from Commonwealth Land Title Co., SEN003674. 467 November 2004 statement for Beautiful Vision special checking account, BAC-PSI-02474. 468 Mr. Kerrigan told the Subcommittee that, as part of the Antelo sale, he entered into an agreement with the 

buyer’s representative, R & B Realty, to provide it with 1% of the commission, while Mr. Kerrigan would keep 4%. 

Mr. Kerrigan said that normally on a 5% commission, the buyer and seller’s agent split the commission evenly. 

Mr. Kerrigan said that Mr. Berger “made an issue” of the commission division and “tried to disrupt the escrow.” 

Mr. Kerrigan stated that, in the end, he received a $308,000 commission and the buyer’s agent received $77,000 for 

the Antelo property. Subcommittee interview of Mr. Kerrigan, May 15, 2008. 

Mr. Kerrigan also stated that, prior to the sale, the Antelo property needed repair work. Mr. Kerrigan said 

that a Riggs Bank employee, Simon Kareri, asked him to recommend a construction firm. Mr. Kerrigan 

recommended Pacific National Construction (PNC) which was selected for the work. He said the repair work 

ultimately cost $80,000, and Mr. Berger would not pay the bill. Mr. Kerrigan stated that PNC put a lien on the 

property and was ultimately paid for its work. 

In a written statement, Mr. Baddin wrote: “I asked both Mr. Berger and Mr. Nguema why they weren’t 

continuing to work with Mr. Kerrigan. They both explained to me jointly and separately that Mr. Kerrigan had 

bungled the sale of Mr. Ngeuma’s property on Antelo. They said he let the Buyer move in to Antelo before the 

close of escrow without Mr. Ngeuma’s permission. The Buyer also refused to close the escrow on time and the 

transaction became litigious.” Memorandum by Mr. Baddin, PSI-Coldwell_Banker_01-000502. According to 

Mr. Kerrigan, Mr. Berger had authorized the new client moving in early. 
84 

Malibu Property. Mr. Kerrigan stated that, in 2003, he showed Mr. Obiang the Malibu 

property that Mr. Obiang eventually purchased in 2006.469 He said that he showed the property 

to Mr. Obiang several times from 2003 to 2005, and, at Mr. Obiang’s direction, submitted 

multiple offers for the property, in the range of $21 to $29 million, none of which were 

accepted.470 Mr. Kerrigan stated that as late as December 2005, he was still communicating with 

Mr. Obiang about purchasing the Malibu property. 

 Mr. Kerrigan wrote that, in December 2005, “Jeff Hyland reluctantly told me that my 

client Teodoro Ngeuma had been to the property in the late summer of 2005 with Neal 

Baddin.”471 Mr. Kerrigan wrote that he called Mr. Obiang and asked him whether he was 

working with Mr. Baddin, and Mr. Obiang said that Mr. Baddin “had offered to kick him back 

50% of the selling commission if he bought the Malibu property through him.”472 Mr. Kerrigan 

later filed suit against Mr. Baddin for allegedly inappropriately luring away his client. 

No Questions. When asked about the source of Mr. Obiang’s funds, Mr. Kerrigan 

indicated that he had no legal obligation to ask such questions and didn’t inquire. He told the 

Subcommittee that he did not know who Mr. Obiang was initially, but ultimately “found out his 

family was running Equatorial Guinea.” He said he did an Internet search, learned that 

Mr. Obiang was the son of the EG President whom some people were trying to overthrow. He 

said he didn’t know how much to believe regarding what he saw on the Internet. He said he had 

no understanding of where Mr. Obiang’s money came from, but assumed it was legitimate. 

Mr. Kerrigan stated: “Who am I to question it?” 

Mr. Kerrigan said that Mr. Obiang “rolled up to showings in a Bentley,” and he wasn’t 

about to turn Mr. Obiang away. He told the Subcommittee: “If he said ‘I want to buy a house for 

$10 million’ and I said, ‘no,’ he’d go to someone else.” He also noted that clients don’t want to 

divulge financial information, and he never talked to Mr. Obiang about finances because he 

didn’t want to “get someone upset.” 

When questioned about whether or not real estate agents should conduct due diligence in 

order to know who their clients are and avoid facilitating real estate purchases with suspect 

                                                           

469 Subcommittee interview of Mr. Kerrigan, May 15, 2008. 470 According to Mr. Kerrigan, Mr. Obiang had authorized him to submit a written offer on the property on October 

18, 2003, for $21 million. 10/18/03 Residential Purchase Agreement, PSI-Coldwell_Banker-01-000179-190. On 

January 29, 2004, Mr. Kerrigan submitted a second offer for $24 million (see 1/29/04 California Residential 

Purchase Agreement, PSI-Coldwell_Banker-01-000148-159) and received a counter offer for $33.9 million (see 

2/3/04 counter offer form, PSI-Coldwell_Banker-01-000144-147). On February 5, 2004, Mr. Obiang submitted a 

written offer of $27 million (see 2/5/04 counter offer form, PSI-Coldwell_Banker-01-000140). On February 9, 2004 

the seller sent back a counter offer of $33.5 million (see 2/9/04 counter offer form, PSI-Coldwell_Banker-01-

000139). On August 27, 2004, Mr. Kerrigan submitted a written offer for $28 million (see PSI-Coldwell_Banker01-000113-124.). On September 1, 2004, the seller countered with a written offer of $32 million (see PSIColdwell_Banker-01-000109-112) Mr. Kerrigan wrote: “We had not come to an agreement on price yet, but as 

time went on we were getting closer to making a deal on the Malibu home.” Kerrigan statement, Mirzo 

International, Inc. v. Hyland, Arbitration Complaint Case No. AB06-15, PSI-Coldwell_Banker-01-000017-18. 471 Statement of Facts Describing the Controversy, Mirzo International, Inc. v. Hyland, Arbitration Complaint Case 

No. AB06-15, PSI-Coldwell_Banker-01-000024. Mr. Kerrigan reported that he never signed a retainer agreement 

with Mr. Obiang. 

472 Id. 
85 

funds, Mr. Kerrigan responded that if those were legal requirements, real estate agents would 

comply with the law. 

(3)Analysis 

Real estate agents, Mr. Baddin and Mr. Kerrigan, assisted Mr. Obiang in his efforts to 

buy and sell high-end real estate in California. They operated, and continue to operate, without 

any legal obligation to know their customers, analyze the source of their funds, or exercise 

special precautions when dealing with PEPs. The escrow agents who handled the Malibu 

purchase, West Coast Escrow and First American, together accepted more than $30 million in 

suspect funds wire transferred from Equatorial Guinea. D&G Escrow Corporation, which 

handled the Antelo property sale, received $7.7 million from the buyer and transferred the sale 

proceeds to Obiang-controlled accounts, including $4 million to a shell company account at 

Bank of America. Those sale proceeds included a $1 million profit on the funds that Mr. Obiang 

had used to buy the property three years earlier. Like their real estate agent counterparts, these 

escrow agents operated, and continue to operate, without any legal obligation to know their 

customers, analyze the source of their funds, or exercise special precautions when dealing with 

PEPs. 

In addition, the banks that housed the escrow agent accounts did not stop the multimillion-dollar wire transfers sent to or from the accounts of the escrow agents, relying on the 

principle that a bank is not obligated to know the clients of its client. These banks’ AML and 

PEP controls depended upon the escrow agents policing their own clients, but under current law, 

U.S. escrow agents selling multi-million-dollar real estate are not required to have AML 

safeguards in place. 

Because of these gaps in U.S. AML law, Mr. Obiang was able to buy and sell U.S. real 

estate without having to account for the source of the funds he used in his transactions. The end 

result was that he sent millions of dollars in suspect funds into and out of the United States in 

connection with his real estate transactions. If AML safeguards are to be applied to these types 

of transactions in the future, real estate and escrow agents should be required to establish AML 

programs. 

D. Obiang Use of a U.S. Escrow Agent To Purchase 

A Private Jet with Suspect Funds 

 In 2006, Mr. Obiang used a shell corporation called Ebony Shine International, Ltd. to 

purchase a private jet with $38.5 million wire transferred from Equatorial Guinea to a U.S. 

escrow agent that facilitated the purchase. After one U.S. escrow agent, McAfee & Taft, learned 

of Mr. Obiang’s involvement in the purchase and refused to complete the transaction without 

information on the source of the funds being supplied by him, another U.S. escrow agent, 

Insured Aircraft Title Services, Inc. (IATS), stepped in and completed the transaction without 

questioning the source of the funds. The $38.5 million was transferred from an Obiang account 

in Equatorial Guinea to an IATS escrow account at UBS Bank in London, and later to various 

U.S. bank accounts. Mr. Obiang now routinely uses the jet to travel throughout the United States 

and around the world.
86 

Like persons involved with real estate closings and settlements, since 1988, “business[es] 

engaged in vehicle sales, including automobile, airplane, and boat sales,” have been identified in 

U.S. AML laws as vulnerable to money laundering abuses due to the large sums involved in their 

transactions.473 The 2001 Patriot Act required such businesses to establish AML programs, 

unless exempted by the Treasury Department.474 In 2002, the Treasury Department provided a 

“temporary” exemption from the statutory requirement to “seller[s] of vehicles, including 

automobiles, airplanes, and boats.”475 Today, eight years after enactment of the Patriot Act, the 

Treasury Department has yet to propose an AML rule for businesses engaged in vehicle sales. 

Treasury has also never made it clear whether such an AML rule would extend to escrow agents 

holding the funds needed to complete the vehicle sales. This business sector has also failed to 

develop AML guidance for its members. That means, under current law, U.S. escrow agents that 

handle aircraft sales operate without any legal obligation to know their customers, evaluate the 

source of funds used to purchase aircraft, or exercise special precautions when dealing with a 

PEP. 

2005 Purchase Attempt. In February 2005, Mr. Obiang employed a U.S. law firm, 

Sidley Austin Brown & Wood LLP (now Sidley Austin LLP), to help him purchase an aircraft 

from Gulfstream Aerospace Corporation (Gulfstream).476 At some point, Mr. Obiang sent more 

than $21 million to an escrow account associated with Gulfstream for the purchase of the 

aircraft,477 but according to the law firm, the “negotiations between Gulfstream and Mr. Obiang 

were unsuccessful.”478 Sidley Austin agreed to accept a wire transfer of the $21 million from 

Gulfstream, after first obtaining a letter from the U.S. Department of Justice that, “at the present 

time,” it had “no basis for either restraining or seizing proceeds used to finance this proposed 

sale as potentially forfeitable property” and “no basis for believing that the monies used to 

purchase the aircraft would violate the U.S. money laundering laws.”479

On July 28, 2005, Gulfstream wire transferred the $21 million to Sidley Austin’s 

attorney-client account at Citibank Private Bank.480 According to the law firm, the transfer “was 

done at the direction of Mr. Obiang with the understanding that the funds would be remitted to 

Mr. Obiang.”481 The funds remained at the law firm for more than four months. On December 

8, 2005, at Mr. Obiang’s request, Sidley Austin wire transferred $250,000 of his funds to Aero 

Records & Title Co. Escrow.482 Sidley Austin also applied about $266,000 of the funds to pay 

                                                           

473 See 31 U.S.C. § 5312(a)(2)(T)(including “a business engaged in vehicle sales, including automobile, airplane, 

and boat sales; in the list of “financial institutions” subject to U.S. AML requirements). 

474 See Section 352 of the Patriot Act of 2001, P.L. 107-56 (October 26, 2001), codified at 31 U.S.C. § 5318(h). 475 See 31 CFR § 103.170, as codified by interim final rule published at 67 FR 21110 (April 29, 2002, as amended at 

67 FR 67547 (November 6, 2002) and corrected at 67 FR 68935 (November 14, 2002). 

476 12/17/09 letter from Sidley Austin LLP to Subcommittee, PSI-Sidley Austin-01-000001-3. 477 Id. 478 Id. 

479 4/18/05 letter from U.S. Department of Justice to Sidley Austin Brown & Wood LLP, PSI-Sidley Austin-01-

000005. 

480 See Sidley Austin Trust Transaction Detail Report for 1/1/04 to 1/1/07 for the Republic of Equatorial Guinea and 

Minister Obiang, PSI-Sidley Austin-01-000006-7. 

481 12/17/09 letter from Sidley Austin LLP to Subcommittee, PSI-Sidley Austin-01-000001. 482 Id., at 2. This money was placed in escrow and used in Mr. Obiang’s second, ultimately successful attempt to 

purchase a Gulfstream jet in 2006, as explained below. 
87 

Mr. Obiang’s outstanding legal fees and accepted another $100,000 “as a retainer payment.”483 

The next day, December 22, 2005, at Mr. Obiang’s direction, Sidley Austin wire transferred 

$900,000 of his funds to West Coast Escrow.484 

Sidley Austin attempted to send the remaining funds, about $19.5 million, to 

Mr. Obiang’s personal bank account in Equatorial Guinea. On December 21, 2005, Sidley 

Austin sent a wire transfer of the funds to Societe Generale de Banques in Equatorial Guinea for 

Mr. Obiang’s account, but Societe General “did not approve the transfer.”485 A month later, on 

January 24, 2006, after obtaining a second letter from the U.S. Justice Department that the 

transfer did not violate U.S. AML laws, Sidley Austin sent a second wire transfer with the $19.5 

million to Societe General in Equatorial Guinea. That time, the bank accepted the transfer and 

credited the funds to Mr. Obiang’s account.486 

2006 Purchase Offer. In 2006, Mr. Obiang made a second attempt to purchase a 

Gulfstream aircraft, this time from an owner rather than the manufacturer. On February 23, 

2006, Ebony Shine International, Ltd., acting on behalf of Mr. Obiang, submitted a purchase 

offer to Blue Sapphire Services, Ltd. to buy a Gulfstream G-V jet airplane registered in the 

United States.487 Ebony Shine International, Ltd. is a British Virgin Islands (BVI) shell 

company. Mr. Obiang was represented in the transaction by a non-U.S. attorney, Duret 

Sieraczek-Abilan, also known as Eric Duret. 

Blue Sapphire Services, Ltd. is also a BVI shell corporation, that was used to facilitate 

the sale of the aircraft by the Bakrie family of Indonesia.488 The Bakrie family was represented 

in the transaction by a non-U.S. citizen referred to as Dick Brown. At the time of the transaction, 

the aircraft was registered with the Federal Aviation Administration (FAA) in Oklahoma City, 

but physically located in Singapore.489 Because U.S. registered aircraft require a U.S. registered 

owner, Blue Sapphire employed Wells Fargo Bank Northwest as the aircraft’s registered 

owner.490

                                                           

483 Id. 484 Id. See also 12/22/05 letter from Sidley Austin to Citibank Private Bank regarding the wire transfer, and several 

emails of the same date showing the transfer was completed, no bates numbers. The $900,000 was placed in escrow 

and later used in Mr. Obiang’s purchase of the Malibu residence, as explained earlier. 

485 Id. 486 Id. 487 The Gulfstream G-V is a high performance corporate-style jet airplane that seats up to sixteen passengers and 

crew, and has an ultra-long flight range of 6,500 nautical miles. It is manufactured in the United States by 

Gulfstream Aerospace Corp., a subsidiary of General Dynamics. The Gulfstream G-V can be used to transport 

senior government officials or corporate management, and serve military and homeland defense roles. See 

Gulfstream Aerospace Corp, News Release, November 6, 2008, http://www.gulfstream.com/news/releases/ 

2007/070618a.htm. 

488 Subcommittee staff interview with McAfee & Taft officials, 2/20/09. See also 2/23/06 Offer to Purchase from 

Ebony Shine International LTD, BSSL000001. 

489 As is common with foreign owners of U.S. registered aircraft, Blue Sapphire Services, Ltd. had entered into an 

owner-trustee relationship with Wells Fargo Bank N.A. to hold title of the aircraft to satisfy domestic ownership 

requirements for registration purposes. See also 2/23/05 Offer to Purchase from Ebony Shine International Ltd., 

BSSL000001. 

490 See 6/29/06 FAA Aircraft Bill of Sale and 8/16/06 letter from Wells Fargo canceling U.S. registration of the 

aircraft, PSI-Insured_Aircraft-01-0159-60. 
88 

McAfee & Taft, a U.S. company headquartered in Oklahoma City, initially acted as the 

escrow agent in the sale. According to McAfee officials, their company was chosen because it 

had assisted in the original purchase of the jet by Blue Sapphire Services, and so was familiar 

with the unique leasing structure used to finance that purchase.491

The February 2006 purchase offer proposed a total purchase price of $38.5 million 

payable in three installments to the escrow agent, consisting of an initial payment of $4.7 million 

at the time of the offer; a second payment of $10.3 million due at the pre-purchase inspection of 

the jet on or about March 25, 2006; and a final payment of $23.5 million upon delivery of the 

aircraft.492 The offer was signed by Mr. Duret on behalf of Ebony Shine International and by 

Irma Pujiastuti on behalf of Blue Sapphire Services.493 An escrow agreement, that was drafted 

but not signed by either party, indicated that all payments would be made to an escrow account at 

McAfee & Taft in Oklahoma City.494 

A second U.S. company, Insured Aircraft Title Services (IATS) of Oklahoma City, was 

selected to serve as the escrow agent for Ebony Shine International. On February 27, 2006, 

IATS sent an email to Eric Duret, the attorney representing Ebony Shine International, stating 

that IATS had received a deposit of about €3.9 million from Mr. Obiang to purchase the 

aircraft.495 The funds had been deposited into an IATS escrow account at UBS bank in London. 

Those funds were supposed to be transferred to the seller’s escrow agent, McAfee & Taft, 

which had its account at Bank of America in Oklahoma City.496 On March 6, 2006, however, 

Mr. Duret sent an email to McAfee & Taft, with a copy to Blue Sapphire’s representative, Dick 

Brown, requesting alternate wire arrangements: 

 “Further to Dick’s correspondence he has noted deposit to be made in a bank in 

Oklahoma [C]ity. 

The future owner of this plane is from an African origin and therefore it is complicated 

for him to make a wire transfer to the USA instead of Europe or to Asia. 

He presently hold[s] an account with UBS London. Would it be possible for you to 

manage this escrow account in London in order to proceed further with this transaction 

and guarantee our client interest.”497

McAfee & Taft replied the same day, stating: “We cannot manage an account with UBS 

London. With that said, the parties may choose to use another escrow agent for funds (possibly a 

London firm/company) and we would simply hold the documents in escrow.”498 Mr. Brown of 

Blue Sapphire Services, however, insisted on using McAfee & Taft as the escrow agent for the 

funds, sending the following email: 

                                                           

491 Subcommittee interview of McAfee & Taft officials, 2/20/09. 

492 2/23/06 Offer to Purchase, BSSL000001, 10-11. 

493 Id., at 03. 

494 Id., at 11. 

495 Id., at 04. 

496 Escrow Agreement, BSSL000054. 

497 3/6/06 email from Ms. Nasrallah, BSSL000093. 

498 3/6/06 email from McAfee & Taft, BSSL000145. 
89 

“As I advised from the outset of this transaction, the funds have to be in Escrow with 

MCAFEE & TAFT. We have no way of managing funds in overseas accounts. If your 

client has an account with UBS in London, he can transfer the funds from Africa to his 

UBS account in London, and from there it is a simple transaction to move the funds to 

McAfee & Taft. 

If you can’t have these funds moved into an Escrow acceptable to McAfee & Taft, then I 

don’t see how we are going to get this deal done.”499

On March 15, 2006, an internal McAfee & Taft email noted that the company had not 

received any funds regarding the Gulfstream purchase, and that Ebony Shine must “direct IATS 

to transfer the $3,912,504.94 to our escrow account.”500 On March 16, 2006, Mr. Brown emailed 

Mr. Duret to request the immediate transfer of the funds: 

“Eric, we have not received any advice from [McAfee & Taft] that they have received 

funds into Escrow despite your advice earlier in the week that the funds have been sent. 

This is very disturbing and it is a long way from your commitment.”501

Mr. Duret replied: 

“[F]unds will arrive on Wednesday. As I told you in my email of March 6th, my client is 

[of] African origin and therefore it is complicated for him to make a wire transfer to the 

USA. That’s the reason why the funds [are] not in your account. Please be patient.”502

McAfee & Taft Raises Patriot Act Concerns. After reviewing the IATS wire transfer 

documentation, McAfee & Taft became aware of Mr. Obiang’s involvement in the transaction.503 

It then researched Mr. Obiang, learned of his political status and reputation, and became 

concerned about the source of the funds he would be supplying to purchase the aircraft.504 

Although in 2002, the U.S. Treasury Department exempted U.S. businesses engaged in 

aircraft sales from requirements in the 2001 Patriot Act to establish AML programs, McAfee & 

Taft told the Subcommittee that it had voluntarily chosen to implement the Patriot Act’s AML 

safeguards to avoid facilitating transactions involving suspect funds.505 The 2006 escrow 

agreement to be used in the Gulfstream purchase, for example, stated that McAfee & Taft 

“maintains a Customer Identification Program (CIP) in accordance with the Patriot Act.”506 

McAfee & Taft told the Subcommittee that its CIP program required it to identify the officers 

and principals of the purchasing company, Ebony Shine International; to understand the source 

of the purchaser’s funds; and to ensure that the funds were sent from an account held in the name 

                                                           

499 3/6/06 email from Mr. Brown to Mr. Duret, BSSL000093. 500 3/15/06 internal McAfee & Taft email, BSSL000100. 501 6/16/06 email from Mr. Brown to Mr. Duret, BSSL000144. 502 3/17/06 email from Mr. Duret to Mr. Brown, BSSL000144. 503 Subcommittee interview of McAfee & Taft officials, February 20, 2009. 504 Id. 505 Id. 506 3/06 Escrow Agreement Draft 46, BSSL000205. 
90 

of the purchaser, Ebony Shine International, rather than from a parent, subsidiary, related 

company, officer, or director.507 

On March 19, 2006, McAfee & Taft sent an email to Mr. Brown and Mr. Duret stating: 

“We need some information to assure compliance with the U.S. Patriot Act. Funds must arrive 

from an account held in the name of Ebony Shine International, Ltd. (Ebony). We also need 

copies of Ebony’s formation documents, list of officers and principals and identity of the source 

of funds.”508

On March 23, 2006, IATS wire transferred about $4.7 million from its UBS account in 

London to a McAfee & Taft escrow account at Bank of America in Oklahoma City. An email 

from a McAfee employee stated that the funds were to be held pending further instruction from 

Teodoro Nguema Obiang.509 

McAfee & Taft sent an email to Mr. Brown confirming receipt of the funds but also 

noting: “The funds, until such time as a final escrow agreement is executed by all parties, [are] 

being held by us and subject to the discretion of the purchaser. We of course will not execute the 

escrow agreement until we are satisfied that the Patriot Act documentation is sufficient. We 

have not received any further documentation from Eric, since our last meeting.”510 

McAfee & Taft and Mr. Brown sent multiple emails to Mr. Duret and his assistant, 

Christine Nasrallah, in an attempt to obtain the information about Ebony Shine International and 

the source of its funds to satisfy the company’s compliance with the Patriot Act.511 On March 

30, 2006, Mr. Brown sent the following email to Mr. Duret: 

“We are approaching the end of another week, and nothing has been done by you to 

enable compliance with the Patriot Act. I have sent you several emails on this matter and 

have not even had the courtesy of a reply. 

As explained to you previously, because you have not complied with the requirements of 

the Patriot Act, we do not have a deposit as required under the Sale and Purchase 

Agreement. The fact that you have actually transferred the funds to the Escrow Account 

has no meaning if you are unable to comply with the Patriot Act. 

In the absence of a constructive reply from you by return, we will have to assume that 

you no longer wish to continue with this transaction.”512

Ignoring the McAfee & Taft requests for additional customer information, Mr. Obiang 

wire transferred $10.3 million from his account in Equatorial Guinea to the McAfee & Taft 

escrow account at Bank of America in Oklahoma City, in three installments: 

                                                           

507 See 3/06 Escrow Agreement Draft 46, BSSL000205; and 3/19/06 email from McAfee & Taft to Mr. Brown and 

Mr. Duret, BSSL000159. 

508 3/19/06 email from McAfee & Taft to Mr. Brown and Mr. Duret, BSSL000159. 

509 See 3/23/06 email from McAfee & Taft, BSSL000222; 3/23/06 email from McAfee & Taft to Mr. Brown, 

BSSL000223; 3/24/06 email from McAfee & Taft to Mr. Brown, BSSL000226. 

510 3/24/06 email from McAfee & Taft to Mr. Brown, BSSL000226, see also 3/06 Escrow Agreement Draft 46, 

BSSL000205. 

511 See 3/17/06 - 3/28/06 emails between McAfee & Taft, Mr. Brown, and Mr. Duret, BSSL000230-235. 512 3/30/06 email from Mr. Brown to Duret, BSSL000238. 
91 

On April 4, 2006, Mr. Obiang wired $2,575,000 to the McAfee & Taft escrow account. 

The originating institution was Societe Generale De Banque (SGDB) in Equatorial 

Guinea.513

On April 6, 2006, he wired another $2,575,000 from SGDB to the McAfee & Taft escrow 

account.514

On April 7, 2006, Mr. Obiang wired $5,150,000 from SCDB to the McAfee & Taft 

escrow account in Oklahoma City.515

In each case, the funds moved from his bank in Equatorial Guinea to a correspondent 

account at Wachovia Bank which then transferred the funds to Bank of America in Oklahoma 

City. The plan was that, once the sale of the jet was complete, the funds would move from the 

McAfee & Taft escrow account at Bank of America to an account for the benefit of the seller, 

Blue Sapphire.516 

On April 7, 2006, Mr. Duret’s assistant, Ms. Nasrallah, wrote to Mr. Brown about the 

$10.3 million that had been transferred to the U.S. escrow account as follows: 

“The 1st and 2nd settlements of $2,175,000.00 each were transferred to the credit of 

[McAfee & Taft’s] account value April 6th, 2006 and the 3rd $5,150,000.00 value April 

7th. ... We have contacted the Wells Fargo Bank re the compliances of Patriot Act. 

Taking into account the difficulties linked with their client’s political activities, we have 

decided not to proceed with a U.S. registration but to go for a registration in the Caymand 

[sic] Islands or Bermuda.”517

On April 7, 2006, Mr. Brown responded with an email to Mr. Duret, Ms. Nasrallah, 

McAfee & Taft, and others: 

“We seem to have reached an impass[e] on the Patriot Act compliance. ... The buyer 

has decided to take the aircraft off the US Register because they feel that complying with 

the requirements of the Patriot Act for Well[s] Fargo will take too long. ... We are just 

about at the stage where we will have to either restructure this sale to take it entirely 

outside the Patriot Act (i.e. we sell it to one of their associates in Singapore, and accept 

payment there).”518

Minutes later, McAfee & Taft replied: 

“I just want to make sure everyone is on the same page and aware that for us to continue 

to hold the funds I must be provided with the Patriot Act due diligence by Monday 

morning. ... [I]f I don’t have the information or if I am in anyway unsure, I will wire the 

                                                           

513 4/5/06 wire transfer record, BSSL000254. 514 Id., at BSSL000255. 515 4/6/06 wire transfer record, BSSL000258. 516 Wells Fargo was the appointed trustee for Blue Sapphire. See 7/26/06 Escrow Agreement, PSI-Insured_Aircraft01-0196-205. 

517 4/7/06 email Ms. Nasrallah to Mr. Brown, Mr. Duret, McAfee & Taft, BSSL000259. 518 4/7/06 email from Mr. Brown to McAfee & Taft, Mr. Duret, and other others, BSSL000279. 
92 

funds back to the account of the party sending said funds to us. Or we can wire the funds 

back to IATS if they are willing to act as escrow agent. 

The parties could use the same form of escrow agreement with IATS.”519

Five days later, on April 12, 2006, having received no information from Ebony Shine 

International, McAfee & Taft cancelled the transaction and returned the funds that had been 

provided to them to purchase the Gulfstream jet. McAfee & Taft told the Subcommittee that it 

expected an angry phone call from Mr. Duret, but received no further communication from 

him.520 On April 12, 2006, McAfee & Taft sent three wire transfers totaling $10,299,950.00 to 

Mr. Obiang in Equatorial Guinea and one wire transfer for $4,723,262.22 to IATS at UBS in 

London.521 These amounts corresponded to the “initial payment” and “second payment” 

amounts specified in the draft escrow agreement, less fees. 

IATS Steps In. After McAfee & Taft declined to complete the transaction without 

information on the source of the $38.5 million being provided to purchase the Gulfstream jet, 

IATS stepped in, agreeing to serve as escrow agent for the transaction and to facilitate the 

purchase of the jet by Mr. Obiang’s company. 

On April 20, 2006, Ms. Nasrallah sent an email to IATS noting that “the transaction was 

cancelled via Mcafeetaft” and requesting IATS to open an escrow account in the name of “Blue 

Sapphire (NGUEMA).”522 Later that day, IATS sent Mr. Duret a confirmation that it had 

deposited $4.7 million into an IATS escrow account at UBS Bank in London for “Blue Sapphire 

Services LTD (Nguema).”523 Mr. Duret subsequently provided IATS with a Power of Attorney 

form, signed by Mr. Obiang, in which Mr. Obiang authorized Mr. Duret to represent him in the 

purchase of the aircraft.524 

Two weeks later, on May 4, 2006, Mr. Brown emailed Mr. Duret and Ms. Nasrallah to 

warn them “if the deposit held by IATS is not made non refundable (in accord with the Purchase 

Agreement) and confirmed as non refundable by IATS, by close of business tomorrow Friday 

May 5, then we will have to abort the sale to your client.”525 The next day, on May 5, 2006, 

Mr. Brown wrote: 

“It is good to hear that your client still wants to buy the aircraft, and we are still interested 

to sell him the aircraft, but weeks go by and there is no progress and no action from your 

side. We can understand the problems that have occurred with the banking, but not the 

long periods on no action by your side were the major contributor to the banking 

problems. 

Your client has indeed sent the US$4,700,000 back to [IATS] however the funds are still 

held by IATS for the account of your clients, and not for the escrow account of Blue 

                                                           

519 4/7/06 email from McAfee & Taft, BSSL000280. 520 Subcommittee interview of McAfee & Taft officials, February 20, 2009. 521 4/11/06 internal McAfee & Taft email, BSSL000331; 4/12/06 Bank of America wire transfer record, 

BSSL000335-38. 

522 4/19/06 email from Ms. Nasrallah to IATS, PSI-Insured_Aircraft-01-0222. 523 4/20/06 IATS Deposit Confirmation, PSI-Insured_Aircraft-01-0229. 524 4/20/06 Bordreau De Transmission, PSI-Insured_Aircraft-01-0226-28. 525 5/4/06 email from Mr. Brown to Mr. Duret and Ms. Nasrallah, PSI-Insured_Aircraft-01-0258. 
93 

Sapphire in accordance with the Purchase Agreement. Your client still has total control 

over these funds, we do not have them. 

The Pre Purchase inspection can be scheduled as soon as the funds are moved into 

escrow on a non refundable basis in accordance with the terms of the Purchase 

Agreement. 

Please contact Eric by phone today to get this matter resolved.”526

Mr. Brown sent a second email on May 5, 2006, as follows: 

“As explained in my earlier email the US$4,700,000 is in the IATS Escrow Account and 

is being held for the Credit of your client. ... We can be patient while all the other 

problems are sorted out, but we must have the US$4,700,000 made non refundable in 

accordance with the terms of the Sale and Purchase Agreement. ... I would suggest you 

contact Fred Weissmann and arrange for Jet Aviation to advise you on this matter and 

assist you in completing this transaction. They are experts in these matters and can help 

you get this transaction finalized.”527

 On May 9, 2006, Ms. Nasrallah sent an email stating: “The management of the aircraft 

will be done by Jet Aviation in accordance to the instructions of the buyer.”528 

That same day, Mr. Obiang sent the second installment of $10.3 million to purchase the 

aircraft, using three wire transfers to do so. Each transfer was sent from an Obiang account at 

Societe Generale De Banque in Equatorial Guinea to the IATS account at UBS in London. On 

May 9, 2006, UBS notified IATS that $2,574,975 had arrived from Banque De France by order 

of Mr. Obiang.529 This email clearly disclosed Mr. Obiang’s involvement in the aircraft sale. On 

May 10, 2006, UBS received an additional $5,149,975 from Banque De France by order of Mr. 

Obiang.530 And again, on May 11, 2006, another $2,574,975 was sent from Banque De France 

by order of Mr. Obiang.531 At that point, IATS held about $15 million in its escrow account at 

UBS in London. 

On May 18, 2006, IATS notified Mr. Brown of Blue Sapphire Services and Mr. Duret of 

Ebony Shine International, among others, that IATS was in possession of the first and second 

payments specified in the draft escrow agreement for the purchase of the jet.532

Seller Invokes Patriot Act. On May 23, 2006, Mr. Brown sent an email to Mr. Duret 

notifying him that the seller of the aircraft, Blue Sapphire, wanted a legal opinion that the 

proposed purchase was not subject to provisions of the Patriot Act: 

                                                           

526 5/5/06 email from Mr. Brown to Ms. Nasrallah and Mr. Duret, PSI-Insured_Aircraft-01-0257. 527 5/5/06 email from Mr. Brown to Mr. Duret and Ms. Nasrallah, PSI-Insured_Aircraft-01-0250. 528 5/9/06 email from Ms. Nasrallah to Mr. Brown, PSI-Insured_Aircraft 01-0265; see also 5/9/06 email from Ms. 

Nasrallah to Mr. Brown, PSI-Insured_Aircraft-01-0268. 

529 5/5/06 email from UBS to IATS, PSI-Insured_Aircraft-01-0275. 530 5/10/06 email IATS to UBS, PSI-Insured_Aircraft-01-0264. 531 5/11/06 email from UBS to IATS, PSI-Insured_Aircraft-01-0276. 532 5/18/06 email from IATS to Mr. Brown, PSI-Insured_Aircraft-01-0281. 
94 

“The owner of the GV is very concerned that this sale to your client is not in compliance 

with the Patriot Act. As such he requires a Legal Opinion from IATS’s Counsel that the 

transaction as structured by IATS is not subject to the provisions of the Patriot Act, or if 

it is, that all requirements of the Patriot Act have been complied with.”533

Wells Fargo Bank Northwest, which acted as Blue Sapphire’s U.S. registered owner of the 

aircraft, normally complied with the Patriot Act’s AML provisions and wanted a legal 

determination as to whether the $38.5 million being paid in the sale was subject to a due 

diligence review to evaluate the source of the funds. 

Ms. Nasrallah responded with an email on May 31, 2006, arguing that the Patriot Act was 

not applicable to the transaction: 

“Please allow me to pinpoint the following points: the client is Indonesian, the sale will 

take place in Singapore between 2 [BVI] companies out of which one is detained by an 

African, the guarantee is based in London, both intermediaries (you and me) are non US 

Citizens. Based on the above, could you please explain to me how an American law can 

be applied to this contract knowing that the plane has already been re-registered at the 

Cayman Islands?”534

 Despite this email, the escrow agreement had been revised to require the purchaser to 

provide a legal opinion that the transaction was exempt from the Patriot Act.535 On June 9, 2006, 

William J. Robinson, an Oklahoma City attorney, provided the requested legal opinion to Blue 

Sapphire, Ebony Shine International, IATS, and Wells Fargo Bank. He wrote in part: 

“In accordance with Paragraph 4 of the June 5, 2006 Aircraft Sale and Purchase 

Amendment Agreement herein relative to the applicability of the Uniting and 

Strengthening America By Providing Appropriate Tolls Required to Intercept and 

Obstruct Terrorism (USA Patriot Act) Act Of 2001 thereto, you are advised that while the 

transaction may not be specifically ‘exempt’ from same, it is my opinion, subject to 

qualification hereinafter expressed, that nothing in said Act prevents the parties hereto, or 

their agents, from consummating the purchase and sale or identifies the transaction as a 

violation of said Act.”536

On June 27, 2006, Mr. Robinson provided a supplemental legal opinion further 

explaining his reasoning. First, he observed that IATS was not a “financial institution” as 

defined in the Patriot Act.537 Second, he noted that it was the banks that were wiring funds in 

connection with the transaction that were subject to the Patriot Act.538 Finally, he stated that the 

two banks that would be involved with completing the sale, Wells Fargo Bank and the 

International Bank of Commerce, were both in compliance with the Patriot Act.539

                                                           

533 5/23/06 email from Mr. Brown to Mr. Duret, PSI-Insured_Aircraft-01-0328. 534 5/31/06 email from Ms. Nasrallah to Mr. Brown, PSI-Insured_Aircraft-01-0327. 535 See 5/6/06 Escrow Agreement, PSI-Insured_Aircraft-01-0326. 536 6/9/06 legal opinion, PSI-Insured_Aircraft-01-0299. 537 6/27/06 legal opinion, PSI-Insured_Aircraft-01-0309. 538 Id. 

539 Id. International Bank of Commerce administered IATS’ escrow accounts in the United States. 
95 

Apparently this legal analysis was sufficient for Wells Fargo and International Bank of 

Commerce to accept the funds supplied by Mr. Obiang in his purchase of the jet. 

Purchase Completed. On June 26, 2006, Mr. Brown emailed IATS that the “full 

amount of funds were in escrow with IATS” to complete the sale of the aircraft.540 On June 27, 

2006, Mr. Brown forwarded a revised escrow agreement to IATS. The revisions included 

identifying IATS instead of McAfee & Taft as the escrow agent for the buyer’s funds, specifying 

that the escrow account was at UBS London, and deleting the requirement that the escrow agent 

maintain a Customer Identification Program in compliance with the Patriot Act.541 On June 28, 

2006, Mr. Obiang and Blue Sapphire Services, Ltd. executed a final Escrow Agreement and 

Instructions to Fund the purchase of the aircraft.542 

The following charts summarize the source of the $38.5 million used to purchase the 

aircraft and what happened to the funds.543 Essentially, the funds were provided by Mr. Obiang 

from his personal account in Equatorial Guinea. Because his payments were in U.S. dollars, they 

went through several correspondent accounts, including Wachovia Bank in the United States, 

before arriving at the IATS account at UBS in London.544 Once IATS received the funds, it 

divided the purchase price among five parties. It wire transferred the largest amount, over $27 

million to PMA Capital Management, an escrow agent based in the Cayman Islands with an 

affiliate in Hong Kong, which used the funds to pay off an outstanding mortgage on the 

aircraft.545 IATS wire transferred the next largest amount, over $11 million, to a Blue Sapphire 

account at Credit Suisse in Singapore. Since the funds were in U.S. dollars, they went through 

Credit Suisse’s U.S. dollar correspondent account at Bank of New York. IATS then transferred 

about $22,000 to its U.S. account at International Bank of Commerce in Oklahoma as its escrow 

fee, and sent additional amounts to two lawyers.546 

                                                           

540 6/26/06 email from Mr. Brown to IATS, BSSL000339. 541 See Escrow Agreement, PSI-Insured_Aircraft-01-0196-205; Escrow Agreement Draft 46, BSSL000204-213; and 

6/28/06 Escrow Agreement, PSI-Insured_Aircraft-01-0313 

542 6/28/06 Escrow Agreement, BSSL000364-366. 543 See Escrow Worksheet, PSI-Insured_Aircraft-01-0182; list of transaction parties, PSI-Insured_Aircraft-01-0202; 

6/16/06 email from UBS to IATS, PSI-Insured_Aircraft-01-0306; 5/10/06 email from UBS to IATS, PSIInsured_Aircraft-01-0264; and 5/11/06 email from UBS to IATS, PSI-Insured_Aircraft-01-0276. 

544 See chart in next section identifying the transfers. 545 See, e.g., 6/29/06 FAA Release and Disclaimer, signed by PMA Capital Management Ltd, PSI-Insured_Aircraft01-0161. 

546 See 4/20/06 Escrow Report, PSI-Insured_Aircraft-01-0225; Subcommittee interview of IATS, December 17, 

2009. 
96 

FUNDS SENT TO IATS ACCOUNT AT UBS LONDON

IN 2006 AIRCRAFT SALE

Date Amount Originating Institution Through Beneficiary Bates

4/13/06 $4,723,262.22 McAfee & Taft Escrow Account at

Bank of America

(returning Obiang funds)

Insured Aircraft

Title Service,

Inc.

BSSL0003321, 38

5/9/06 $2,574,975.00 Teodoro Obiang Account at

Societe Generale de Banque ‐

Equatorial Guinea

Bank of Central

African States 

Banque De France

Insured Aircraft

Title Service, Inc

BF‐G‐0025, 26

5/11/06 $5,149,975.00 Teodoro Obiang Account at

Societe Generale de Banque ‐

Equatorial Guinea

Bank of Central

African States 

Banque De France

Insured Aircraft

Title Service, Inc

BF‐G‐0028, 29

5/12/06 $2,574,975.00 Teodoro Obiang Account at

Societe Generale de Banque ‐

Equatorial Guinea

Bank of Central

African States 

Banque De France

Insured Aircraft

Title Service, Inc

BF‐G‐0031, 32

6/13/06 $7,833,308.33 Teodoro Obiang Account at

Societe Generale de Banque ‐

Equatorial Guinea

Bank of Central

African States 

Banque De France

Insured Aircraft

Title Service, Inc

BF‐G‐0034, 35

6/13/06 $7,833,308.33 Teodoro Obiang Account at

Societe Generale de Banque ‐

Equatorial Guinea

Bank of Central

African States 

Banque De France

Insured Aircraft

Title Service, Inc

BF‐G‐0037, 38

6/19/06 $7,833,308.33 Teodoro Obiang Account at

Societe Generale de Banque ‐

Equatorial Guinea

Bank of Central

African States 

Banque De France

Insured Aircraft

Title Service, Inc

BF‐G‐0040, 41

    TOTAL‐ $38,523,112.21    Source:  Wachovia and McAfee & Taft

FUNDS DISBURSED FROM IATS ACCOUNT AT UBS LONDON

IN 2006 AIRCRAFT SALE

Date Funds Sent To Account Amount Bates

6/29/06 PMA Capital Management Ltd. HSBC account in Hong Kong

(through a US dollar

correspondent account at

HSBC in New York)

$27,238,963.17 BSSL000347

6/29/06 Blue Sapphire Services, Ltd. Credit Suisse account in Singapore

(through a US dollar  

correspondent account at

Bank of New York)

$11,232,011.83 BSSL000347

6/29/06 Insured Aircraft Title Services, Ltd. International Bank of Commerce

account in Oklahoma

$        22,525.00 BSSL000347

6/29/06 Clifford Chance, LLP HSBC account in Hong Kong

(through a US dollar

correspondent account

at HSBC in New York)

$          6,500.00 BSSL000347

6/30/06 WJ Robin Account information not available $          4,000.00 PSI‐Insured_

Aircraft‐01‐0225

Source:  McAfee & Taft                                              TOTAL‐ $38.504,000.00

Charts prepared by Subcommittee

On June 28, 2006, Mr. Obiang signed a Form of Acceptance acknowledging receipt of 

the Gulfstream G-V jet airplane, as well as a memorandum verifying completion of the aircraft 

inspection.547 In a subsequent email, Mr. Brown requested a 48 hour hold on the Transfer of 

                                                           

547 6/28/06 inspection memorandum, BSSL000368; 6/28/06 Form of Acceptance Certificate, BSSL000369. 
97 

Title to allow the jet to be flown from Singapore to Basel, Switzerland.548 Documents reviewed 

by the Subcommittee indicate that the jet was registered in the Cayman Islands under the 

management of a private company, Jet Aviation, using registration Tail No. VP-CES.549 Other 

documentation obtained by the Subcommittee indicates that, in June 2006, Mr. Obiang was 

looking for space in an aircraft hangar in California to house a private jet.550

Flight records reviewed by the Subcommittee for Mr. Obiang’s Gulfstream G-V aircraft 

show that over the last two and a half years, from March 2007 through November 2009, 

Mr. Obiang’s aircraft has arrived and departed from the United States thirty-five times.551 These 

flights have originated or departed from a variety of countries, including Bermuda, Brazil, the 

Dominican Republic, Dubai, France, and Switzerland. Common locations in the United States 

were airports at Los Angeles, Miami, New Jersey, Tucson, and Yuma, a small airport in Arizona 

near the Mexican border. 

Analysis. Mr. Obiang’s 2006 purchase of the Gulfstream jet involved multi-milliondollar funding transfers across international lines to and from the escrow agents retained by the 

buyer and seller. The seller’s original escrow agent, McAfee & Taft, as an AML precaution, 

asked for information on the source of the $38.5 million sent to its escrow account in the United 

States. When Mr. Obiang’s associates refused to disclose the source of the funds, McAfee & 

Taft declined to complete the transaction and returned the funds it had been given. In contrast, 

its competitor IATS chose not to question the source of the funds, but to facilitate the purchase. 

In addition, none of the banks who administered accounts for the escrow agents stopped 

the transfers. The banks were relying on the escrow agents themselves to police their clients, but 

under current law, U.S. escrow agents selling multi-million-dollar aircraft have no legal 

obligation to know their customers, evaluate the source of the funds used in aircraft purchases, or 

take special precautions when dealing with PEPs. Because of this gap in U.S. AML law, 

Mr. Obiang was able to send $38.5 million in suspect funds into the United States to purchase 

the Gulfstream jet. To prevent similar suspect sales of aircraft in the future – as well as sales of 

luxury automobiles, yachts, and other high-end vehicles using escrow accounts – escrow agents 

need to be required to establish AML programs. 

E. Obiang Use of U.S. Wire Transfer Systems To Move Millions 

 of Dollars in Suspect Funds 

In addition to making use of U.S. lawyers, real estate and escrow agents, Mr. Obiang has 

made frequent use of U.S. wire transfer systems to bring millions of dollars in suspect funds 

from Equatorial Guinea into the United States. He has used these EG wire transfers to send 

funds, not only to U.S. bank accounts that he controlled or utilized, but also to purchase U.S. 

goods and services and transact other business in the United States. Mr. Obiang has been able to 

utilize U.S. wire transfer systems because major U.S. banks that provide correspondent accounts 

                                                           

548 6/28/06 email from Mr. Brown, BSSL000372. 

549 7/6/06 email from Mr. Brown, PSI-Insured_Aircraft-01-0184; 10/7/07 email from Jet Aviation to Ms. Romo, 

SEN006229. 

550 6/7/06 fax from Mr. Nagler, SEN011075; 6/7/06 email from Ms. DeHaven to Mr. Nagler, SEN011096. 551 See 1/6/10 letter from Customs and Border Protection (CBP) to the Subcommittee, with attached flight records, 

PSI-CBP-01-00001-03. CBP began tracking flight information for private aircraft in 2007. 
98 

to foreign banks have not established procedures which would allow them routinely to detect, 

block, and analyze high-dollar wire transfers sent by PEPs from high-risk jurisdictions. 

Two examples illustrate the problem: over a two-month period in 2006, Mr. Obiang was 

able to move $73 million from Equatorial Guinea into the United States using wire transfer 

systems operated by Wachovia Bank; and over a four-year period from 2002 to 2006, he was 

able to move $37 million through wire transfer systems operated by Citibank. 

(1) $73 Million Wired Through Wachovia Bank 

In just over two months, from April 5, 2006 to June 19, 2006, Mr. Obiang was able to 

complete fourteen wire transfers that brought more than $73 million in suspect funds from 

Equatorial Guinea into the United States through a Banque de France correspondent account at 

Wachovia Bank.552 Mr. Obiang used these funds to complete the purchase of the $30 million 

Malibu residence and the $38.5 million Gulfstream G-V jet airplane described earlier in this 

section.553 

This section has already examined the roles of the real estate and escrow agents and their 

banks in those transactions; this section takes the next step and examines the role of the U.S. 

banks that provide correspondent accounts that serve as gateways into the U.S. financial system 

for foreign banks sending wire transfers on behalf of their customers. Such correspondent 

accounts are not the final destination of the funds sent by wire transfer, but serve as intermediary 

accounts that link the originator of the wire transfer to its final beneficiary. Normally, U.S. 

correspondent accounts automatically transmit numerous wire transfers each day, and the funds 

represented by the wire transfers remain only briefly in the correspondent accounts. However, 

all U.S. banks are equipped with interdiction software that can detect and block wire transfers 

bearing particular names or countries to meet the requirements of U.S. law, such as prohibitions 

against transmitting wire transfers for terrorists, narcotics traffickers, and other criminals 

specified on OFAC lists or for countries against which the United States has imposed trade 

sanctions. This interdiction software has rarely been employed, however, in the battle to keep 

foreign corruption outside of the United States. 

The $73 million in wire transfers sent through Wachovia’s correspondent account in the 

spring of 2006, occurred nearly two years after this Subcommittee held a hearing and released a 

well-publicized report describing how EG officials including Mr. Obiang, had used accounts at 

Riggs Bank to move suspect funds. Related criminal and regulatory investigations led to a $16 

million criminal fine, a $25 million civil fine, and the sale of Riggs Bank.554 The report also 

sparked tougher oversight by Federal regulators of bank procedures to combat money laundering 

and foreign corruption, including by PEPs. 

Wachovia told the Subcommittee that, in response to the Subcommittee’s investigation, 

in 2005, the bank had designated Equatorial Guinea as a high-risk jurisdiction in its “enterprise-

                                                           

552 4/5/06 – 6/19/06 Integrated Funds Transfer System, History Transaction Listings, BF-G-00001-56 (Sealed 

Exhibit). 

553 $44,099,999.99 was wired to McAfee & Taft and Insured Aircraft Title Services, Ltd. for escrow and title 

services related to the purchase of Gulfstream G-V S/N 669; and $29,542,000.00 was wired to First American Title 

Company for the purchase of 3620 Sweetwater Blvd., Malibu, CA. 

554 Associated Press, “Final Chapter Nears in Riggs Bank Drama,” March 29, 2005. 
99 

wide list.”555 Wachovia also told the Subcommittee that it considered Mr. Obiang to be a senior 

foreign political figure whose financial activities required enhanced due diligence.556 

Nevertheless, Wachovia failed to identify or stop the $73 million in wire transfers that passed 

through the bank from April to June 2006. Each of these fourteen wire transfers involved a 

minimum of $2 million, referenced Mr. Obiang on the wire transfer documentation, and showed 

the funds originating from a bank in Equatorial Guinea, but Wachovia’s interdiction software did 

not block any of the transfers. In each case, Wachovia had relied on its client – Banque De 

France, the foreign bank transmitting the funds to the United States – to ensure that it was not 

transmitting suspect funds. This case history shows that reliance was not well placed. 

In January 2007, the Foreign Corruption Unit of the U.S. Immigration and Customs 

Enforcement (ICE) division alerted Wachovia to Mr. Obiang’s wire activity through the bank 

during the prior year, directing Wachovia’s attention to the Banque De France correspondent 

account.557 Even after receiving this warning, however, Wachovia did not place the Banque De 

France correspondent account under any additional scrutiny, or take steps to restrict wire 

transfers bearing Mr. Obiang’s name.558 

After the 2006 wire transfers involving the $73 million, Mr. Obiang did not openly use 

the Wachovia wire transfer system for over a year. Then, in 2008, he struck again. In response 

to a Subcommittee inquiry seeking Obiang-related financial records, Wachovia conducted a 

search of its wire transfer records and found that, in February and July of 2008, Mr. Obiang had 

sent two wire transfers totaling about $145,000 from his personal account at a bank in Equatorial 

Guinea, through Fortis Bank, a French bank with a correspondent account at Wachovia, to 

accounts at other banks in the United States.559 Wachovia had again served as the gateway into 

the United States for his suspect funds. 

 This chart summarizes the Obiang wire transfers that were sent through foreign bank 

correspondent accounts at Wachovia from 2006 to 2008, and enabled Mr. Obiang to bring $73 

million in suspect funds into the United States. 

OBIANG WIRE TRANSFERS THROUGH WACHOVIA

2006‐2008  

Date Amount Originating

Institution

Through Beneficiary Bates

4/05/06 $2,575,000.00 Teodoro Obiang

Account at Societe

Generale de Banque ‐

Equatorial Guinea

Bank of Central African

States  Banque De

France  Wachovia

McAfee &Taft account

at Bank of America

BF‐G‐00001‐03

4/05/06 $5,908,400.00 Teodoro Obiang

Account at Societe

Generale de Banque ‐

Equatorial Guinea

Bank of Central African

States  Banque De

France  Wachovia

First American Title

Company at First

American Trust, F.S.B.

BF‐G‐00004‐06

                                                           

555 Subcommittee interview of Wachovia Bank officials, 2/6/09; PSI-WACHOVIA-10-0007. 556 Subcommittee interview of Wachovia Bank officials, 2/6/09. 557 1/16/07 email from ICE to Wachovia, BF-F00007. 558 11/21/08 Wachovia’s written responses to Subcommittee questions, PSI-WACHOVIA-10-0004; Subcommittee 

interview of Wachovia Bank officials, 2/6/09. 

559 2/7/08-7/31/08 Wachovia Transaction Reports, BF-G-00043-56. Fortis Bank is affiliated with BNP Paribas. 
100 

4/10/06 $2,575,000.00 Teodoro Obiang

Account at Societe

Generale de Banque ‐

Equatorial Guinea

Bank of Central African

States  Banque De

France  Wachovia

McAfee &Taft account

at Bank of America

BF‐G‐00007‐09

4/10/06 $5,908,400.00 Teodoro Obiang

Account at Societe

Generale de Banque ‐

Equatorial Guinea

Bank of Central African

States  Banque De

France  Wachovia

First American Title

Company at First

American Trust, F.S.B.

BF‐G‐00010‐12

4/10/06 $5,150,000.00 Teodoro Obiang

Account at Societe

Generale de Banque ‐

Equatorial Guinea

Bank of Central African

States  Banque De

France  Wachovia

McAfee &Taft account

at Bank of America

BF‐G‐00013‐15

4/19/06 $5,908,400.00 Teodoro Obiang

Account at Societe

Generale de Banque ‐

Equatorial Guinea

Bank of Central African

States  Banque De

France  Wachovia

First American Title

Company at First

American Trust, F.S.B.

BF‐G‐00016‐18

4/21/06 $5,908,400.00 Teodoro Obiang

Account at Societe

Generale de Banque ‐

Equatorial Guinea

Bank of Central African

States  Banque De

France  Wachovia

First American Title

Company at First

American Trust, F.S.B.

BF‐G‐00019‐21

4/26/06 $5,908,400.00 Teodoro Obiang

Account at Societe

Generale de Banque ‐

Equatorial Guinea

Bank of Central African

States  Banque De

France  Wachovia

First American Title

Company at First

American Trust, F.S.B.

BF‐G‐00022‐24

5/09/06 $2,575,000.00 Teodoro Obiang

Account at Societe

Generale de Banque ‐

Equatorial Guinea

Bank of Central African

States  Banque De

France  Wachovia

Insured Aircraft Title

Service account at UBS

London

BF‐G‐00025‐27

5/11/06 $5,150,000.00 Teodoro Obiang

Account at Societe

Generale de Banque ‐

Equatorial Guinea

Bank of Central African

States  Banque De

France  Wachovia

Insured Aircraft Title

Service account at UBS

London  

BF‐G‐00028‐30

5/12/06 $2,575,000.00 Teodoro Obiang

Account at Societe

Generale de Banque ‐

Equatorial Guinea

Bank of Central African

States  Banque De

France  Wachovia

Insured Aircraft Title

Service account at UBS

London

BF‐G‐00031‐33

6/13/06 $7,833,333.33 Teodoro Obiang

Account at Societe

Generale de Banque ‐

Equatorial Guinea

Bank of Central African

States  Banque De

France  Wachovia

Insured Aircraft Title

Service account at UBS

London

BF‐G‐00034‐36

6/13/06 $7,833,333.33 Teodoro Obiang

Account at Societe

Generale de Banque ‐

Equatorial Guinea

Bank of Central African

States  Banque De

France  Wachovia

Insured Aircraft Title

Service account at UBS

London

BF‐G‐00037‐39

6/19/06 $7,833,333.33 Teodoro Obiang

Account at Societe

Generale de Banque ‐

Equatorial Guinea

Bank of Central African

States  Banque De

France  Wachovia

Insured Aircraft Title

Service account at UBS

London

BF‐G‐00040‐42

2/06/08 $   144,017.99 Teodoro Obiang

Account at CCEI Bank GE

Fortis Bank  Wachovia Tia Ping Carpets account

at Wachovia

BF‐G‐00050‐56

7/30/08 $       1,458.51 Teodoro Obiang

Account at CCEI Bank GE

Fortis Bank  Wachovia Eulalia Salome Obono

Nze account at Wachovia

BF‐G‐00043‐49

Total‐ $72,687,476.49   Source‐ Wachovia

Chart prepared by Subcommittee
101 

Wachovia has advised the Subcommittee that as of January 2009, it has taken steps for 

the first time to restrict Mr. Obiang’s ability to wire funds through Wachovia’s wire transfer 

system.560 According to Wachovia, it has added Mr. Obiang and his family members to the 

bank’s pre-execution interdiction filter for wire clearing operations. Wachovia told the 

Subcommittee that any wires blocked by this software related to Mr. Obiang or his family would 

be scrutinized by funds transfer specialists for a determination of legitimacy, referred to antimoney laundering specialists where appropriate, and, if necessary, returned to the originating 

financial institution.561 Wachovia’s actions show that U.S. banks offering correspondent 

accounts to foreign banks can become powerful guardians of the gateways into the U.S. financial 

system and provide vital services in the battle to keep foreign corruption outside of the United 

States. 

(2) $37 Million Wired Through Citibank    

A second example of Mr. Obiang’s ability to take advantage of U.S. wire transfer 

systems involves wire transfers sent through Citibank. Wire transfer records reviewed by the 

Subcommittee indicate that, over a four-year period from 2002 to 2006, Mr. Obiang benefited 

from wire transfers sent through Citibank totaling in excess of $37 million.562 

Most of these wire transfers sent funds from Equatorial Guinea to the United States, 

drawing on accounts held by two Obiang companies, Somagui Forestal and Socage, or accounts 

held in the name of Mr. Obiang personally. Some of these wire transfers appear to have 

deposited substantial sums into Obiang-related accounts in the United States. For example, on 

July 11, 2003, $1.5 million was deposited into an Obiang account at Riggs Bank.563 On May 21, 

2004, $1 million was deposited into an account held by his company, TNO Entertainment, 

LLC.564 Other wire transfers appear to have been direct payments to U.S. high-end retail 

establishments, presumably to pay Obiang-related bills. For example, on September 23, 2004, 

Somagui Forestal wire transferred $97,588.05 to a Beverly Hills Porsche Audi dealership.565 

Payments also went to a U.S. yacht company, corporate jet service, high-end automobile dealers, 

and a luxury vacation retailer. Still other wire transfers, totaling nearly $2.5 million, appear to 

have been payments to satisfy American Express credit card charges.566

One of the wire transfers, for $19.5 million in January 2006, was sent by a U.S. law firm, 

Sidley Austin, to Mr. Obiang in Equatorial Guinea, returning funds that he had sent to an escrow 

account related to an attempted purchase of a Gulfstream jet, as explained earlier. Before 

initiating this wire transfer, Sidley Austin obtained a letter from the U.S. Department of Justice 

confirming that the funds transfer would not violate U.S. AML laws and there was no basis to 

restrain or freeze such proceeds at the time of transfer.567 

                                                           

560 Subcommittee interview of Wachovia Bank officials, 2/6/09. 561 Id. 562 2002-2006 wire transfer records, C00000065-116 (Sealed Exhibit). 563 7/11/06 wire transfer record, C00000116. 564 5/21/04 wire transfer record, C00000085. 565 9/23/04 wire transfer record, C00000105. 566 11/12/04 wire transfer record, C00000070; 7/14/04 wire transfer record, C00000075; 7/20/04 wire transfer 

record, C00000083. 

567 12/17/09 letter from Sidley Austin to the Subcommittee, PSI Sidley Austin 01-000001. 
102 

This chart summarizes the Obiang-related wire transfers that moved through Citibank 

from 2002 to 2006. 

OBIANG WIRE TRANSFERS THROUGH CITIBANK

2002‐2006

Date Amount Originator Through Beneficiary BATES

6/19/02 $150,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

City National Bank TNO Entertainment LLC C00000090

7/22/02 $50,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

City National Bank TNO Entertainment LLC C00000089

3/19/03 $33,638.28 Somagui Forestal

CCEI Bank GE  Citibank 

Bank of America

Timeshare Specialist – Mega

Yacht Services C00000088

3/19/03 $300,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

Riggs Bank T.N.O.   C00000087

7/11/03 $1,500,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

Riggs Bank Teodoro Nguema Obiang C00000116

9/17/03 $1,000,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

Riggs Bank Teodoro Nguema Obiang C00000086

3/9/04 $1,000,000.00 Socage

CCEI Bank GE  Citibank 

Riggs Bank Teodoro Nguema Obiang C00000068

3/15/04 $999,975.00 Socage  

CCEI Bank GE  Citibank 

City National Bank Teodoro Nguema Obiang C00000066

3/18/04 $500,000.00 Socage

CCEI Bank GE  Citibank 

Bank One

Gulfstream Aerospace

Corporation C00000067

5/6/04 $42,595.50 Somagui Forestal

CCEI Bank GE  Citibank 

First Arizona Savings Global Jet Corporation C00000078

5/21/04 $1,000,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

City National Bank

Teodoro Nguema Obiang

(TNO Entertainment LLC) C00000085

6/24/04 $1,000,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

Riggs Bank Teodoro Nguema Obiang C00000091

6/29/04 $30,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

California Bank and Trust

Pacific National

Construction C00000076

6/29/04 $50,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

Wells Fargo Bank Platinum Motors, LLC C00000072

7/7/04 $182,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

First Arizona Savings Global Jet Corporation C00000073

7/13/04 $1,000,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

City National Bank Teodoro Nguema Obiang C00000074

7/14/04 $999,975.00 Somagui Forestal

CCEI Bank GE  Citibank 

American Express

JPMorgan Chase  

American Express C00000075

7/20/04 $999,950.00 Somagui Forestal

CCEI Bank GE  Citibank 

American Express JPMorgan Chase  

American Express C00000083

8/4/04 $270,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

First Arizona Savings Global Jet Corporation C00000077
103 

8/24/04 $421,155.09 Somagui Forestal

CCEI Bank GE  Citibank 

Comerica Bank MILLER‐DM INC C00000071

8/24/04 $1,328,739.00 Somagui Forestal

CCEI Bank GE  Citibank 

Wells Fargo Bank JAMES W HARRIS C00000079

8/31/04 $397,594.21 Somagui Forestal

CCEI Bank GE  Citibank 

Bank of America O'Gara Coach, LLC C00000080

9/13/04 $297,490.00 Somagui Forestal

CCEI Bank GE  Citibank 

First National Bank Investment Cars (SA) C00000081

9/13/04 $250,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

First National Bank

Pearl Automotive PTY LTD

(SA) C00000082

9/16/04 $580,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

Wells Fargo Bank James W Harris C00000103

9/20/04 $230,400.00 Somagui Forestal

CCEI Bank GE  Citibank 

Bank of America Svetlana Safieva C00000108

9/22/04 $27,428.00 Somagui Forestal

CCEI Bank GE  Citibank 

Wells Fargo Bank Save‐On Insurance C00000107

9/23/04 $312,473.59 Somagui Forestal

CCEI Bank GE  Citibank 

COMERICA BANK Miller‐DM INC C00000106

9/23/04 $97,588.05 Somagui Forestal

CCEI Bank GE  Citibank 

Mercantile Bank

Beverly Hills Porche

Audi C00000105

10/7/04 $225,986.05 Somagui Forestal

CCEI Bank GE  Citibank 

First Arizona Savings Global Jet Corporation C00000104

10/28/04 $218,099.00 Somagui Forestal

CCEI Bank GE  Citibank 

First Arizona Savings Global Jet Corporation C00000109

11/12/04 $500,000.00 CCEIGQGQ

CCEI Bank GE  Citibank 

JPMorgan Chase American Express C00000070

11/17/04 $314,440.65 Somagui Forestal

CCEI Bank GE  Citibank 

First National Bank

Pearl Automotive PTY LTD

(SA) C00000102

11/30/04 $325,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

UBS AG G5 Executive AG C00000101

12/17/04 $50,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

First National Bank Teodoro Nguema Obiang C00000100

1/27/05 $274,610.00 Somagui Forestal

CCEI Bank GE  Citibank 

First National Bank Investment Cars (SA) C00000099

2/11/05 $75,000.00 Somagui Forestal

CCEI Bank GE  Citibank 

Mellon Bank ADT Security Services C00000098

2/28/05 $74,950.00 Somagui Forestal

CCEI Bank GE  Citibank 

Mellon Bank ADT Security Services C00000097

4/13/05 $599,069.46 Somagui Forestal

CCEI Bank GE  Citibank 

Comerica Bank Miller‐DM INC C00000096

5/9/05 $79,960.22 Somagui Forestal

Natexis Banques Populaires

 Citibank  Citi National

Bank TJB Gearys LLC C00000095

1/24/06 $19,570,635.18 Sidley & Austin

Citibank  Societe Generale

S.A. (NY)  Societe Generale

de Banque – Equatorial

Guinea

Account of Teodoro

Nguema Obiang C00000112
104 

2/23/06 $59,970.01 Somagui Forestal

Natexis Banques Populaires

 Citibank  Citi National

Bank Roland Sands Design Inc C00000094

2/23/06 $69,090.95 Somagui Forestal

Natexis Banques Populaires

 Citibank  Citi National

Bank Eve Jeffers C00000093

3/7/06 $157,794.68 Somagui Forestal

Natexis Banques Populaires

 Citibank  Citi National

Bank Paradise Island Vacations C00000092

6/16/06 $68,965.50 Socage

Natexis Banques Populaires

 Citibank  Citi National

Bank Eve Jeffers C00000065

TOTAL: $37,714,573.42 Source‐ Citigroup

Prepared by Subcommittee   

The transactions identified in this chart involve wire transfers that moved funds through a 

foreign bank correspondent account at Citibank on the way to an account at another bank. 

Citibank is a major provider of U.S. dollar correspondent accounts for foreign financial 

institutions, and often serves as an intermediary in wire transfers by foreign banks seeking to pay 

a beneficiary with U.S. dollars. According to Citibank, it screens all of its correspondent wire 

activity through real-time interdiction filters designed to comply with legal prohibitions on 

transmitting certain funds, such as funds transmitted by persons on the OFAC lists.568 

 Citibank told the Subcommittee that, although it is aware of Mr. Obiang’s PEP status and 

deliberate use of U.S. wire transfer systems to bring suspect funds into the United States, it 

currently does not plan to set up procedures to block his wire transfers and automatically refer 

them for analysis to its AML specialists.569 Citibank explained that any addition to its current 

blocking lists could result in thousands of false positives that would delay the completion of the 

affected wire transfers, and significantly increase the workload of its AML and compliance staff 

to clear the wire transfers that would be frozen as a result.570 Citibank also noted that, under 

existing law, it already conducts careful reviews of the foreign financial institutions for which it 

opens correspondent accounts and relies on those institutions to adequately screen their own 

customers. Citibank officials characterized the bank’s role in correspondent wire transfer 

transactions as extremely brief and expressed concern over any expectation that it be required to 

screen its customers’ customers. 

Analysis. Right now, U.S. banks that provide correspondent accounts to foreign banks 

do not generally screen the wire transfers that go through these accounts for high-dollar amounts 

sent by PEPs from high-risk countries. Adding such a requirement to U.S. AML and PEP 

controls would provide a powerful new weapon in the battle to keep foreign corruption out of the 

United States. 

                                                           

568 Subcommittee interview of Citibank officials, 4/24/2009. 

569 Id. 570 Id. 
105 

F. Conclusion 

 

 This case history shows how a controversial political figure, from the ruling family of a 

country plagued by corruption, moved vast amounts of wealth into the U.S. financial system, by 

employing American professionals such as attorneys, real estate and escrow agents to help him 

bypass U.S. AML and PEP controls, and by taking advantage of U.S. wire systems unequipped 

to screen out high-dollar transfers sent by PEPs from high-risk countries. Over a four year 

period, from 2004 to 2008, Teodoro Obiang was able to move over $100 million in suspect funds 

into or through the US. financial system. If the United States is to keep foreign corruption 

outside of its borders, U.S. AML and PEP safeguards have to be further strengthened, not only at 

U.S. financial institutions, but also at law firms, real estate agencies, and escrow companies. 
106 

 IV. BONGO CASE STUDY: USING LOBBYIST, FAMILY, AND 

 U.S. TRUST ACCOUNTS TO BRING SUSPECT FUNDS 

 INTO THE UNITED STATES 

El Hadj Omar Bongo Ondimba, the President of Gabon for 41 years until his death in 

June 2009, was long suspected of having accumulated his wealth through corruption. His eldest 

son, Ali Ben Bongo, assumed the office of the President of Gabon on October 16, 2009. For the 

ten years prior, he served as the Minister of Defense in Gabon. 

This case history shows how President Omar Bongo used a U.S. lobbyist to bring over 

$18 million in suspect funds into the U.S. financial system to purchase U.S.-built armored cars 

and to obtain U.S. government authorization to purchase U.S.-built C-130 aircraft to support his 

regime. President Omar Bongo also brought substantial amounts of cash into the United States, 

including $1 million to support his daughter, Yamilee Bongo-Astier, who deposited the cash into 

U.S. bank accounts or safe deposit boxes. On occasion, Ms. Bongo-Astier also used her U.S. 

accounts to transact business for her father. Three different banks, HSBC, Commerce, and 

JPMorgan Chase Bank, provided her with banking services for several years without being aware 

of her PEP status. President Ali Bongo’s first wife, Inge Lynn Collins Bongo, also kept 

substantial funds in the United States, at times using a U.S. trust to open accounts that masked 

her connection to the Bongo family. 

A. Background 

Gabon. Gabon, a country on the west coast of Africa about the size of Colorado, is the 

third largest oil producing state in Africa. It has a population of over 1.4 million. 

Gabon declared its independence from France in 1960, but continues strong ties with that 

country and has adopted French as its official language. According to the CIA World Fact book, 

while Gabon enjoys a per capita income that is four times that of most of sub-Saharan African 

nations due to its oil resources, there is a significant disparity in incomes within the country and 

a large proportion of its population remains poor.571 The CIA estimated that, in 2006, Gabon’s 

unemployment rate was 21 percent.572

The U.S. State Department presents a mixed view of Gabon. On the one hand, the State 

Department applauds Gabon’s willingness to work with the United States: 

“Relations between the United States and Gabon are excellent. In 1987, President Omar 

Bongo made an official visit to Washington, DC. In September 2002, Secretary of State 

Colin Powell made a brief but historic visit to Gabon to highlight environmental 

protection and conservation in the Central Africa region. This was followed by a visit to 

the White House by President Omar Bongo in May 2004. 

 

571 CIA World Factbook, https://www.cia.gov/library/publications/the-world-factbook/geos/gb.html. 572 Id. 
107 

The United States imports a considerable percentage of Gabonese crude oil and 

manganese and exports heavy construction equipment, aircraft, and machinery to Gabon. 

Through a modest International Military Education and Training program, the United 

States provides military training to members of the Gabonese armed forces each year. 

Other bilateral assistance includes the funding of small grants for qualified democracy 

and human rights, self-help, and cultural preservation projects. U.S. private capital has 

been attracted to Gabon since before its independence.”573 

On the other hand, in its 2008 Human Rights Report, the U.S. State Department 

condemns Gabon’s use of torture, imprisonment, and restrictions on free speech, as well as the 

country’s “widespread government corruption”: 

“The country's human rights record remained poor. The following human rights 

problems were reported: limited ability of citizens to change their government; use of 

excessive force, including torture toward prisoners and detainees; harsh prison 

conditions; arbitrary arrest and detention; an inefficient judiciary susceptible to 

government influence; restrictions on the right to privacy; restrictions on freedom of 

speech, press, association, and movement; harassment of refugees; widespread 

government corruption; violence and societal discrimination against women, persons with 

HIV/AIDS, and noncitizen Africans; trafficking in persons, particularly children; and 

forced labor and child labor.”574

Bongo Family. President Omar Bongo, born Albert Bernard Bongo, was one of 12 

children from a farming family in southeast Gabon.575 He joined the French Air Force, was 

appointed to the staff of then Gabon President Leon Mba, and was elected Vice President of 

Gabon in 1967.576 He assumed the office of the Presidency later that year, when President Mba 

died in office from illness. President Omar Bongo ruled the country for the next 41 years, until 

his death on June 8, 2009. 

Omar Bongo was elected President of Gabon six times, in elections held in 1975, 1979, 

1986, 1993, 1998, and 2005. According to Freedomhouse in 2006: 

“President Omar Bongo, already Africa's longest-serving ruler, won another seven-year 

term in a flawed November 2005 election, which was marred by a lack of competition 

and continuing military influence over the electoral process. Poor fiscal management and 

declining oil revenues have lowered the living standards of many Gabonese, though new 

oil discoveries and higher prices on the world market bolstered an economic turnaround 

in 2005. Three decades of autocratic and corrupt rule have made Bongo among the 

 

573 2006 State Department Report, http://www.state.gov/outofdate/bgn/g/55947.htm.

574 U.S. Department of State, 2008 Human Rights Report: Gabon, 

http://www.state.gov/g/drl/rls/hrrpt/2008/af/119002.htm. 575 BBC News/Africa, “Obituary: Omar Bongo,” June 8, 2009, http://news.bbc.co.uk/2/low/africa/8088399.stm. 576 Id. 
108 

world's richest men, although some money has trickled down to rural areas and 

contributed to higher education standards.”577 

Ten years ago, in 1999, the Subcommittee held a hearing and released a report which 

included a case history examining President Omar Bongo’s use of U.S. private banking 

accounts.578 Materials released by the Subcommittee showed that, from 1985 to 1999, President 

Omar Bongo had used accounts opened by Citibank Private Bank in the United States to deposit, 

invest, and transfer over $130 million in funds suspected to be the proceeds of corruption. These 

documents showed that, in 1985, Cititrust provided President Omar Bongo with a Bahamian 

shell corporation called Tendin Investments, and Citibank Private Bank then opened a number of 

bank accounts in the name of that shell corporation as well as several accounts in Paris under the 

name of a second shell corporation, Leontine, Ltd. In addition, in 1995, Citibank Private Bank 

opened an account for President Omar Bongo in New York under the name “OS,” a word which 

was simply the title of the account and not a corporation or other legal entity. The documents 

showed that Citibank Private Bank provided President Omar Bongo with extensive investment 

and banking services as well as tens of millions of dollars in loans. 

The Subcommittee released copies of a number of Citibank Private Bank documents 

discussing the source of President Omar Bongo’s wealth. A 1996 client profile, for example, 

noted that he did not come from a wealthy family and provided the following explanation of 

President Omar Bongo’s source of wealth: 

“Head of State for over 25 Years ... Source of Wealth/business Background: Self-made 

as a result of position. Country is oil producer.”579

A 1997 client profile elaborated further: 

“Self-made. President of African oil producing country for 30 years. Wealth created as a 

result of position and connection to French oil companies (Elf) since country is a major 

oil [supplier] to France. Wealth invested in real estate locally and in financial 

instruments overseas. It is believed that subject through affiliated [entities] retains 

ownership in many oil related ventures in the country which over the past 30 years 

resulted in significant accumulation of wealth estimated at $200MM.”580 

Internal Citibank Private Bank emails dated April 9, 11, and 14, 1997, reported that certain 

“security” or “political” funds were set aside in the Gabon budget, in the range of $111 million 

per year, which were “understood to be used at the discretion of the Presidency” and were “at the 

disposal of the Presidency, without any limitation.”581 The 1999 Report concluded: “The plain 

 

577 FreedomHouse, Country Report: Gabon 2006 Edition, 

http://www.freedomhouse.org/template.cfm?page=22&country=6965&year=2006&view=mof. 578 See “Private Banking and Money Laundering: A Case Study of Opportunities and Vulnerabilities,” hearing 

before the Permanent Subcommittee on Investigations (November 9, 1999), the report issued by the Minority Staff 

at 39-53, reprinted in the hearing record at 910-924 (hereinafter “1999 Report on President Omar Bongo”). 

579 1999 Report on President Omar Bongo at 42, reprinted in the hearing record at 913, converted from all capitals in 

original text. 

580 1999 Report on President Omar Bongo at 43, reprinted in the hearing record at 914. 581 Id., at 915.
109 

meaning of these documents is that the private bank was identifying Gabon government funds as 

a primary source of funds in the Bongo accounts.”582 In response to the hearing, Citibank Private 

Bank closed the Bongo accounts. 

 Over the course of the following ten years, President Omar Bongo has continued to be the 

subject of corruption allegations.583 In March 2007, as explained in the prior section, three 

nonprofit anti-corruption organizations, Sherpa, Survie, and the Federation of the Congolese 

Diaspora, filed a legal complaint before the French Public Prosecutor alleging the ruling families 

of Gabon, Equatorial Guinea, Angola, Burkina Faso, and Congo owned millions of dollars worth 

of properties in France “that could not be the fruits of their official salaries ... but would have 

likely required the use of stolen public assets.”584 The complaint attached articles and reports 

with alleged information about property and vehicles owned by the Heads of State and their 

relatives, including the Bongos. The complaint alleged, for example, that President Omar Bongo 

was involved in the Elf oil corruption scandal, had private banking accounts with millions of 

dollars, and multiple expensive properties in France.585 According to a later legal pleading filed 

in the case, a police investigation was launched in response to the complaint in June 2007, which 

confirmed most of the allegations and uncovered additional luxury properties, vehicles, and bank 

accounts belonging to the cited Heads of State and their relatives.586 The police allegedly 

confirmed, for example, that the Bongo family owned 39 luxury properties in “the wealthiest 

districts of Paris,” and the President’s wife bought an automobile “paid for by direct transfers 

from the Gabonese public treasury.”587 

In November 2007, the police investigation was halted by the French Public Prosecutor. 

Since then, additional litigation has ensued over whether a nonprofit organization such as 

Transparency International France (TI France) has standing to file a complaint against foreign 

 

582 Id. 583 See, e.g., New York Times, “Underneath Palatial Skin, Corruption Rules Gabon,” September 14, 2009 (“The 

‘Bongo System,’ as people here refer to it – forsaking roads, schools and hospitals for the sake of Mr. Bongo’s 66 

bank accounts, 183 cars, 39 luxury properties in France and grandiose government constructions in Libreville – is 

etched in the streets of this languid seaside capital, where he ruled for 41 years, and also in the minds of its 

inhabitants.”); Washington Post, “Leader of Troubled Gabon Marks 40 Years in Office; Oil Rich Nation’s 

Inequalities Likely to Tarnish Legacy,” (“Bongo’s accession to power coincided with the discovery of oil here in the 

late 1960s, boosting the president’s popularity and providing billions of petrodollars to grease one of Africa’s most 

effective patronage machines ... Bongo drew international attention in the 1990s, when a French court case exposed 

corrupt dealings in Gabon by the oil company Elf.”); New York Times, “The Billion-Dollar Shack,” December 10, 

2000 (“Citibank has admitted to handling billions of dollars from all kinds of corrupt leaders and their kin: Omar 

Bongo, the president of Gabon....”).

584 Legal memorandum prepared by Sherpa & Transparency International France (TI France), Admissibility of TI 

France’s complaint with civil party petition, (French court of appeals, June 2009), at 1. This memorandum recounts 

the history of the anti-corruption case filed by the three organizations from 2007 to 2009. The initial 2007 

complaint is Plainte Pres le Tribunal de Grande Instance de Paris, undated, PSI-OECD-00001-13. 585 Plainte Pres le Tribunal de Grande Instance de Paris, undated, PSI-OECD-00004. 586 Legal memorandum prepared by Sherpa & TI France, Admissibility of TI France’s complaint with civil party 

petition, (French court of appeals, June 2009), at 1, PSI-Transparency-USA.org 000160-22. 587 Id., at 1-2. Later, in 2009, a 600-page compilation of documents related to the French police investigation was 

leaked to the press. See, e.g., MCW News, “France Halts African Leaders Probe,” October 30, 2009, 

mwcnews.net/content/view/34091/51/ (“[P]olice documents ... also implicate his son and successor, Ali Bongo.... 

The Bongo family owns 39 properties in France, mostly in exclusive districts of Paris and on the Riviera.”); The 

First Post, “Avenue Bongo,” June 15, 2009; Agence France, “French Corruption Suit Targets African Leaders,” 

December 2, 2008. 
110 

officials and obtain an official investigation. In October 2009, a French appeals court ruled that 

TI France did not have standing to file the petition and dismissed it.588 That ruling is now on 

appeal to France’s highest court.589 

During his tenure in office, President Omar Bongo had several wives and is reported to 

have fathered over 30 children.590 His eldest son, Ali Ben Bongo, born Alain Bernard Bongo, 

served in various posts in the Gabon government, including ten years as the Minister of Defense 

from 1999 to 2009. On August 30, 2009, after his father’s death, Ali Bongo won a contested 

election to assume office as President of Gabon, with 42 percent of the vote split among 17 

candidates. Riots protesting his election occurred in Libreville, Gabon’s capital, and Port Gentil, 

Gabon’s second largest city. On October 16, 2009, President Ali Bongo was sworn into office. 

In 1994, Ali Bongo married Inge Lynn Collins, a U.S. citizen who is now estranged from him 

and living in California. He is also married to a Gabonese citizen, Sylvia Ajma Valentin Bongo. 

President Omar Bongo’s daughters include Pascaline Bongo, who was his chief of staff, 

and Yamilee Bongo Astier, a Canadian citizen who has lived at times in the United States. 

B. Bongo Use of U.S. Lobbyist To Purchase Armored Cars 

and C-130 Aircraft 

From 2003 through at least 2007, President Omar Bongo employed the services of a U.S. 

lobbyist, Jeffrey Birrell, to help him purchase U.S.-built armored vehicles, and obtain U.S. 

government authorization to purchase U.S.-built C-130 aircraft, to support his regime. In 

connection with those two transactions, over $18 million in suspect funds were wire transferred 

from Gabon into U.S. bank accounts maintained by Mr. Birrell in the name of The Grace Group 

LLC, a corporation formed by him and his wife. Mr. Birrell received the funds primarily from 

President Omar Bongo and an entity called Ayira. He later transferred $9.2 million of the Ayira 

funds to an account in the name of President Omar Bongo in Malta, and he made other large 

payments from The Grace Group accounts to a variety of individuals and entities, apparently at 

the direction of President Omar Bongo or his advisers. For at least a two-year period from 2005 

to 2007, Mr. Birrell’s corporate accounts served as a conduit for millions of dollars in suspect 

funds flowing into and out of the United States. 

Mr. Birrell provided documents in response to a Subcommittee subpoena, and provided 

limited information to the Subcommittee through his legal counsel. Mr. Birrell refused, 

however, to participate in an interview or answer written questions provided by the 

 

588 Cour D’Appel De Paris Pole 7 Deuxieme Chambre De L’Instruction, Appel D’une Ordonnance De Recevabilite 

De Constitution De Partie Civile Arret, October 29, 2009, PSI-Transparency-usa.org 00006-15. See also TI France 

Press Release, “Appealing for justice: three African presidents and their French assets,” October 29, 2009; MWC 

News, October 30, 2009, “France Halts African Leaders Probe,” mwcnews.net/content/view/34091/51/; Impunity 

Watch, “French Court Halts Corruption Probe,” October 31, 2009, 

http://www.impunitywatch.com/impunity_watch_europe/2009/10/french-court-halts-corruption-probe.html. 

589 TI France Press Release, “Appealing for justice: three African presidents and their French assets,” October 29, 

2009. 

590 BBC News/Africa, “Obituary: Omar Bongo,” June 8, 2009, http://news.bbc.co.uk/2/low/africa/8088399.stm; 

Yamilee Bongo told Commerce Bank that she had 60 siblings. 12/13/05 Commerce Bank memorandum on 

“Enhanced Due Diligence,” Commerce 158. 
111 

Subcommittee regarding his business relationship with President Omar Bongo or his corporate 

accounts, asserting instead his Constitutional rights under the Fifth Amendment.591 

Birrell Services. Mr. Birrell is a longtime lobbyist in the Washington, D.C. area.592 He 

has been doing business with President Omar Bongo and the Republic of Gabon since at least 

1998.593 Documentation obtained by the Subcommittee indicates that Mr. Birrell had direct 

access to President Omar Bongo, met with him on a number of occasions, and communicated 

with him by letter and email. 

This Report focuses on two business transactions in which President Omar Bongo used 

Mr. Birrell’s services to purchase and ship three U.S.-built armored vehicles and three other U.S. 

automobiles to Gabon, and to obtain U.S. government authorization to purchase six U.S.-built 

C-130 military grade cargo aircraft owned by the Saudi Arabian Government.594 After obtaining 

the necessary authorization from the United States, Mr. Birrell attempted to but was unsuccessful 

in completing the transfer of the aircraft to Gabon. 

Barron-Birrell Inc. and The Grace Group. Mr. Birrell used two U.S. companies to 

transact business with President Omar Bongo and Gabon. The first was Barron-Birrell, Inc., a 

District of Columbia corporation that Mr. Birrell originally formed with David Henry Barron in 

1991. The incorporation papers list Mr. Birrell as the Chief Executive Officer and President of 

the company, and Mr. Barron as the Chairman and Vice President of the company.595 In 1998 

and for most of the following years through 2006, Barron-Birrell Inc. submitted FARA filings 

with the U.S. Government stating that the company provided “public relations” services to 

President Omar Bongo and acted as a “U.S. Policy consultant” to Gabon.596 

In 2004, Mr. Birrell formed a second company, The Grace Group LLC, which is the 

company primarily involved in the armored car and C-130 aircraft transactions. On June 8, 

 

591 See, e.g., the written questions submitted to Mr. Birrell by the Subcommittee on March 13, 2009.

592 For a number of years, Mr. Birrell has registered his company, Barron-Birrell Inc. under the Foreign Agents 

Registration Act (FARA) as a representative of Gabon. He has not registered his company under the Lobbying 

Disclosure Act, since that Act requires representatives of foreign governments to complete the more detailed FARA 

registration. While Mr. Birrell thus qualifies as a registered “foreign agent” rather than a registered “lobbyist,” this 

Report refers to him as a lobbyist to avoid any confusion that might result from referring to him as a “foreign agent.” 

593 See FARA filing submitted by Barron-Birrell Inc. stating that the firm provided “lobbying/public relations” 

services to Gabon during 1998. Report of the Attorney General to the Congress of the United States on the 

Administration of FARA for the six months ending June 30, 1998. 

594 Mr. Birrell also proposed other projects for President Omar Bongo and Gabon. See, e.g., 3/27/07 memorandum 

from Mr. Birrell to “His Excellency Charles MBA,” Grace 0636-37 (proposing bringing U.S. airline service to 

Gabon); 10/18/06 letter from Mr. Birrell to President Omar Bongo, Grace 0733-34 (urging President Omar Bongo to 

invest in the “Atlantic Fund”). See also 2003 and 2004 bank account statements for a Barron-Birrell Inc. account 

showing multiple cash deposits totaling $360,000 in just over one year, Psi-ub-000375 ($50,000 cash deposit on 

March 31, 2003); Psi-ub-000377 ($50,000 cash deposit on July 22, 2003); Psi-ub-000381 ($50,000 cash deposit on 

November 25, 2003); Psi-ub-000383 ($210,000 cash deposit on May 24, 2004); and Psi-ub-000385 ($150,000 check 

deposited from a Riggs Bank account in the name of “Payeur du Gabon A. Washington”). In addition, Birrell made 

a cash deposit into the BBI account in the amount of $160,000 in October of 2005. 

595 See, e.g., 3/13/2003 Barron and Birrell Inc. Corporate Authorization Resolution, Psi-ub-000147. 

596 See, e.g., FARA filings for Barron-Birrell Inc. in the Reports of the Attorney General to the Congress of the 

United States on the Administration of FARA for the six months ending June 30, 1998, 1999, 2002, 2003, 2004, 

2005, and 2006. 
112 

2004, Mr. Birrell formed this limited liability company in the State of Virginia.597 The 

organization papers list him as the sole “Member” or owner.598 Six months later, however, on 

December 20, 2004, a filing with the State of Virginia replaced him with his wife, Diane Duffy, 

as the sole “Managing Member” or owner of the company.599 Two years later, in October 2007, 

a Virginia filing by Mr. Birrell once more listed him as the sole Member or owner of the 

company, replacing Ms. Duffy.600 

Other corporate filings with the State of Virginia variously name Mr. Birrell or his wife 

as the owner, manager, president, or agent of The Grace Group.601 Despite these filings, the 

documentation reviewed by the Subcommittee indicates that Mr. Birrell alone managed and 

operated The Grace Group; none showed Ms. Duffy’s active involvement in the transactions 

examined in this Report. At times when his wife was listed as the sole Managing Member of the 

company, Mr. Birrell nevertheless held himself out as the Managing Member and company 

owner.602 

As of 2009, Virginia incorporation records showed that The Grace Group continued to be 

registered and in good standing with the State. The Subcommittee was unable to locate any 

FARA filings for The Grace Group, or for Mr. Birrell personally.603 Mr. Birrell did register The 

Grace Group as a broker for the C-130 aircraft transaction with the U.S. State Department. 

 

597 6/8/04 certificate of incorporation for The Grace Group LLC from the Commonwealth of Virginia, Grace 1107-

08. 

598 6/8/04 The Grace Group LLC Operating Agreement, Grace 1112-23. See also August 23, 2004 IRS letter 

identifying Mr. Birrell as the “Sole Mbr” of the company, Grace 1105-06. A letter dated September 15, 2004, sent 

by Mr. Birrell’s legal counsel to the IRS states that “Grace Group LLC is solely owned by Diane Duffy, 

Mr. Birrell’s wife,” and that she “is the single member of this company,” Grace 1104. A letter dated April 4, 2008 

from Mr. Birrell’s legal counsel to the Subcommittee, explains further: 

“Ms. Duffy is not involved in the Company and has no ownership interest therein. In case of Mr. Birrell’s 

death or disability, Ms. Duffy is currently a signatory on the Company’s bank account. Our law firm 

formed the LLC entity at Mr. Birrell’s request on June 8, 2004. At that time, Mr. Birrell indicated that he 

intended to be the sole owner. ... Subsequent to forming the LLC, Mr. Birrell decided to make his wife the 

sole member. However, this change created an administrative issue with the IRS which continued to 

address the registration form to “Birrell, Jeffrey Sole Mbr.” After consultation with counsel and inasmuch 

as Ms. Duffy had no involvement with Company operations, and as the administrative issues with the IRS 

persisted and as Mr. Birrell was advised by this firm that there were no tax or estate planning benefits 

associated with the change, in July, 2005, Mr. Birrell sought our assistance and the original terms of the 

Operating Agreement were restored. Accordingly, from that point forward, all Company paperwork ... 

[has] consistently shown Mr. Birrell as the sole owner of the Company.” 

599 12/20/04 Commonwealth of Virginia, Statement of Change of Registered Office and/or Registered Agent, Grace 

1124. 

600 10/21/07 Commonwealth of Virginia, Statement of Change of Registered Office and/or Registered Agent, Grace 

1110-11. 

601 See, e.g., 6/17/05 corporate resolution naming Ms. Duffy as the manager and president and Mr. Birrell as a 

company “agent,” Psi-ub-000136; 9/14/05 corporate resolution naming Mr. Birrell as the manager and agent, 

without mentioning Ms. Duffy, Psi-ub-000132. 

602 See, e.g., 7/29/05 filing with the U.S. State Department to register as a broker in which Mr. Birrell lists himself as 

the “Managing Member” of The Grace Group LLC, Grace 0749; 4/7/05 United Bank Account Agreement to open 

an account for The Grace Group LLC in which Mr. Birrell is listed as a “Co-Owner,” Psi-ub-000127. 603 FARA requires persons to file a registration form with the U.S. Department of Justice within ten days of 

becoming an “agent for a foreign principal,” including a foreign government official. 22 U.S.C. § 612(a). An 

exception is provided, however, for persons who engage in commercial rather than lobbying or political activity. 22 

U.S.C. § 613(d). Mr. Birrell may have viewed his work for President Omar Bongo as falling within the commercial 
113 

Bank Accounts. Mr. Birrell opened four corporate bank accounts that were used by 

Barron-Birrell Inc. or The Grace Group LLC, as well as a personal account, at a bank in a 

Washington, D.C. suburb. The bank was United Bank in McLean, Virginia, a state-chartered 

institution with about $8 billion in assets. 

The five accounts were as follows: 

1) Barron-Birrell Inc. or BBI Account No. 4359-9687; 

2) Grace Group LLC Account No. [xxxxxxx]; 

3) Grace Group LLC Escrow Account No. 4389-9095; 

4) Grace Group LLC Special Project Account No. 4360-0485; and 

5) Mr. Birrell and Ms. Duffy joint Account No. [xxxxxx]. 

The BBI account was opened as a small business checking account on March 13, 2003, and 

shows transactions involving President Omar Bongo and Gabon beginning that year.604 The 

account had two signatories, Mr. Birrell and Mr. Barron. It was closed three years later at the 

request of the firm on November 6, 2006.

The three Grace Group accounts were opened during 2005, and were funded primarily 

with wire transfers from Gabon. The first Grace Group LLC account was opened in June 2004, 

and has been the primary business account for the company.605 Mr. Birrell and Ms. Duffy were 

listed as “co-owners,” and both were signatories on the account. That account has remained 

active. The next account was opened a year later on June 17, 2005, as “The Grace Group Client 

Escrow Account.” 606 Mr. Birrell and Ms. Duffy were both signatories, and this account was the 

key repository for funds associated with the C-130 aircraft transaction. A month later, in August 

2005, Mr. Birrell and Ms. Duffey opened The Grace Group LLC Special Project Account, which 

was briefly used in connection with the armored car transaction.607 Two months after that, on 

October 24, 2005, Mr. Birrell and Ms. Duffy opened a joint personal account at the bank.608 The 

client escrow and special project accounts have since been closed on January 26, 2009, while the 

joint personal account remained open.609 

 activity exception, even though, with respect to the C-130 aircraft, he repeatedly contacted U.S. Government 

officials to obtain U.S. Government approval of the sale of the aircraft to Gabon. 604 See 3/13/03 United Bank account opening documentation, Psi-ub-000145. 605 June 2004 United Bank account statement, Psi-ub-000153. See also update of account on April 7, 2005, United 

Bank Account Agreement, Psi-ub-000127. 

606 6/17/05 United Bank Account Agreement, Psi-ub-000133-4. 607 9/30/05 United Bank Statement of Accounts, Psi-ub-000212. 608 10/24/05 United Bank Account Agreement, Psi-ub-000142. Mr. Birrell wrote the following to United Bank on 

October 24, 2005: “Can you please do the paperwork for a joint mm account for my wife (Diane T. Duffy) and me. 

Under the advice of my lawyer and CPA, I want to transfer the majority [of] the funds in the new Grace Group 

account to a personal (joint) account. Diane and I will stop by at some point this afternoon.” PSI United Bank 05-

000011. 

609 Subcommittee interview of United Bank officials, December 3, 2009. 
114 

(1) Purchase of Armored Cars 

Documentation obtained by the Subcommittee indicates that, in early 2005, President 

Omar Bongo asked Mr. Birrell to assist him in the purchase and transport of armored cars to 

Gabon for his personal protection. President Omar Bongo apparently requested three vehicles 

that would be armored and three that would not. To finance the purchase of all six vehicles, 

President Omar Bongo sent over $1.2 million from his and other accounts in Gabon to The Grace 

Group LLC accounts in the United States. Mr. Birrell used the funds to purchase, armor, and 

ship the vehicles to Gabon. By the end of 2005, three armored H2 Hummers including an 

armored stretch limousine, one unarmored stretch H2 Hummer limousine, a Cadillac Deville, 

and a Jeep had been shipped to President Omar Bongo in Gabon,610 and Mr. Birrell had allowed 

his U.S. bank account to serve as a conduit for over $1.2 million in suspect funds brought into 

the United States from Gabon. 

Order Placed. Documentation obtained by the Subcommittee indicates that President 

Omar Bongo initiated the armored vehicle transaction in early 2005. 

In March or April 2005, Mr. Birrell and General Nzengui Nzoundou Flavien, a senior 

official in the office of the Gabon presidency, traveled to California, Utah, and Florida, in 

connection with the armored vehicle transaction.611 In Palm Springs, California, they visited 

Exotic Motor Cars, which showed them a Cadillac Deville. They also traveled to Ogden, Utah, 

to visit International Armoring Corporation (IAC), a Utah firm which specializes in preparing 

armored vehicles for heads of state.612 

An IAC invoice dated April 1, 2005, indicates that IAC agreed to prepare four 2005 GM 

Hummer vehicles for The Grace Group.613 Later documentation makes clear that, of the four 

vehicles, two H2 Hummer sports utility vehicles would be armored, one H2 Hummer limousine 

would be both armored and “stretched,” and a fourth H2 Hummer limousine would be 

“stretched” but not armored.614 A handwritten notation on the IAC invoice indicates that the 

total cost for all four vehicles was $399,615. 

Initial Transfer of $850,000. In late March and early April, to pay for the vehicles, 

President Omar Bongo sent two wire transfers from Gabon, totaling nearly $850,000, to The 

 

610 Subcommittee interview of International Armoring Corporation officials, November 24, 2008. 611 See, e.g., 7/7/05 memorandum from Barron-Birrell to President Omar Bongo, Travel to California/Utah/Florida 

(Nzengui/Birrell/Campbell)”, Grace 0414; 4/7/05 check for $4,720 drawn on The Grace Group account and payable 

to Ms. Duffy for “CA/UT Trip Exp. Rept.”, Grace 0019; 4/6/05 email from IAC to Mr. Birrell (“It was a pleasure to 

welcome General Nzengui and Jeff Birrell to the headquarters and the production facilities of the International 

Armoring Corporation.”), Grace 0907. 612 Mr. Birrell had communicated with IAC prior to the trip. On March 7, 2005, he sent an email to IAC stating: “I 

will know tomorrow about our date of arrival in UT to place the order for the 4 h2s. However, I was able to 

convince the president to add one more vehicle in support of his re-election program. Can you please advise if you 

can stretch an h2 to 14 or 15 meters and add a stand up portal for him to wave/address the crowd? The portal would 

not be an armored bubble.” Grace 0966. 

613 4/1/05 International Armoring Corporation invoice, Grace 0396. See also undated email, likely sent around April 

6, 2005, from IAC to President Omar Bongo (“The contract to build the vehicles was signed on 31 Mar 05....”), 

Grace 0946. 

614 See also Subcommittee interview of International Armoring Corporation officials, November 24, 2008. 
115 

Grace Group LLC at United Bank in Virginia. The first wire transfer was sent on March 31, 

2005, from an account in the name of “El Hadj Omar Bongo Ondimba” at BGFI Bank in 

Libreville, Gabon, and deposited $599,933.01 into the primary Grace Group Account No. 

[xxxxxx].615 One week later, on April 7, 2005, the same Bongo account at BGFI Bank in Gabon 

wired nearly $242,000, this time through Banque Populaire in Paris, to the same Grace Group 

LLC account at United Bank.616 

Shortly after receiving the first wire transfer from President Omar Bongo, on April 4, 

2005, Mr. Birrell wire transferred $67,500 from his Grace Group account to an account in the 

name of Exotic Motor Cars at Pacific Western Bank in California.617 This amount matches a 

vehicle transfer form showing that, a few days earlier, Exotic Motor Cars had transferred a 2005 

Cadillac to “The Gabonese Republic” and “Gen Nzengui Nzoundou Flavien” for $67,500.618 

Priority Worldwide Services, a U.S. company experienced in shipping vehicles overseas, later 

arranged for the transport of the Cadillac to Gabon. A Priority Worldwide Services invoice 

indicates that, for $4,903.75, the Cadillac was picked up on June 6, 2005, and driven on a flat 

bed truck to New York in preparation for a flight to Gabon.619 Mr. Birrell paid that invoice by 

sending a wire transfer from The Grace Group account to Priority Worldwide Services for 

$4,903.75 on June 29, 2005.620 He had earlier sent a wire transfer to Priority Worldwide Services 

on June 6, 2005, for $28,020, presumably to pay for the flight itself.621 

On April 8, 2005, in response to the invoice prepared a week earlier by International 

Armoring Corporation to armor and stretch the four H2 Hummer vehicles, Mr. Birrell sent a wire 

transfer from The Grace Group account to an IAC account at Zions Bank SLC for $399,615.622

Armoring Delays. According to a Birrell email, IAC had promised to deliver the first 

two H2 Hummers on April 9 and the second two on May 16.623 The company missed both 

 

615 3/31/05 wire transfer record, Psi-ub-000404. The original swift message for the wire requests that $600,000 be 

transferred, and notes that transfer fees of $45 would be deducted. 3/31/05 wire transfer record, Grace 0387-8. 

616 4/7/05 wire transfer record, Psi-ub-000408; 4/7/05 Funds Transfer Notification, Grace 0393. 617 4/4/05 United Bank Domestic Wire Transfer Authorization, Grace 0391. A few days earlier, on April 1, 2005, a 

check was drawn on the Grace Group LLC account for $9,000 and made out to “Cash.” Grace 0019, Check No. 

1032. On April 4, this check was cashed, with the notation “4K for Max Hotel[;] 5K to A[illegible]sh. – wire in, 

cash out.” 

618 5/31/05 DMV title transfer, Grace 0981. A week later, on April 6, $6,500 was deposited into The Grace Group 

account with the notation, “Caddy Commission Deposit,” Grace 0020. 

619 6/24/05 Priority Worldwide Services invoice, Grace 0406. See also 6/7/09 email from Priority Worldwide 

Services to Mr. Birrell (providing details on shipping the Cadillac Deville), Grace 0902; 6/9/05 email from 

Mr. Birrell to Abass Haidara (“The Cadillac is in safe hands in New York and the air shipper is looking for new air 

routes.”), Grace 0958. 

620 6/29/05 United Bank funds transfer notification, Grace 0408, with handwritten note: “Air Transport Remainder 

Storage & Trucking Caddy;” 6/29/05 United Bank Domestic Wire Transfer Authorization, Grace 0410. 621 6/6/05 United Bank Domestic Wire Transfer Authorization, Grace 0400. 622 4/8/05 United Bank WireHouse Message Details, Psi-ub-000410. 4/1/05 IAC invoice, Grace 0396. Zions Bank 

SLC is located in Salt Lake City. On March 29, 2005, another company, Armor Auto Sales in Fort Wayne, Indiana, 

wire transferred $5,000 to The Grace Group. Psi-ub-000402. 623 6/9/05 email from Mr. Birrell to Abass Haidara, a Gabon official states: “I have forcefully pointed out that we 

were offered hard assurances on delivery dates (April 9 and May 16) and that these dates have come and gone.” 

Grace 0958. 
116 

deadlines, and Mr. Birrell expended substantial effort in pressuring the company to complete the 

work and ship the armored vehicles to Gabon. 

On April 6, 2005, after it had become clear IAC would miss the first deadline, Mr. Birrell 

sent an email to Daniel Dresser, IAC Vice President of Operations, urging him to write a 

personal letter to President Omar Bongo, explaining the delay.624 Mr. Birrell provided a sample 

letter, and Mr. Dresser sent an undated letter to President Omar Bongo, providing a status report 

on the vehicles and apologizing for the delay: 625

“Unfortunately we have experienced some delays common for our head of state vehicles 

from our suppliers which have caused us to pass the original due date for the first two 

vehicles. ... These delays are no reflection on your faithful representative Mr. Birrell; he 

has done everything within his power to see that these vehicles meet the deadlines 

established in the contract.”626

On April 14, 2005, Mr. Birrell sent an email to IAC directing the company to keep the 

work they were doing for President Omar Bongo confidential: 

“I am making a series [of] acquisition[s] for the Head of State, and these actions have 

created a lot of interest among certain individuals. It is an election year in Gabon and not 

all of the individuals within the office of the president are from his party. Information 

regarding these transactions could be used to his political detriment. I am so advising all 

of the contractors and suppliers with which I am currently dealing. Please direct any and 

all inquiries to me and I will forward them directly to the appropriate official within the 

office of the president. Any and all.”627 [Emphasis in original document.] 

On April 18, 2005, the Grace Group wire transferred another $36,750 to IAC at Zions Bank 

SLC.628 

While the work on the vehicles continued, Mr. Birrell contacted Priority Worldwide 

Services to arrange for the shipment of six vehicles to Gabon, three that would be armored and 

three that would not.629 Priority explained that the armored vehicles would require an export 

license from the U.S. Commerce Department, while the unarmored vehicles would not. 

In response to a Priority Worldwide Services request for information, on May 19, 2005, 

Mr. Birrell sent a letter detailing the shipment request for the three armored vehicles.630 He 

wrote: “This firm has been requested by the Gabonese Head of State to source three armored 

vehicles for the personal protection of the Head of State.”631 He also stated that the purchaser 

 

624 4/6/05 email from Mr. Birrell to Mr. Dresser, Grace 0907. 625 6/10/05 letter from Mr. Dresser to Mr. Bongo, Grace 0946. 626 Id. 627 4/14/05 email from Mr. Birrell to Mr. Dresser, Grace 0916. 628 4/18/05 United Bank Funds Transfer Notification, Grace 0999. 

629 Emails dated May 17 and 18, 2005, between Mr. Birrell and Priority Worldwide Services, Grace 1058. 630 5/19/05 letter from Mr. Birrell to Mr. Libutti, Grace 0397-98. 631 Id. 
117 

and end user of the three armored vehicles would be “the Gabonese Government, Executive 

Office of the President,” and that the vehicles would not have any military application. 

The next day, on May 20, 2005, Priority Worldwide Services applied to the U.S. 

Commerce Department for a license to export “3 armored Humvee SUVs [sport utility vehicles]. 

NIJ Level 3, unarmed.”632 The application stated that the vehicles had a value of $120,000 

apiece and a total value of $360,000. 

Delays in the armoring continued. On May 31, 2005, Mr. Birrell emailed Mr. Dresser 

that his company was “running behind schedule and I can tell you that I am now in a tough 

position with President Omar Bongo.”633 

On June 7, Mr. Birrell sent a letter to Gabon General Nzengui providing “titles of five of 

the vehicles that have been ordered for President Omar Bongo. These vehicles have been paid 

for from the funds wired to me.”634 The letter noted that the Cadillac was in New York and 

ready for shipment, two Hummer H2s were “nearly completed,” and two more were “under 

construction and there will not be a lengthy delay” in shipping them. 

At some point, Mr. Birrell and a delegation of Gabon officials traveled to IAC to inspect 

the vehicles.635 On June 9, 2005, Mr. Birrell sent an email to Mr. Dresser at IAC stating, “I 

regret the tone of our conversation,” but noting that President Omar Bongo had been “waiting 

since April 9th for shipment notification.”636 Mr. Birrell wrote: 

“I need all 4 H2s done without any further delay. It is not acceptable that the stretched 

H2 is still in CA and the armor has not started – waiting 10 days for a truck – or that the 

first two H2s have not moved at all since my trip to your HQ. 

As requested, I will expect your correspondence regarding shipment date by Friday, COB 

eastern standard time. I will forward your letter directly to President Omar Bongo. ... 

The the [sic] H2s and the Caddy need to be in Libreville by the 26 or this moves into a 

new level. It will be out of my hands. The stretched H2s need to follow closely 

behind.”637 

On June 24, 2005, the Commerce Department granted an export license to Priority 

Worldwide Services allowing shipment of three armored vehicles to Gabon any time before June 

24, 2007.638 Within days, two of the H2 Hummer vehicles were shipped to Gabon. A Priority 

Worldwide Services invoice dated June 27, 2005, indicates that the vehicles had been picked up 

 

632 5/20/05 U.S. Commerce Dept. Export License Application, Grace 0403-05. The license from the Commerce 

Department was validated on 6/24/05, and expired on 6/24/07. 

633 5/31/05 email from Mr. Birrell to Mr. Dresser, Grace 0894. 634 6/7/05 email from Mr. Birrell to General Nzengui, Grace 0959. 635 Subcommittee interview of International Armoring Corporation officials, November 24, 2008. 636 6/9/05 email from Mr. Birrell to Mr. Dresser, Grace 0929. 637 Id. The email could be read as suggesting shipment of five vehicles, but the Subcommittee was able to document 

the shipment of only four. 

638 6/24/09 U.S. Department of Commerce Export License No. D339614, Grace 0401-02. 
118 

that day in Utah at IAC, transported on a flatbed truck to New York, and put on a flight to Gabon 

for $72,002.50.639 On June 29, Mr. Birrell sent a wire transfer from The Grace Group account to 

Priority Worldwide Services for $72,002.50; a handwritten notation on the wire transfer 

documentation states: “Air Transport 2 H2s.”640

 The two remaining H2 Hummer vehicles took another three months to complete. On 

July 7, 2005, prior to Mr. Birrell’s traveling to Gabon, Barron-Birrell Inc. sent a memorandum to 

President Omar Bongo, entitled, “Special Project Budget Recap,” listing the expenses in 

connection with the armored car transaction.641 The document referenced six cars: the Cadillac, 

four Hummer H2s, and a Jeep. It stated that the expenses paid to date associated with armoring, 

stretching, trucking, storing, and transporting the vehicles by air totaled $614,362, and that 

another $426,675 in expenses remained. In addition, it stated that the “Total Income” provided 

was $842,000 and that an additional $199,000 was “required.” 

 On July 14, 2005, Mr. Birrell sent an email to Mr. Dresser at IAC stating that he had met 

with the President in Gabon that night and was meeting with him again in the morning. 

Mr. Dresser responded on July 15, 2005, with a long email apologizing for the delay and stating 

that IAC was “applying every resource possible” to complete work on the remaining two 

vehicles for President Omar Bongo. Mr. Dresser noted that, “We currently have (9) head of state 

vehicles in process with the 34 vehicles currently in the shop.”642

On July 19, 2005, Mr. Birrell wire transferred an additional $84,950 to IAC to complete 

work on the remaining two vehicles.643 These funds were taken from The Grace Group accounts 

which had been replenished with additional funds from Gabon.644

A month later, on September 14, 2005, Mr. Birrell sent a memorandum with an update on 

the vehicles to Mr. Haidara, President Omar Bongo’s adviser who was then in New York.645 

Mr. Birrell wrote that the “two remaining Hummer (H2) cars” were finished. His letter then 

provided two alternatives for shipping them to Gabon, on a direct charter flight from Miami to 

Gabon for $332,650, or on an indirect flight with other cargo from New York to Gabon for 

$111,600. Mr. Birrell stated that he had also purchased three mobile “electronic counter measure 

equipment” (ECM) units for use in the President’s vehicles for about $59,000, and that he had 

“purchased the General’s Jeep for $23,948.”646 As a result of the purchase of the Jeep and ECM 

units, Mr. Birrell stated that “the additional budget needed has increased to about $120,000.” 

 

639 6/27/05 Priority Worldwide Services invoice, Grace 0407. 640 6/29/05 United Bank Funds Transfer Notification, Grace 0409; 6/29/05 United Bank Domestic Wire Transfer 

Authorization, Grace 0410. 

641 7/7/05 Barron-Birrell memorandum to President Omar Bongo, Grace 0414. 642 7/15/05 email from Mr. Dresser to Mr. Birrell, Grace 1075. 643 7/22/05 email from Mr. Birrell to IAC, Grace 1076. 644 See, e.g., the wire transfers totaling $17 million sent to the Grace Group LLC account by Ayira from a Gabon 

bank account on June 17 and July 18 and 21, 2005, as explained in the next section. 

645 9/14/05 memorandum from Mr. Birrell to Mr. Haidara, Grace 1060-61. 646 Id. See also a similar memorandum which Mr. Birrell sent to General Nzengui on the same date, Grace 0418. In 

addition, see an earlier 7/18/05 memorandum from Mr. Birrell to Mr. Haidara, in which Mr. Birrell discussed the 

ECM purchase and additional vehicles for “General Nz.” Grace 0630. 
119 

On September 22, 2005, The Grace Group wire transferred $90,490 to IAC. A notation 

on the wire transfer document states that the transfer was “payment for cost of 2 vehicles shipped 

to Africa.”647 On the same date, the Grace Group escrow account sent $332,650 to Priority 

Worldwide Services for “payment for the cost of 2 vehicles shipped to Africa.”648 

IAC told the Subcommittee that, altogether during 2005, The Grace Group paid $611,805 

to IAC for the purchase, stretching, and armoring of four vehicles.649 The documentation shows 

that The Grace Group also wire transferred at least $437,575 to Priority Worldwide Services. In 

addition, Mr. Birrell reported paying $67,500 to Exotic Motor; $23,948 to an unknown dealer for 

the Jeep; and $59,000 to an unknown vendor for the ECM units. Altogether, The Grace Group 

had spent nearly $1.2 million. 

 

To pay these expenses, during the six-month period from April to October 2005, 

Mr. Birrell received millions of dollars wire transferred from Gabon into The Grace Group 

accounts. He used these funds to provide substantial wire transfers and checks to various parties 

across the United States. 

Compensation. The compensation paid to Mr. Birrell for his work on the armored car 

transaction is unclear. It appears that the last two H2 Hummer vehicles were shipped to Gabon 

in September or October 2005. On October 24, 2005, Mr. Birrell and Ms. Duffy opened a new 

joint personal account at United Bank.650 On October 25, 2005, the day after the account was 

opened, a check for $600,000 was signed by Mr. Birrell, drawn on the Grace Group LLC Special 

Project Account No. 4360-0485, and deposited into the new joint account.651 

A United Bank statement for The Grace Group Special Project Account shows that 

earlier in the day on October 25, 2005, $534,430.11 was deposited into the Special Project 

Account by “Phone Tsfr.”652 A United Bank receipt shows that $534,430.11 had been 

transferred from The Grace Group LLC account.653 When added to the $67,059.23 already in the 

account, the balance in the Special Project Account exceeded $600,000. After the $600,000 

check withdrew those funds, the Special Project Account held about $1,400. 

These documents show that the bulk of the $600,000, almost all of which came from 

Gabon, went from The Grace Group LLC account, to The Grace Group LLC Special Project 

Account, to the new Birrell-Duffy joint account. The joint account then spent the money on 

credit card bills, taxes, other expenses, and on making deposits to accounts at other financial 

 

647 9/22/05 wire transfer, Psi-ub-000432-33. 648 United Bank WireHouse Message Details, Psi-ub-000434-35. 

649 12/6/08 email from IAC to the Subcommittee, no bates number. 650 10/24/05 United Bank Account Agreement, Psi-ub-000142. 651 10/25/05 Check No. 951, Psi-ub-000233. 652 October 2005 United Bank Statement of Accounts for The Grace Group LLC Special Project Account, Psi-ub000213. 

653 10/25/05 United Bank deposit slip, Grace 0007. 
120 

institutions.654 The documentation suggests that Mr. Birrell also received a $6,500 commission 

for the Cadillac sold to President Omar Bongo.655 

The documentation indicates that, throughout 2005, Mr. Birrell expended significant 

effort to carry out President Omar Bongo’s purchase of three armored and three unarmored U.S.-

built vehicles, including by arranging the funding, pressuring IAC to fulfill its contract on a 

timely basis, and arranging shipment of the vehicles to Gabon. In addition, Mr. Birrell allowed 

his corporate accounts to serve as a conduit for at least $1.2 million in suspect funds from Gabon 

to purchase armored cars for the Bongo regime. Mr. Birrell declined to disclose to the 

Subcommittee whether he was paid in excess of $600,000 for his efforts. 

(2) Purchase of C-130 Aircraft 

From 2005 to 2007, President Omar Bongo also employed Mr. Birrell’s services to obtain 

authorization to purchase six U.S.-built C-130 aircraft from the Government of Saudi Arabia. 

The United States had originally sold these military grade aircraft to Saudi Arabia with 

restrictions on any future transfer or sale. To comply with the Arms Export Act, Saudi Arabia 

had to obtain the U.S. State Department’s approval prior to selling the C-130 aircraft to Gabon. 

At the direction of President Omar Bongo, Mr. Birrell undertook extensive efforts to obtain U.S. 

approval of the sale. After that approval was provided, however, the aircraft sale did not take 

place.656 Mr. Birrell subsequently attempted to arrange a purchase of the aircraft using funds 

supplied by private companies, but that effort was also unsuccessful. 

During the course of this transaction, an entity called Ayira transferred $17 million from 

Gabon into the Grace Group accounts at United Bank to pay for the purchase of the C-130 

aircraft. Mr. Birrell declined to explain to the Subcommittee what he knew about Ayria or to 

clarify the relationship between Ayira and President Omar Bongo. After the aircraft sale fell 

through, Mr. Birrell wire transferred $9.2 million of the Ayira funds to an account in the name of 

President Omar Bongo at a bank in the country of Malta. In addition, Mr. Birrell used the Ayira 

funds to send wire transfers totaling over $4.2 million to President Bongo’s senior adviser, Abass 

Haidara Cherif, and another $1 million to a handful of “consultants.” By accepting the $17 

million and initiating subsequent wire transfers at the apparent direction of President Omar 

Bongo or his senior advisers, Mr. Birrell allowed his corporate accounts to be used as a conduit 

for millions of dollars in suspect funds. As compensation for his efforts on the C-130 

transactions, Mr. Birrell requested $850,000 plus expenses which, at one point, exceeded 

$253,000. Mr. Birrell declined to disclose to the Subcommittee how much he was actually paid. 

Selling Military Grade Aircraft. The International Traffic in Arms Regulations (ITAR) 

are U.S. Government regulations which control the export and import of military-related items 

 

654 See United Bank account statements, Psi-ub-000001-489. 655 See 4/6/05 United Bank deposit slip for $6,500 deposit into the Grace Group LLC account, with handwritten 

notation: “Caddy Commission Deposit,” Grace 0020. 

656 A letter from one of the consultants who worked on the sale, former Saudi Brigadier General (Retired) Hamid 

Bakhsh, told the Subcommittee that the “deal [was] not finalized by the government of Gabon.” Undated letter from 

Mr. Bakhsh to the Subcommittee received on October 23, 2009, PSI-Baksh-01-0001. 
121 

on the United States Munitions List.657 These regulations implement the Arms Export Control 

Act, and are enforced by the U.S. Department of State working with the U.S. Department of 

Defense (DOD). Under the ITAR regulations, technology related to military equipment may be 

shared only with U.S. persons, absent State Department approval. Should the U.S. State 

Department discover that ITAR products have been shared with a non-U.S. person, the company 

that shared such technologies can face steep fines.658 

C-130 aircraft are military grade aircraft that are included on the U.S. Munitions List and 

subject to export controls under the ITAR regulations. The C-130 Hercules is a four-engine 

turboprop military transport aircraft built by Lockheed. It can land and takeoff from unprepared 

runways, and was originally designed as a troop, medical evacuation, and cargo transport 

aircraft. It has also been used as a gunship, for search and rescue, scientific research support, 

weather reconnaissance, aerial refueling, maritime patrol, and aerial firefighting. It is a common 

tactical airlift for military forces. Over 70 models have been sold to more than 60 nations.659

 

In general, to transfer an item on the U.S. Munitions List to a non-U.S. person, the seller 

must apply for an export license from the State Department. The State Department forwards the 

application to relevant U.S. offices within the State Department, DOD, and other U.S. agencies 

to determine whether there are concerns about the proposed transfer. If the State Department 

intends to rule favorably on a proposed transfer and it involves items valued at $14 million or 

more, Congress must also be notified of the proposed transfer.660 Typically, the State 

Department notifies the House Foreign Affairs Committee and the Senate Foreign Relations 

Committee on an informal basis twenty days in advance of an official notification of the 

 

657 See ITAR regulations at 22 CFR §§ 120-130. 658 U.S. Department of State webiste, Directorate of Defense Trade Controls, 

http://pmddtc.state.gov/compliance/consent_agreements.html. 

659 See U.S. Air Force, Factsheets: C-130 Hercules, October 2009, http://www.af.mil/information/factsheets/ 

factsheet.asp?fsID=92. See also Lockheed Martin press release, “2300th Lockheed Martin C-130 Hercules Rolled 

Out,” October 4, 2006, http://www.lockheedmartin.com/news/press_releases/2006/2300THLOCKHEEDMARTIN 

C130HERCULESROL.html. 

660 See Section 36b of the Arms Export Control Act, codified at 22 U.S.C. § 2776(b). 
122 

proposed transfer so that the committees have sufficient time to consider it. Once the 

committees are formally notified, they have thirty days to object to the transfer.661

 Individuals like Mr. Birrell, who wish to negotiate the transfer of an item on the U.S. 

Munitions List, must register with the State Department as either a broker or general exporter.662 

In order to register, a prospective broker must submit an application to the State Department 

which either approves or rejects the application. Even if approved, registration of a broker does 

not convey authority to complete a transfer; it is only after a specific export license has been 

approved for the transfer that the applicant meets the legal requirements to act as a broker in the 

sale.663 Registered brokers are required to submit an annual report of their brokerage activities to 

the State Department; brokers that fail to do so are subject to civil action. In response to a 

Subcommittee question, State Department officials estimated that only about 1% of export 

license requests related to the U.S. Munitions List are denied.664

Documentation obtained by the Subcommittee demonstrates that, beginning in June 2005 

and continuing for at least two more years, Mr. Birrell expended substantial effort to complete 

the C-130 aircraft transaction initiated by President Omar Bongo. 

 

$17 Million Transfer. The first major event in connection with the C-130 aircraft 

transaction was the transfer of nearly $17 million into The Grace Group accounts at United Bank 

in Virginia in June 2005. The funds were provided through multiple wire transfers sent from 

Gabon by an entity called “Ayira.” Mr. Birrell declined to describe the origins or owners of 

Ayira or its relationship to President Omar Bongo. The documentation reviewed by the 

Subcommittee suggests that Ayira is a shell entity operating at the direction of President Omar 

Bongo.665 

 

On June 14, 2005, Mr. Birrell sent a letter to Abass Haidara Cherif, a senior advisor to 

President Omar Bongo and Mr. Birrell’s primary Gabonese government contact in the C-130 

aircraft transaction. In it, Mr. Birrell wrote: “The funds noted in our conversation can be sent to 

the following address. I will hold these funds in total until otherwise directed by you.” His letter 

then provided instructions for sending a wire transfer to The Grace Group LLC account at United 

Bank.666

Three days later, on June 17, 2005, a wire transfer for nearly $5 million was sent by 

Ayira from an account at BGFI Bank in Libreville, Gabon to the primary Grace Group account at 

 

661 Subcommittee interview of State Department officials, October 16, 2008. 662 ITAR Section 122.1. Individuals seeking to act as brokers must register; governments are not required to do so. 663 Subcommittee interview of State Department officials, October 16, 2008. 664 Id. 665 See, e.g., several other Ayira wire transfers sending funds to the daughter of President Omar Bongo, Ounaida 

Bongo. 3/14/01 wire transfer for $74,943.20 from Ayira to an Ounaida Bongo account at Citibank in Washington, 

D.C., A 00043084; 9/26/01 wire transfer for $99,733.09 from Ayira to the same Citibank account, A 00043103; and 

8/27/03 wire transfer for $64,882 from an Ayira account at BGFI Bank in Gabon to the same Citibank account, A 

00043219.

666 June 14, 2005 letter from Mr. Birrell to Mr. Haidara, Grace 0634. 
123 

United Bank.667 This wire transfer included the notation: “RSAF C-130E Aircraft.”668 On the 

same day The Grace Group received the funds, it transferred them to The Grace Group LLC 

Client Escrow Account, which Mr. Birrell and Ms. Duffy had opened earlier that day.669 

On June 29, 2005, Mr. Birrell sent Mr. Haidara an email acknowledging receipt of the $5 

million and asking him to convey certain information about the funds to President Omar Bongo. 

“Will you please advise President Omar Bongo of the following information. The Grace 

Group LLC has received $5,000,000.00 USD in its general operating account. These 

funds were received by wire. This same amount, minus wire transfer fees, has been redeposited into a separate account titled, ‘Grace Group LLC, Client Escrow Account.’ 

These funds will remain in this account until otherwise directed by the client. Expenses 

incurred by the Grace Group with specific regard to the purchase of the C-130s, will be 

deducted from this account and repaid to the Grace Group’s general operating account. 

A full accounting of these expenses will be made available to the client.”670 

This email makes it clear that the $5 million sent by Ayira was intended to be used to advance 

the C-130 aircraft purchase that President Omar Bongo had hired Mr. Birrell to help arrange. 

One month after the first $5 million wire transfer, Ayira sent The Grace Group two more 

wire transfers from Gabon providing another $12 million. On July 18, 2005, Ayira sent a wire 

transfer from BGFI Bank in Gabon to The Grace Group LLC Account No. xxxxx for nearly $6 

million.671 The wire transfer documentation again referenced “RSAF C 130 E Aircraft.” The 

next day, on July 19, 2005, The Grace Group LLC transferred the funds to its Client Escrow 

Account.672 Three days later, on July 21, 2005, Ayira sent another $6 million from its account in 

Gabon to The Grace Group LLC account at United Bank.673 Like the two prior emails, it 

referenced, “RSAF C 130 E Aircraft.” On July 26, 2005, The Grace Group transferred the funds 

into its Client Escrow Account.674

On July 22, 2005, The Grace Group Client Escrow Account withdrew $1 million from its 

account and wire transferred the funds to Mr. Haidara at KBC Bank in Brussels, Belgium.675 

The wire transfer documentation noted that the transfer was at the “Request of the Head of 

 

667 United Bank WireHouse Message Details, Psi-ub-000416-17. The actual amount transferred was $4,999,934, 

which appears to be $5 million less various fees. 

668 United Bank WireHouse Message Details, Psi-ub-000416-17. “RSAF” refers to the Royal Saudi Air Force. 669 6/17/05 United Bank transaction receipt, Psi-ub-000268; 6/17/05 United Bank Account Agreement, Psi-ub000133-34. 

670 6/29/05 email from Mr. Birrell to Mr. Haidara, Grace 0681. 671 7/18/05 United Bank WireHouse Message Details, Psi-ub-000422-23; 7/18/05 United Bank Funds Transfer 

Notification, Grace 0276. The amount sent was $5,999,934, which appears to be $6 million less various fees. 672 July 2005 United Bank Statement for The Grace Group Client Escrow Account, Psi-ub-000240, showing a July 

19 “PHONE TSFR-CREDIT” depositing $5,999,934 into the account. See also 7/19/05 United Bank documents 

showing transfer between the two accounts, Psi-ub-000269. 

673 7/21/05 United Bank WireHouse Message Details, Psi-ub-000426-27. 674 July 2005 United Bank Statement for The Grace Group Client Escrow Account, Psi-ub-000240, showing a July 

26 “PHONE TSFR-CREDIT” depositing $5,999,934 into the account. See also 7/26/05 United Bank documents 

showing transfer between the two accounts, Psi-ub-000270. 

675 7/22/05 United Bank WireHouse Message Details, Psi-ub-000428-29. 
124 

State.” Since all of the funds in the escrow account came from the Ayira wire transfers, this 

transaction indicates that Mr. Birrell was willing to and did disburse the Ayira funds at the 

direction of President Omar Bongo, including by sending them to a Belgium account in the name 

of his advisor, Mr. Haidara. Mr. Birrell did not explain the purpose of this transfer or how it may 

have related to the C-130 aircraft transaction.676 

Registered Broker. On July 29, 2005, Mr. Birrell applied to register The Grace Group 

LLC with the State Department as a broker to sell aircraft and vehicles on the U.S. Munitions 

List.677 Mr. Birrell was the only signatory on the application and signed as the “Managing 

Member” of The Grace Group, even though in December 2004, a change of agent form had been 

filed with the State of Virginia and replaced Mr. Birrell with his wife as the sole managing 

member or owner of the company.678 The State Department approved the brokering application 

in August 2005.679 

 At the end of the year, Mr. Birrell sent a letter to the State Department reporting on his 

brokerage activities during 2005. His letter stated that The Grace Group “had no brokering 

activities” during 2005, but had applied for authorization to broker a transfer of C-130 aircraft 

from Saudi Arabia to Gabon.680 The letter also stated that authorization had been granted on 

January 17, 2006. The next year, on January 25, 2007, Mr. Birrell sent a letter reporting on his 

brokerage activities during 2006, and again described his effort to broker the proposed transfer of 

C-130 aircraft from Saudi Arabia to Gabon.681 His letter stated that an export license had been 

approved for the transfer in August 2006, but the transfer had not yet taken place.682

Brokering Authorization. Once The Grace Group received approval to act as a broker 

for materials on the U.S. Munitions List, the next step in the C-130 aircraft transaction was for 

Mr. Birrell to file a request with the State Department’s Directorate of Defense Trade Controls 

(DDTC) to authorize The Grace Group to broker a sale of the C-130 aircraft owned by Saudi 

Arabia to Gabon. 

 

676 A month later, on August 31, 2005, The Grace Group Client Escrow Account wire transferred $200,000 to 

Mr. Haidara at a bank account at Societe Generale Agency Fontenoy in Paris. 8/31/05 United Bank WireHouse 

Message Details, Psi-ub-000430-31. The notation on the wire transfer documentation stated that the money was to 

“Feed starving refugees in Mali and Niger.” 

677 7/29/05 U.S. Department of State Statement of Registration, Grace 0749. 678 See 10/20/04 Commonwealth of Virginia Statement of Change of Registered Office and/or Registered Agent, 

Grace 1124. See also 7/28/05 letter from Mr. Birrell to DTCC, Grace 0620. 679 Subcommittee interview of State Department officials, October 16, 2008. See also 10/24/05 email from 

Mr. Birrell to the U.S. Ambassador to Gabon, Grace 0589 (“The Grace Group LLC ... received its Brokering 

License (Brokering Registration Code K-1117) from the Department of State in August 2005.”). 

680 1/31/06 letter from Mr. Birrell to the State Department, Grace 0774. Mr. Birrell signed the letter as “President & 

Senior Managing Member” of The Grace Group LLC, even though in Virginia records, his wife was then the sole 

managing member of the company.

681 1/25/07 letter from Mr. Birrell to the State Department, Grace 0723-24. 682 Mr. Birrell again signed the letter as “President & Senior Managing Member” of The Grace Group, even though 

it would not be for another ten months that he would file a change of agent form with the State of Virginia replacing 

his wife as the sole Managing Member of the company. 10/21/07 Commonwealth of Virginia Statement of Change 

of Registered Office and/or Registered Agent, Grace 1110-11. 
125 

Mr. Birrell filed the necessary application with the DDTC in August 2005. Initially, The 

Grace Group proposed a two-step process involving another U.S. company, Hoover Aviation, 

Inc., based in Texas. In its August 18, 2005 letter to the DDTC, Mr. Birrell proposed that six C130 aircraft “be sold by the Saudi government to Hoover Aviation, who in turn will sell two of 

them to an end-user in Gabon,” and requested approval for The Grace Group to broker the sale of 

the two C-130 aircraft to the Gabon end-user.683 Mr. Birrell’s letter identified Hoover Aviation 

as the seller of the two aircraft and Delta Synergie, a “privately owned Gabon company that is 

owned in part by Gabon’s head of state,” as the purchaser.684 

A month later, Hoover Aviation was dropped from the transaction.685 In September 

2005, Mr. Birrell sent a letter to the DDTC amending his brokering application so that the seller 

of the C-130 aircraft would no longer be Hoover Aviation, but the Government of Saudi 

Arabia.686

In October 2005, Delta Synergie sent a formal request to the State Department for 

authorization to “reexport” the C-130 aircraft from Saudi Arabia to Gabon. On October 13, 

2005, Henri Claude Oyima, the “Administrateur Directeur General of Delta Synergie,” wrote to 

the DDTC requesting authorization for Delta Synergie, “a privately owned Gabon company 

owned in part by Gabon’s Head of State (in his private capacity)” to purchase two C-130 aircraft 

from the Royal Saudi Air Force.687 Mr. Oyima described Delta Synergie as “a cargo and freight 

company established to develop an intra-gabonese trade and distribution network,” and stated 

that the planes would be used for “transporting heavy loads and for short takeoffs and landings at 

Gabon’s airfields.”688

The documentation reviewed by the Subcommittee indicates that Mr. Birrell expected the 

brokering application to be approved and the sale consummated within a few months. The funds 

to purchase the first two aircraft had already been sent to the Grace Group in June and July. On 

July 18, 2005, Mr. Birrell obtained an “escrow kit” from an aircraft title insurance company to 

safeguard the funds during the purchase.689 On August 31, 2005, Mr. Birrell obtained a letter 

from United Bank confirming that $10 million was available in Grace Group accounts to 

purchase the aircraft.690 On September 4, 2005, Mr. Birrell sent a series of letters tendering a 

formal offer to the Royal Saudi Air Force (RSAF) to purchase two C-130 aircraft for $4.3 

million each and four more for $4.5 million each;691 engaging a retired RSAF Brigadier General, 

 

683 8/18/05 letter from Mr. Birrell to DDTC, Grace 0614-16. 684 Id., at Grace 0615. 685 8/31/05 letter from Mr. Birrell’s legal counsel to Hoover Aviation, Grace 0612. 686 9/15/05 letter from Mr. Birrell to DDTC, Grace 0601-2. See also Subcommittee interview of State Department 

officials, October 16, 2008. 

687 10/13/05 letter from Mr. Oyima to DDTC, Grace 0593-95. 688 Id., at Grace 0595. 

689 7/18/05 email from Mr. Birrell to Mr. Haidara, Grace 0631. Mr. Birrell contacted Insured Aircraft Title Services, 

Inc. (IATS), the same company cited in the Obiang case history. Mr. Birrell wrote: “I think with a lawyer and with 

the title company (and the two of us watching the funds) we can conduct this purchase without any problems.” See 

also 11/07 draft Aircraft Purchase Agreement, Grace 0457, a provision indicating that Mr. Birrell had intended to 

use IATS as the escrow agent during the actual purchase of the C-130 aircraft. 

690 8/31/05 letter from United Bank to Mr. Birrell, Grace 0613. 

691 9/4/05 letter from Mr. Birrell to the Royal Saudi Air Force, Grace 0606-07. 
126 

Hamid Bakhsh, to assist in the sale;692 and later raising the offer to $4.5 million per airplane for a 

total of $27.6 million.693 Later in September, Mr. Birrell traveled to Saudi Arabia to advance the 

transaction.694 On October 18, 2005, the Grace Group Escrow Client Account wire transferred 

$136,765 to a Saudi company, Al Ahnaf Trading, to arrange to fly the aircraft to Gabon.695 

While waiting for the State Department to rule on his brokering application, Mr. Birrell 

contacted the U.S. Ambassador to Gabon, Barrie Walkley, with whom he was personally 

acquainted, about the proposed transaction and enlisted his help. In an October 4, 2005 email, 

the Ambassador stated: “Regarding the C-130, we’ll do all we can to help. Please talk to the 

Charge when you are in Libreville, as well as our Defense Attache.”696 On October 24, 

Mr. Birrell sent an email “to follow up on your kind offer to assist President Omar Bongo (via a 

private company in Gabon i.e. Delta Synergie) obtain two C-130E aircraft for regional 

commercial transport operations.”697 Mr. Birrell wrote: 

“It would be very helpful to know the status of this submission and to know how the 

process can be moved along. President Omar Bongo raised this matter with you directly 

many months ago and he is very interested in a timely resolution. These types of aircraft 

are in great demand and any further delay in this process could greatly impair this 

purchase. ... [A] call from you or [your staff] to ... DDTC ... to determine the status of 

this submission would be most helpful and may speed the approval process.” [Emphasis 

in original.] 

Denial of Application. Despite Mr. Birrell’s efforts, in early November, the State 

Department denied his application to broker the transfer of the C-130 aircraft. 

 

692 9/4/05 Agreement of Services, Grace 0280-81; 9/4/05 letter from Mr. Birrell to Mr. Bakhsh, Grace 0285; 9/30/05 

United Bank account statement, Grace 0056 (Grace Group Client Escrow Account check for $5,000 to Hamid Baksh 

for “Advance Commission C-130 Project.”). 

693 9/23/05 letter from Mr. Birrell to the Royal Saudi Air Force, Grace 0599. 

694 See 3/8/06 memorandum prepared by The Grace Group, Grace 0792-93 (“In September 2005, members of The 

Grace Group, LLC, and the firm’s legal counsel, traveled to Saudi Arabia and met with senior officials of the Royal 

Saudi Air Force (RSAF) to discuss the availability of its C-130 air craft.”); Grace 0056 (Grace Group Escrow 

Account check for $18,352 issued to Grace Group LLC for “9/27/2005 Ep. Rep. SA trip C-130.”). 

695 10/18/05 United Bank WireHouse Message Details, Psi-ub-000436; United Bank International Wire Transfer 

Authorization, Grace 0218. The wire transfer documentation included the notation: “1st half of the payment for 

C130E.” See also September 28, 2005 agreement among Delta Synergie, Sofab Aerospace, and Al-Ahnaf Trading, 

in which Al-Ahnaf Trading agreed to help “move two (2) C-130 aircrafts from Jeddah to Gabon.” Grace 0627. On 

November 18, 2006, Sofab Aerospace sent an invoice for $254,360 to Delta Synergie for the cost of moving two C130 aircraft. Grace 0705. The invoice notes that “payment may be made to Al Ahnaf Trading.” 

One action which raises questions about President Omar Bongo’s true intent regarding the transaction at 

this point was the withdrawal in late October of more than $3 million from the funds that The Grace Group had set 

aside for the C-130 purchase. On October 22, 2005, The Grace Group Client Escrow Account wire transferred 

$3,061,809 to Mr. Haidara at KBC Bank in Brussels, due to a “Request by the head of the State.” United Bank 

WireHouse Message Details, Psi-ub-000438-39. See also The Grace Group LLC Client Escrow Account statement 

for October 2005, Psi-ub-000244-45. The purpose of this transfer, which depleted the funds needed for the C-130 

aircraft purchase, is unclear. After this transfer, The Grace Group Client Escrow Account had about $11.6 million 

left for the C-130 transaction. 

696 10/4/05 email from Ambassador Walkley to Mr. Birrell, Grace 1091. 697 10/24/05 email from Mr. Birrell to Ambassador Walkley, Grace 0589. Mr. Birrell was personally acquainted 

with the Ambassador. See 10/4/05 email from requesting him to bring frozen turkeys to Gabon in time for 

Thanksgiving if possible. 
127 

During October, several U.S. officials had raised objections to the proposed transfer. On 

October 6, 2005, DOD sent a memorandum to the State Department objecting to export of the C130 aircraft to Gabon for “what appears to be non military use.”698 The DOD memorandum 

stated: “DOD is unclear as to what State’s intent was by staffing a brokering agreement that 

appears to be an unlawful export transaction.”699 An October 24 email from a State Department 

employee also objected to the proposed transfer, noting that “permitting the sale of two C-130s 

to any private African party is inviting mischief.”700

 

On November 3, 2005, the State Department sent a letter to Mr. Birrell denying his 

application to broker the sale of the C-130 aircraft to Delta Synergie. The letter explained: 

“Commercial ownership and end use of C-130 aircraft for transportation of goods by a private 

company as outlined in this request is inconsistent with the provisions of the Arms Export 

Control Act pertaining to exports in support of internal security or self defense.”701

 When asked about this decision, the State Department told the Subcommittee that it had 

two reasons for denying the brokerage application, involving both the proposed end use and the 

proposed end user.702 First, the State Department told the Subcommittee that the particular 

military capabilities of the C-130 aircraft rendered them inappropriate for “in country transport 

and regional trade,” since such activities do not require military grade aircraft. The State 

Department said these commercial needs could be met with an L100 aircraft. Second, the State 

Department told the Subcommittee that Section 4 of the Arms Export Control Act states that 

private end buyers are not qualified to receive military items such as C-130 aircraft. 

State Department representatives told the Subcommittee that, had they seriously 

considered approving the transfer, they would have investigated the proposed end user, Delta 

Synergie, more closely.703 The State Department also stated that it does not usually look at how 

the transactions it approves will be financed. 

Approval of Revised Application. Two weeks after the application was denied, The 

Grace Group re-applied to broker the sale of the C-130 aircraft. Its new application, dated 

November 18, 2005, proposed selling the six C-130 aircraft to the Government of Gabon, rather 

than Delta Synergie, and proposed using the aircraft for humanitarian peacekeeping missions 

 

698 10/6/05 Official Department of Defense Position for Munitions Case BA L0039-05, PSI State Dept. 03-0028. 699 Id. 700 The October 24, 2005 internal State Department email, PSI State Dept. 03-0042, also states: “The U.S. 

Applicant, Jeffrey Birrell, of The Grace Group LLC, is likely the same person who is mentioned in a Justice Dept. 

investigation during the Clinton years, which targeted a Belgian lobbyist [redacted by Subcommittee], who obtained 

secret USG documents, and tried to sell the[m] to different African leaders. Birrell worked (or, maybe still does) for 

a Washington, D.C. African lobbying company that bears his name. Through intermediaries mentioned in this 

report, Birrell could have had tangential contacts with [redacted], who later reportedly was a gray arms dealer in 

profitable gun-running to various African countries. Even if the Gabon company said they knew all about the C-130 

purchase, we’d have no way of knowing whether they’d turn around and lease the C-130 to bad parties in 

neighboring countries. If you can provide some reasoning for us to go forward with the BL (reasons to approve the 

potential sale), I could incorporate those reason[s] into a BL cable. But, I’ve still got a bad feeling, overall, about 

approving these a/c/ for sale.” 

701 11/3/05 letter from the State Department to Mr. Birrell, Grace 0588. 702 Subcommittee interview of State Department officials, October 16, 2008. 703 Id. 
128 

rather than commercial trade.704 The application apparently proposed the new end user and new 

end use for the aircraft to address the objections raised to the prior brokering application. 

Around the same time that Mr. Birrell filed the new application, he wire transferred 

nearly $750,000 in consulting fees to persons outside of the United States. On November 16, 

2005, The Grace Group Client Escrow Account wire transferred $496,500 to Michael Moussa at 

Rothschild Bank in Monaco.705 The wire transfer documentation included the notation: 

“Business Consulting Agreement.” On November 18, 2005, The Grace Group Client Escrow 

Account wire transferred $250,000 to Maxime Gandzion at KBC Bank in Brussels.706 The wire 

transfer documentation included the notation: “Consulting Fee.” The Subcommittee attempted 

to contact both individuals to inquire about their role in the C-130 transaction, but was unable to 

reach either individual, and Mr. Birrell declined to provide contact information for either person. 

On November 22, 2005, Mr. Birrell sent a memorandum to his C-130 consultant in Saudi 

Arabia, retired RSAF Brigadier General Bakhsh, providing an update on the second 

application.707 Mr. Birrell wrote: 

“[W]e are attempting to receive official U.S. government approval on an expedited basis. 

To this end, our legal team is working closely with their counterparts within the 

Department of State and I have separately engaged the U.S. Ambassador to Gabon to 

inquire as to the status of this submission. I believe that he has offered his points to the 

central decision makers.” 

Mr. Birrell asked General Bakhsh to advise Saudi officials of his ongoing efforts and the 

remaining approval process. He also offered comments on a draft contract to purchase the C-130 

aircraft. 

 On December 2, 2005, Mr. Birrell sent a letter to the State Department’s DDTC urging 

them to approve the proposed transfer: 

“This request ... is now extremely time sensitive. ... In planned meetings next week 

with the Assistant Secretary of State for Africa on this and other matters, I would very 

much like to report that this request has been acted upon and is being processed. ... 

[A]ny and all expedited treatment that can be afforded this request will be greatly 

appreciated by the Gabonese government and this firm.”708 

On December 8, 2005, Mr. Birrell sent President Omar Bongo a three-page letter 

updating him on the C-130 transaction and other matters. 709 Mr. Birrell began the letter by 

congratulating President Omar Bongo on his recent re-election to office. He wrote: “It was a 

pleasure to organize the U.S. Assessment and Observation Team.” 

 

704 11/18/05 The Grace Group LLC Application, PSI State Dept. 03-0051; Subcommittee interview of State 

Department officials, October 16, 2008. 

705 United Bank WireHouse Message Details, Psi-ub-000440-43. 706 Id., at 000442-43. 707 11/22/05 memorandum from Mr. Birrell to Gen. Bakhsh, Grace 0585-87. 708 12/2/05 letter from Mr. Birrell to DDTC, Grace 0583-84. 

709 12/8/05 letter from Mr. Birrell to President Omar Bongo, Grace 0580-82. 
129 

Mr. Birrell discussed some meetings in Washington on other matters related to Gabon, 

and then spent the next two pages providing a detailed description of his efforts to advance 

acquisition of the C-130 aircraft. Among other matters, Mr. Birrell described several actions 

taken by Ambassador Walkley, including meeting with DDTC officials, writing to the Assistant 

Secretary of State, and directing his Defense Attache to contact DOD. Mr. Birrell concluded by 

stating that “all of the necessary approvals can be received ... over the next two weeks.” 

One month later, on January 17, 2006, the State Department approved the new 

application to broker the sale, stating in its approval letter that the C-130 aircraft would be used 

by the Gabon government “to support the following missions: 

a. Government and military transport of cargo and/or Personnel, 

b. Support for regional peacekeeping missions, 

c. Response to international disaster, 

d. Search and rescue operations on a regional and sub-regional basis, 

e. Border and coastal observations.”710

DOD offered “no objection” to the sale.711 

The State Department told the Subcommittee that it approved the new application 

because it addressed both of the Department’s earlier concerns, by specifying new noncommercial end uses for the aircraft and by specifying a new end user, the Government of Gabon 

rather than a private company partially owned by President Omar Bongo.712 

Export License. Once Mr. Birrell’s brokering application was approved by the State 

Department, the next step in the process was to submit an application to the State Department for 

formal approval to re-export the aircraft from Saudi Arabia to Gabon. That application had to be 

filed by the seller, Saudi Arabia. 

On December 13, 2005, Mr. Birrell sent a letter to the Royal Saudi Air Force stating that, 

to advance the transaction, the RSAF needed to send a letter to the State Department requesting 

re-export of the aircraft.713 On December 16, 2005, Mr. Birrell wire transferred $184,000 from 

 

710 1/17/06 letter from State Department to Mr. Birrell, Grace 0696-97. The documentation suggests that 

Mr. Birrell contributed to the identification of these non-commercial uses for the C-130 aircraft. In a September 

2005 letter to the RSAF, for example, Mr. Birrell suggested using the aircraft for “famine relief efforts in the 

Western Sahara that have been organized by” President Omar Bongo and others. Grace 0599. In a September 5, 

2006 email to Mr. Haidara, Mr. Birrell wrote: “Gabon can ‘help’ the [Saudi] Kingdom with political-military affairs 

in the Middle East. The Kingdom cannot fly in relief supplies to Palestine (or neighboring states) w/o dealing 

directly with Israel. This alliance between El Hadj and Abdullah could be very useful to the Kingdom.” Grace 

0750-51. 

 In a later memorandum, dated March 13, 2006, Mr. Birrell described a meeting with United Nations 

officials to discuss leasing the aircraft to the United Nations for peace keeping operations. Mr. Birrell wrote: 

“[T]here is a terrific demand for these planes and the return on investment of leasing to the United Nations or other 

organization[s], government or private contractor, is very positive.” Grace 0789. 711 See 11/21/05 Official DOD Munitions Case BA-L-0061-05, PSI-State_Dept-03-0057. 712 Subcommittee interview of State Department officials, October 16, 2008. 713 12/13/05 letter from Mr. Birrell to Mr. Al Faisal, Grace 0569. Mr. Birrell wrote: “Because the re-export of these 

military items falls under specific U.S. law regarding their transfer, the Grace Group LLC has been instructed by the 
130 

The Grace Group Client Escrow Account to General Bakhsh, labeling it a “consulting fee aircraft 

purchase.”714

 

After two months, in February, Mr. Birrell traveled to Saudi Arabia and “obtained a 

signed and official ‘Re-export Request’ from the Commander of the Royal Saudi Air Force.”715 

The letter was submitted to the State Department on February 23, 2006.716 

On March 12, 2006, the RSAF sent a memorandum to Mr. Birrell accepting Gabon’s 

offer to purchase its six C-130 aircraft for $27.6 million.717 The memorandum also stated that 

the price had to be paid within five days or the “offer will be invalid.” A month later, on April 

11, 2006, The Grace Group Client Escrow Account wire transferred $124,152 to Al Ahnaf 

Trading, the Saudi company that had agreed to help fly the C-130 aircraft to Gabon.718

On April 21, 2006, the State Department issued a letter to Mr. Birrell approving the reexport of the six C-130 aircraft to Gabon.719 Because the $27.6 million sales price for the 

aircraft exceeded the $14 million threshhold, however, the letter stated that approval of the 

transfer required one last step, notification to Congress: 

“The Department of State has no objection in principle to approving the re-export of 

these six (6) C-130E aircraft from the Government of the Kingdom of Saudi Arabia to the 

Government of Gabon. This transaction, however, does require Congressional 

Notification. We are in the process of informing Congress of this transaction and we will 

advise you when final approval can be given.” 

Mr. Birrell had attempted to convince the State Department to issue final approval of the 

transaction without notifying Congress. In an April 18, 2006 email to the State Department’s 

Congressional Advisor for Political-Military Affairs, Mr. Birrell wrote: “[T]his C130 re-export 

has been approved but we’ve [been] at this for nearly a year. If the approval now moves thru the 

Congressional notification process, I believe that both the Saudi government and the Gabonese 

government will abandon the effort.”720 In an undated 2006 email to Ambassador Walkley, 

Mr. Birrell wrote: 

 U.S. Department of State to seek a letter of application from an authorized Saudi official requesting a re-export 

license.” 

714 United Bank WireHouse Message Details, Psi-ub-000448-49. See also a 12/24/05 letter from General Bakhsh to 

the RSAF requesting the needed letter on the C-130 transfer, Grace 0571. 715 3/8/06 “confidential” memorandum prepared by The Grace Group, Grace 0792-93. On February 19, 2006, The 

Grace Group Client Escrow Account issued a check to General Bakhsh for another $50,000. Grace 0080. 716 Undated letter from RSAF to the State Department, Grace 0806-07. The letter noted: “These aircraft were sold 

to the Government of the Kingdom of Saudi Arabia in a direct commercial sale by the Lockheed Martin Corporation 

in the United States. The Gabonese Ministry of Defense will be the end-user of these C-130E aircraft.” See also 

3/8/06 “confidential” memorandum prepared by The Grace Group, Grace 0792-93 (“On February 23, 2006, the 

official request from the RSAF was supplied to [DDTC].”). 717 3/12/06 memorandum from RSAF to Mr. Birrell, Grace 0718. 718 4/11/06 United Bank International Wire Transfer Authorization, Grace 0217. 

719 4/21/06 letter from State Department to Mr. Birrell, Grace 0556. See also 4/12/06 Official DOD Position for 

Munitions Case GC-0247-06, PSI State Dept. 03-0083 (position listed as “no objection”). 720 4/18/06 email from Mr. Birrell to the State Department, PSI State Dept. 03-0086-89. 
131 

“If the now-approved re-export is tossed up to the Hill, the deal is dead. President Omar 

Bongo will just back out and all of this will have been for nothing. Worse than that, the 

President will see this as another indication of his lesser status in Washington and it will 

prove to be problematic in other areas. And after all, these air craft will be put to good 

use – as we have discussed on many occasions.”721

Despite Mr. Birrell’s efforts, the State Department followed its standard practice and 

provided informal notice of the proposed C-130 transfer to the key Congressional Committees 

prior to sending an official notice. In response, a Congressional staffer raised a number of 

questions about the transaction which the State Department relayed to Mr. Birrell to help 

answer.722

On April 24, 2006, The Grace Group Client Escrow Account wrote a check for $9.2 

million to United Bank, to purchase two cashiers checks.723 Each cashiers check was for $4.6 

million, and each was made payable to HH Prince Abdurrahaman Al Faisal.724 In late April, 

Mr. Birrell traveled to Saudi Arabia, presumably to provide the checks to the Saudi Government 

to purchase the first two C-130 aircraft.725

On May 1, 2006, however, Mr. Birrell returned to United Bank and re-deposited the two 

cashiers checks into The Grace Group Client Escrow Account.726 According to United Bank, 

Mr. Birrell told the bank that he didn’t use the checks, so United Bank wrote “not used for 

purpose” on the back of the checks and credited the money back to the Grace Group escrow 

account.727

During June and July, Mr. Birrell continued to press the State Department for final 

approval of the transfer.728 In mid-July, the key Congressional Committees unofficially cleared 

the transfer. On July 20, 2006, Mr. Birrell sent a letter to the Saudi Defense Attache with the 

news, quoting an undated email from a State Department official as follows: 

 

721 Id. 722 5/17/06 DOD questions and responses regarding the C-130 transfer, PSI State Dept. 03-0102-3; 5/1/06 email 

from the State Department to Mr. Birrell with questions about the proposed C-130 transfer, Grace 0812; 5/2/06 letter 

from Mr. Birrell to Saudi Defense Attache requesting assistance in answering the Congressional questions, Grace 

819-21; chart sent by Mr. Birrell to the Saudi Defense Attache with the Congressional “inquiries,” “Grace 

comments,” and “RSAF Responses,” Grace 0817. 

723 4/24/06 check from The Grace Group LLC, Grace 0083; Subcommittee interview of United Bank officials, 

5/5/07. 

724 United Bank copies of the cashier checks, Psi-ub-000279. 725 See 5/1/06 email from Mr. Birrell to a State Department official, Grace 0812 (“I’ve just come back from Riyadh 

where I had meetings with the RSAF Commander.”). 

726 April 2006 United Bank statement, Psi-ub-000254; Subcommittee interview of United Bank officials, 5/5/07. 727 Subcommittee interview of United Bank officials, 5/5/07. 728 See, e.g., 6/9/06 letter from Mr. Birrell to the Royal Embassy of Saudi Arabia, Grace 0837; 7/12/06 letter from 

Mr. Myer to U.S. Department of State, Grace 0848; 7/17/06 email, Grace 0871; 6/30/06 letter from Mr. Birrell to the 

Royal Embassy of Saudi Arabia, Grace 0873-74. 
132 

 

“Jeff, 

 You can use this email. The Hill has pre-cleared the case. While there always 

exists the possibility of a resolution of disapproval in an effort to block the sale, I would 

not expect one in this case. That is why we work so hard to pre-clear the cases. I will 

also seek to have the informal 20 day period waived; however, that might prove a stretch. 

Please tell the Kingdom that we appreciate their patience and support during this period 

of time that we worked with our Congress. This delay had nothing to do with the source 

of the aircraft; yet there were some issues, that have been resolved, with the destination 

of the planes. 

VR, John”729

On July 24, 2006, the State Department formally notified Congress of the proposed C130 aircraft transfer.730 After a month, the Saudi Government expressed frustration that the 

export license for the transfer had not yet been issued. On August 22, 2006, a Saudi official 

informed the Grace Group by letter: “[I]f you are unable to get issued the re-export license by the 

US [D]epartment of State in 30 days from 22nd August your Offer will be invalid and these will 

be sold to [an]other company.”731

Congress officially cleared the transaction on August 24, 2006.732 On the same day, the 

State Department sent a letter to Mr. Birrell stating: “The Department of State has no objection 

to the permanent re-export of the six (6) C-130 B/E aircraft and approves your request.”733

 Sale Falls Through. It had taken nearly one year for the State Department to approve 

the transfer of the C-130 aircraft from Saudi Arabia to Gabon. During the delay, Saudi officials 

had expressed increasing skepticism that Gabon would finalize the transaction. In May 2006, for 

example, Mr. Birrell learned from retired RSAF General Bakhsh that the RSAF did not think that 

The Grace Group had enough money to buy all six C-130 planes.734 Mr. Birrell responded by 

writing a letter to the Saudi Arabian Embassy: “We are committed to accept and to pay for the 

aircraft in pairs of two. As the Grace Group is operating with funds provided by the Gabonese 

Government, the ability to pay for the aircraft is not in question.”735 [Emphasis in original.] 

At some point, however, Mr. Birrell was informed that President Omar Bongo was 

considering cancelling the purchase. In a September 6, 2006 letter to President Omar Bongo, 

Mr. Birrell strongly advised against cancellation.736 Mr. Birrell wrote: “[T]he Grace Group has 

 

729 7/20/06 letter from Mr. Birrell to the Royal Embassy of Saudi Arabia, Grace 0767. 730 Subcommittee interview State Department officials, October 16, 2008. 731 8/22/06 letter from the Saudi Government to the Grace Group, Grace 0757. 732 Subcommittee interview of State Department officials, October 16, 2008. See also official State Department 

approval pursuant to Section 36(D) of the Arms Export Control Act at PSI State Dept. 03-0110-12. 

733 8/24/06 letter from the U.S. State Department to Mr. Birrell, Grace 0754-55. 734 5/20/06 email from General Bakhsh to Mr. Birrell, Grace 0826. 735 5/25/06 letter from Mr. Birrell to the Saudi Defense Attache, Royal Embassy of Saudi Arabia, Grace 0832-34. 736 9/6/06 letter from Mr. Birrell to President Omar Bongo, Grace 0752-53. 
133 

travel[ed] to Saudi Arabia on six occasions and held lengthy and complicated negotiations with 

senior staff officers of the Royal Saudi Air Force and others in the Saudi Government” regarding 

the C-130 transfer. He warned that a cancellation of the sale “will invite the negative review of 

the White House, the Departments of State and Defense and the Congress. ... [It] will likely have 

a negative impact on Your Excellency’s personal relationship with King Abdullah and with the 

Royal Saudi Government. ... [It] will have negative financial ramifications for Your 

Excellency.” Mr. Birrell also stated, however, that should President Omar Bongo “wish the 

immediate return of the funds held in escrow ... I will transfer the total remainder within 24 

hours and without question or exception.” 

On September 18, 2006, Mr. Birrell sent an email to President Omar Bongo’s legal 

counsel, Francois Meyer, requesting an additional $10.6 million so that The Grace Group could 

complete the purchase of the six C-130 aircraft.737 He also sent copies of the email to President 

Omar Bongo and Mr. Haidara. Although United Bank records do not show any influx of funds 

as a result of that request, the documentation also suggests that President Omar Bongo appears to 

have accepted Mr. Birrell’s advice and determined to complete the purchase of the aircraft. 

 On October 24, 2006, President Omar Bongo sent a letter to Saudi Prince Sultan Bin 

Abdelaziz stating that Gabon was ready to purchase the six C-130 aircraft for $27.6 million, 

would begin by purchasing two for cash, and would purchase the remaining four aircraft soon 

after.738 Three days later, Mr. Birrell sent a letter to Prince Bandar Bin Mohamed Bin Abdul 

Rahman Al Saud stating that he had met with President Omar Bongo on October 25th regarding 

the aircraft, and offered to “assist the Kingdom identify potential buyers for any [other] surplus 

items it may wish to sell and to obtain any and all required re-export approval from the United 

States Government.”739 

In November, Mr. Birrell once again prepared two cashiers checks related to the C-130 

transaction. On November 10, 2006, he withdrew $9.2 million from the Grace Group Client 

Escrow Account and purchased two cashiers checks.740 Each cashiers check was for $4.6 

million, and each was made payable to the “Royal Saudi Air Force, Kingdom of Saudi 

Arabia.”741 Although difficult to read, the internal debit slip for the cashiers checks appears to 

state: “to purchase two official checks per Mr. Birrell request” and “for Grace Group LLC C130 Purchase.”742 

On November 12, 2006, Mr. Birrell sent a letter to the RSAF stating: “At the request of 

the Gabonese Republic, I am providing to the Royal Saudi Air Force with two ‘Official Bank 

Checks’ in the amount of $4,600,000 USD each. These checks are for payment of two C-130 

aircraft ... to be counted against the total transaction cost for all six aircraft.”743 A few days 

later, on November 18, 2006, Mr. Birrell sent a letter to the RSAF stating: “The Gabonese 

 

737 9/18/06 email from Mr. Birrell to “avocatfm,” Grace 0748. 738 10/24/06 letter from President Omar Bongo to Saudi Prince Sultan Bin Abdelaziz, Grace 0554-55. 

739 10/27/06 letter from Mr. Birrell to the Prince, Grace 0725. 740 United Bank debit slip, Grace 0354; October 2006 United Bank statement, Psi-ub-000261. 741 11/10/06 cashiers checks, Grace 0355. 742 United Bank debit slip, Grace 0354. 743 11/12/06 letter from Mr. Birrell to the Saudi Government, Grace 0714. 
134 

Government is fully committed to buying all six C130 aircraft.”744 The letter also stated, 

however, that President Omar Bongo would like to proceed by immediately purchasing two of 

the aircraft with “the next four aircraft with some delay, but as soon as possible.” The letter 

asked to meet that day “to conclude this matter.” 

A month later, on December 14, 2006, Mr. Birrell sent another letter to the RSAF 

proposing that Gabon pay $9.2 million in cash for the two C-130 aircraft and $18.4 million for 

the remaining four aircraft within 30 to 45 days.745 The letter noted that Mr. Haidara, 

representing Gabon, “has been in Riyadh for several weeks” and “has $9.2 million in hand.” It 

stated that Mr. Haidara “is urgently needed by President Omar Bongo in India on very pressing 

matters” and asks to complete “the first part of this transaction as soon as possible.” On 

December 16, 2006, Mr. Birrell wire transferred $50,000 to General Hakhsh in Saudi Arabia as a 

“Consultant Fee: Aircraft Purchase.”746 

Another month passed with no apparent progress. It is not clear why the sale was not 

consummated by Saudi Arabia at this time. 

On January 30, 2007, Mr. Birrell sent a letter to Francois Meyer, President Omar Bongo’s 

legal counsel, about the C-130 transaction: 

“It was my pleasure to meet you again in Riyadh, Saudi Arabia. ... I trust ... you can 

now offer a briefing to [President Omar Bongo] that will result in a definitive course of 

action. Any decision taken by His Excellency regarding [sic] will have my complete 

support.”747

Mr. Birrell provided him with a summary of the expenses associated with the C-130 transaction 

over the 18-month period from June 2005 to the end of 2006. He indicated that of the $17 

million he had received in connection with the transaction, he had allocated $6.8 million to 

Mr. Haidara, $304,000 to “Consultants,” and $253,299 to The Grace Group for expenses. He 

had also prepared two $4.6 million checks for the RSAF, though the RSAF had yet to accept or 

cash them. 

 By early February 2007, the C-130 aircraft sale had been cancelled. On February 3, 

2007, Mr. Birrell sent an email to Mr. Meyer stating: 

“Thank you for your letter of February 2, 2007. As noted, I will need you to return to me 

the two certified checks which are payable to the Kingdom of Saudi Arabia. Please send 

 

744 11/18/06 fax copy of the letter sent by The Grace Group to the RSAF, Grace 0712. Also on November 18, 2006, 

Sofab Aerospace sent an invoice for $254,360 to Delta Synergie for the cost of moving two C-130 aircraft to Gabon. 

Grace 0705. The invoice notes that payment may be made to Al Ahnaf Trading. According to a 7/14/06, United 

Bank email, “Mr. Birrell just stopped by and told me that he is expecting $10,600,000.00 incoming wire from his 

client, when I asked him about the wire, he told me that this [sic] funds is for purchasing of the C130 plan[e].” PSIUnited_Bank-05-000028. 

745 12/14/06 letter from Mr. Birrell to Lt. General Abdul Rahman Bin Fahad Al Faisal, Royal Saudi Air Force 

Commander, Grace 0685. 

746 12/16/06 United Bank International Wire Transfer Authorization, Grace 0283. 747 1/30/07 letter from Mr. Birrell to Mr. Meyer, Grace 0374-75. 
135 

these checks to my office. ... I will redeposit these in the account and wire these funds to 

you without any delay. You may write on the back of each check, ‘Not Used for 

Intended Purpose.’”748

On the same day, Mr. Birrell sent an email to Sofab Aerospace stating: “I am very sorry to 

report that after months of trying, our efforts to buy the six C-130 aircraft have concluded 

without a purchase agreement. I, therefore, must ask you to reconcile our account with SOFAB. 

... I deeply regret the termination of this particular project.”749 

$9.2 Million to Malta. On February 8, 2007, Mr. Birrell re-deposited the two cashiers 

checks, explaining to United Bank that the checks had not been used as intended.750 Mr. Birrell 

deposited the $9.2 million into the Grace Group Client Escrow Account. Written on the back of 

each cashiers check was: “Not Used for Intended Purpose.”751 According to United Bank, 

Birrell “said that the embassy gave him the wrong amount.”752 

On the same day, February 8, 2007, Mr. Birrell authorized a wire transfer of $9.2 million 

to an account in the name of “The Gabonese Republic (H. E. Omar Bongo Ondimba).”753 That 

account was not at a bank in Gabon, however, but at a bank in the country of Malta.

 The wire transfer had to be processed twice, because it was rejected the first time. The 

wire transfer authorization provided by Mr. Birrell had specified sending the $9.2 million from 

The Grace Group Client Escrow Account to “The Gabonese Republic (H. E. Omar Bongo 

Ondimba)” at “BDFI Bank SA” located at “FimBank” in Sliema, Malta.754 The purpose of the 

transfer was listed as the “return of escrow funds” and identified “Francios [sic] Meyer” as the 

contact. When United Bank entered the transaction into its wire transfer system, the receiving 

bank was listed as “BGFI Bank for further credit BDFI Bank” and used “Fim Bank” in the 

address line.755 

Wells Fargo, acting as an intermediary bank for this transaction, reported that the transfer 

was rejected, because Wells Fargo could not identify either BGFI Bank or BDFI Bank.756 In 

addition, Wells reported that “FIM Bank” had a “cross match to First Merchants Bank which is 

on OFAC block list.” Wells Fargo told the Subcommittee that it processed the $9.2 million wire 

transfer again on February 9, 2007, and that the transfer was successful that time, because after 

speaking with United Bank, it entered the beneficiary as “HE Omar Bongo Ondimba the 

 

748 2/3/07 email from Mr. Birrell to Mr. Meyer, Grace 0360. 

749 2/3/07 email from Mr. Birrell to Sofab, Grace 0227. 750 Subcommittee interview of United Bank officials, 5/5/07. 751 2/8/07 United Bank documents, Psi-ub-000289. 752 9/13/06 internal United Bank email, PSI United Bank 05-000030. 753 January 2007 United Bank statement, Psi-ub-000265. 754 2/8/07 United Bank International Wire Transfer Authorization, Grace 0357; 2/8/07 United Bank transaction 

records, Psi-ub-000289-90. 

755 Wells Fargo item No. 021562, no bates number. 756 Id. 
136 

Gabonese Republic,” identified the proper bank in Malta, and confirmed that FIM Bank was 

unrelated to the bank on the OFAC list.757

Also on February 8, 2005, The Grace Group sent an additional sum of $65,061 to the 

same Bongo account at the same bank in Malta.758 The purpose of the wire was also listed as 

“return of escrow funds” and identified Mr. Meyer as the contact. After the completion of these 

wire transfers, the funds remaining in The Grace Group Client Escrow Account totaled about 

$491,000.759 

Private Equity Alternative. Even after aircraft purchase was canceled and President 

Omar Bongo took possession of the $9.2 million once set aside for the C-130 aircraft, Mr. Birrell 

did not cease his efforts to make use of the export license that he had spent a year to obtain. For 

more than six months, from March to October 2007, Mr. Birrell continued to attempt to arrange 

the purchase of the aircraft, by enlisting a consortium of private firms to provide the financing 

and negotiating with them to design a transaction that would meet the export license 

requirements. 

On March 19, 2007, Mr. Birrell sent a three-page memorandum to Mr. Meyer, President 

Omar Bongo’s legal counsel, with a detailed proposal for the purchase of the six C-130 

aircraft.760 He wrote that he had met with four corporate representatives in South Africa 

“regarding the financing and use of the proposed Gabonese C-130 fleet.” He stated that, as a 

result, he had secured a “private equity placement for 85 percent or more of the funds” required 

to purchase the six aircraft and was seeking a second equity placement to cover the remaining 15 

percent. He wrote that one of the private firms, Norse Air, was interested in operating the 

aircraft and had tentatively agreed to base the airplanes in Gabon, with possible “exclusive use” 

of two of the aircraft by the Gabon Government. Mr. Birrell suggested an “equity split” between 

Norse Air and the Gabon Government regarding use of the aircraft for “commercial cargo use 

and United Nations leasing (and other uses outlined in the approved reexport license.).” He also 

seemed to suggest that Gabon lend the funds to the private firms to purchase the aircraft, to be 

repaid over five years, with the expectation that the fees generated by the aircraft would likely 

offset the purchase price in three years. 

In May 2007, after a round of meetings with U.S. Government officials, Mr. Birrell sent 

an email announcing that the U.S. Government had agreed the C-130 transaction under 

consideration could take place under the existing export license. On May 16, 2005, Mr. Birrell 

sent this email to Norse Air and several others: 

“After some considerable discussion with the concerned parties here in Washington, 

D.C., we have struck an agreement on the re-notification to the USG regarding the price 

change for the six C-130s. It has been agreed that because the material aspects of the 

 

757 Subcommittee interview of Wells Fargo Bank officials, 10/5/07 and 12/21/09. See also Wells Fargo spreadsheet 

on transactions from 2/1/07 to 6/1/07, no bates number; and 2/8/07 Wells Fargo wire transfer records, no bates 

number, which note that the wire was processed on February 9, 2007. 

758 See also 2/8/07 United Bank WireHouse Message Details, Psi-ub-000462-63; January 2007 United Bank 

statement, Psi-ub-000265. 

759 January 2007 United Bank statement, Psi-ub-000265. 760 3/19/07 memorandum from Mr. Birrell to Mr. Meyer, Grace 0560-62. 
137 

transaction remains unchanged (to wit: the actual aircraft, physical characteristics of the 

aircraft i.e. no offensive capabilities such as fixed gun mounts, etc, the end-user, scope of 

use, etc.) that a re-notification is not required by the Arms Control Export Act.”761 

Mr. Birrell described “the officials at the Department of State as EXTREMELY 

supportive and up-beat about the prospects of the 130 lift capacity in the region and believe that 

there will be many opportunities to utilize the A/C [aircraft] for governmental and NGO 

[nongovernmental organization] uses. It was also noted that the addition of the USMIL in the 

region could add value to the service center in LBV [Libreville, the capital of Gabon].” He 

wrote: “[We’re] all green-lighted here in WDC [Washington, D.C.]. As soon as the agreement 

has been signed with the GoG [Government of Gabon], I will be at the UN and State [to] propose 

a cargo lease, as per the terms of the re-export license.” 

 

In June 2007, the transaction seemed to be moving forward. In a June 3 letter to the 

RSAF Commander, Mr. Birrell wrote: “This letter follows our meeting in your office today. 

This letter reiterates, in writing, and delivered by hand, the firm offer to purchase the six C-130 

aircraft offered for sale by the Royal Saudi Air Force.”762 In a June 24 letter, Mr. Birrell stated: 

“It is my understanding that steps are now being taken for Norse Air to inspect the six C130 

aircraft. Pending the outcome of that inspection, I believe that it will be acceptable to purchase 

the aircraft in, ‘AS IS’ condition.”763 

Throughout July 2007, Mr. Birrell and his legal counsel negotiated with the private firms 

over a proposed memorandum of understanding (MOU) to govern financing and use of the 

aircraft. Mr. Birrell’s legal counsel raised multiple concerns about the structure of the 

transaction to ensure that it met the terms of the U.S. export license, criticizing in particular 

proposals to sell or lease the aircraft to a special purpose vehicle (SPV). In a July 10, 2007 

email, Mr. Birrell wrote: “Upon my representation today of the proposed agreement between the 

SPVs and the Gabonese government, there is some concern that the structure would be contrary 

to the terms agreed to by the U.S. Government. It is essential that the Gabonese Government 

maintain ownership of the aircraft and that the terms of the re-export license is respected w/o 

exception.”764 In a July 11, 2007 email Mr. Birrell wrote: “The issue of concern among the 

lawyers here is the ‘leasing’ of the aircraft by the GOG to the SPV. The lawyers believe that the 

SPVs and/or Norse, etc., need to be identified as ‘contractors’ to the GOG. As such there would 

be no question as to the ownership of the aircraft.”765 On July 20, he wrote: “According to 

counsel, the ‘leasing’ aspects of the agreement are not consistent with the re-export license.”766

 

761 5/16/07 email from Mr. Birrell to Norse Air and others, Grace 0434. 762 6/3/07 letter from Mr. Birrell to Lt. General Abdul Rahman Bin Fahad Al Faisal, Royal Saudi Air Force 

Commander, Grace 0433. 

763 6/24/07 letter from Mr. Birrell to Lt. General Abdul Rahman Bin Fahad Al Faisal, Royal Saudi Air Force 

Commander, Grace 0430-31. 

764 7/10/07 email from Mr. Birrell to Norse Air and others, Grace 0542. 765 7/11/07 email from Mr. Birrell to Norse Air, Grace 0541. 766 7/20/07 email from Mr. Birrell to Norse Air and others, Grace 0538. 
138 

The key SPV contemplated for the transaction was apparently Singpart Ltd., a shell 

corporation formed under the laws of Mauritius.767 An undated agreement entitled, “Heads of 

Agreement between the Government of the Gabonese Republic and Singpart Ltd,” which was 

reviewed by the Subcommittee, essentially proposed that Singpart lend $56 million to the 

Government of Gabon as a prepayment of the maintenance and services which the government 

would derive from Singpart’s operation of the aircraft. Gabon would then lend back $20 million 

to Singpart and use the remaining $36 million to purchase the aircraft. 768 After reviewing this 

proposal, Mr. Birrell’s legal counsel wrote: “[I]t’s not clear why it makes sense to have Singpart 

loan the $20 million to GovCo, which lends it back to Singpart – what is the purpose of that?”769 

On July 24, 2007, Mr. Birrell informed his legal counsel: “The RSAF has formally 

accepted the Gabonese bid on the six AC. We are going to need the new MOU awfully 

quick.”770 A 17-page draft contract, emailed on July 24, 2007, had been drawn up for Saudi 

Arabia to sell the six C-130 aircraft to Gabon for $36 million.771 This contract was in addition to 

the MOU that was still under negotiation with the consortium of private firms.772 

On August 13, 2007, Norse Air sent an email stating that it had a successful meeting with 

Cameroon Bank which “will be drawing up a loan agreement.”773 The email noted, however, 

that the purchase agreement required payment within 7 days of the signing of the contract, but 

that at least three weeks would be needed to provide the funds. On August 14, 2007, Mr. Birrell 

sent a letter to the RSAF stating: “Please be advised that the final legal review of the sale of the 

C-130 aircraft has been completed.”774 Arrangements were made for all parties to meet in 

Riyadh, Saudi Arabia, on October 20, 2007, to complete the purchase of the six C-130 aircraft.775 

Two days before the meeting was to take place, however, on October 18, 2007, 

Mr. Birrell sent a letter to the RSAF stating that President Omar Bongo had instructed his 

representative, Mr. Haidara, “to continue with other immediate matters of State” and that 

Mr. Haidara would not be able to attend the meeting. Although Mr. Birrell proposed an 

alternative date of November 10th, it appears that the meeting never took place, and the C-130 

transaction was never finalized. 

Three years later, as of January 11, 2010, the C-130 aircraft was listed in Saudi Air Force 

maintenance records as “for sale.”776 The State Department told the Subcommittee that, in June 

 

767 See 8/3/07 email from Norse Air to Mr. Birrell and others, Grace 0513-16 (describing Singpart as “a Mauritian 

shell used to contract for the MOU [Memorandum of Understanding]”). Singpart was apparently represented by 

Maxime Grandzion, an individual who earlier received a $250,000 “consulting fee” from The Grace Group. 768 Undated draft agreement, Grace 0466-86. 769 8/7/07 email from Mr. Birrell’s legal counsel to him, Grace 1140. 770 7/24/07 email from Mr. Birrell to his legal counsel, Grace 0535. 771 7/24/07 Draft Contract on the Sale of Six (6) C-130 Aircraft, Grace 0492-508. 772 See, e.g., emails exchanged on August 3 and 4, 2007 regarding the MOU, Grace 0513-16; 8/7/07 email, Grace 

0510; 8/7/07 email, Grace 1146; 8/7/07 email, Grace 0510; 8/7/07 and 8/8/07 emails, Grace 1139-41; 8/8/07 email, 

Grace 0445. 

773 8/13/07 email from Norse Air to Mr. Birrell, Grace 0437; Grace 0445. 774 8/14/07 letter from Mr. Birrell to RSAF, Grace 0436. 775 10/18/07 letter from Mr. Birrell to Lt. General Abdul Rahman Bin Fahad Al Faisal, Royal Saudi Air Force 

Commander, Grace 0683. 

776 Subcommittee interview of State Department officials, January 13, 2010. 
139 

2008, The Grace Group LLC submitted an application to re-register as a broker, but the 

application was incomplete and therefore not approved. The State Department indicated that, 

aside from the C-130 aircraft transaction, The Grace Group had not been involved in other 

activities requiring State Department approval.777

Compensation. Mr. Birrell began work on the C-130 transaction in or around June 

2005, and continued that work until at least October 2007, a period of nearly two and a half 

years. He expended considerable effort to complete the acquisition of the C-130 aircraft for 

Gabon, but was unsuccessful. The compensation paid to Mr. Birrell for his efforts is unclear. 

Among the documents produced by Mr. Birrell to the Subcommittee was a draft 

“Brokerage Agreement” dated September 21, 2006 – more than a year after he began work on 

the C-130 transaction – which requests that The Grace Group be paid $850,000 plus expenses for 

its work on the C-130 transaction. This draft agreement “confirms” Gabon’s “engagement of 

The Grace Group LLC ... to serve as its broker” in the purchase of six C-130 aircraft, and states 

that The Grace Group “will receive a fee of $850,000, plus normal and documented 

expenses.”778 The document reviewed by the Subcommittee, however, is unsigned, and 

Mr. Birrell declined to disclose whether The Grace Group actually received the $850,000. 

On April 18, 2006, Mr. Birrell withdrew $57,392.57 from The Grace Group Client 

Escrow Account and deposited it into The Grace Group LLC Account, with a notation “Feb & 

March interest ... per Mr. Birrell request.”779 It is unclear whether this transfer related to the 

firm’s work on the C-130 transaction. On January 30, 2007, Mr. Birrell sent President Omar 

Bongo’s representative, Mr. Meyer, a memorandum which stated that, as of that date, The Grace 

Group had incurred expenses in connection with the C-130 transaction totaling more than 

$253,000.780 It is unclear whether all of those expenses had been or were later reimbursed. 

On January 31, 2007, Mr. Birrell withdrew $125,000 from The Grace Group Client 

Escrow Account and deposited it into his personal joint account with his wife at United Bank.781 

The check contained the notation: “Grace Gp 2006 P. Sharing.” It is unclear whether this 

transfer represented compensation for his work on the C-130 transaction. 

(3) Conduit for Suspect Funds 

Throughout the course of the armed car and C-130 aircraft transactions, Mr. Birrell 

allowed his Grace Group accounts to act as a conduit for millions of dollars in suspect funds 

from Gabon. In March and April 2005, for example, The Grace Group accepted more than 

$850,000 wire transferred from President Omar Bongo’s account in Gabon, and later used funds 

from Gabon that had been wired into The Grace Group Client account to complete the armored 

car transaction. In addition, in June and July 2005, The Grace Group received wire transfers 

totaling $17 million from Gabon sent by Ayira to complete the C-130 aircraft transaction. 

 

777 Id., November 30, 2009. 778 9/21/06 unsigned Brokerage Agreement, Grace 1087-88. 779 4/18/06 United Bank transaction receipt, Grace 0083. 780 1/30/07 memorandum from Mr. Birrell to President Omar Bongo, Grace 0374-75. 781 1/31/07 United Bank check, Psi-ub-000237. 
140 

From 2005 until February 2007, Mr. Birrell disbursed most of the funds he had received. 

He spent nearly $1.2 million to purchase, armor, and ship six vehicles to Gabon, enabling 

President Omar Bongo to obtain U.S.-built vehicles to support his regime. With respect to the C130 aircraft transaction, the biggest disbursement made by Mr. Birrell was to send $9.2 million 

to an account in President Omar Bongo’s name in Malta. Mr. Birrell declined to explain why he 

did not return the $9.2 million to Ayira, and why the President of Gabon maintained an account 

in Malta or had substantial funds sent there. By sending the $9.2 million to Malta as directed, 

Mr. Birrell participated in a suspicious transaction. 

The next largest disbursement made by Mr. Birrell from the Grace Group accounts 

involved sending substantial funds to Mr. Haidara, President Omar Bongo’s adviser, at accounts 

in Mr. Haidara’s name at banks outside of Gabon.782 A January 2007 accounting by Mr. Birrell 

indicates that, in connection with the C-130 transaction, he had allocated $6.8 million of the 

Ayira funds to Mr. Haidara.783 The Subcommittee was able to document the transfer of about 

$4.2 million in payments as follows. 

 On July 22, 2005, the Grace Group Client Escrow Account wired $1 million to 

Mr. Haidara at KBC Bank in Brussels, with a notation that indicated the transfer was at 

the “request of the head of state.”784 The purpose of this transfer and whether or how it 

related to the C-130 transaction was not explained. 

 On August 31, 2005, the same Grace Group account wired $200,000 to “Baba A 

Haidara” at Societe Generale Agency Fontenoy in Paris; the stated purpose of the transfer 

was to “Feed starving refugees in Mali and Niger.”785 Why these funds were sent to 

Paris, why they were deposited in an account in the name of Mr. Haidara, and what 

happened to them next remain unclear. 

 On October 20, 2005, the same Grace Group account wired $3,061,809 to Mr. Haidara at 

KBC Bank in Brussels, with the notation that the transfer was at the “request of the head 

of the state-president.”786 The purpose of this $3 million transfer, whether and how it 

related to the C-130 aircraft transaction, and why the funds were sent to Brussels in an 

account in the name of Mr. Haidara were not explained. 

In each case, at the direction of President Omar Bongo or his adviser, Mr. Birrell transferred 

substantial funds to banks outside of Gabon, using funds that had been supplied by Ayira and 

depositing those funds into accounts in the name of Mr. Haidara, rather than President Omar 

Bongo or Gabon. Such transactions must be viewed as suspicious, since they enabled President 

Omar Bongo to divert substantial funds from Gabon, move the funds through the international 

 

782 The Subcommittee attempted to contact Mr. Haidara to discuss these transactions, but was unsuccessful in 

reaching him. Mr. Birrell declined to provide contact information for Mr. Haidara. 783 1/30/07 letter from Mr. Birrell to Mr. Meyer, Grace 0374-75. 784 7/22/05 United Bank WireHouse Message Details, Psi-ub-000428-29. See also 7/22/05 United Bank 

International Wire Transfer Authorization, Grace 0279. 785 8/31/06 United Bank WireHouse Message Details, Psi-ub-000430. 

786 10/20/05 United Bank WireHouse Message Details, Psi-ub-000438-39.
141 

wire transfer system to accounts not openly associated with him, and make it difficult to trace the 

movement of such funds from Gabon through the United States to their final destination. 

The final group of large disbursements made by Mr. Birrell from The Grace Group 

accounts went to “consultants” associated with the ultimately unsuccessful C-130 transaction. In 

January 2007, Mr. Birrell told Mr. Haidara that the “consultants” in the C-130 transaction were 

owed a total of $304,000,787 but bank records show these consultants actually received in excess 

of $1 million. 

 

 In 2005, The Grace Group entered into a contract with retired RSAF Brigadier General 

Hamid Bakhsh, Executive Manager of Bekhsh Aviation Consultant Services, promising 

him a fee equal to 8% of the purchase price of the C-130 aircraft.788 The Subcommittee 

was able to document payments to him totaling $289,000. When he was hired on or 

around September 23, 2005, the Grace Group Client Escrow Account wrote him a check 

for $5,000, with a notation: “advance commission c-130 project.”789 On December 16, 

2005, the same Grace Group account sent him a wire transfer for $184,000, with a 

notation, “consultant fee air craft purchase.”790 On February 19, 2006, the same Grace 

Group account issued him a check for $50,000.791 On December 16, 2006, the same 

Grace Group account wire transferred to him another $50,000 as a “Consultant Fee: 

Aircraft Purchase.”792 These documents indicate that over the course of over one year, 

General Bakhsh was paid fees in connection with the unsuccessful C-130 transaction 

totaling $289,000. The Subcommittee contacted Mr. Bakhsh who confirmed his contract 

with The Grace Group, confirmed that the payments were for his consulting work on the 

C-130 transaction, and claimed that The Grace Group owed him still more money for his 

efforts.793

 On November 16, 2005, the Grace Group Client Escrow Account wired $496,500 to 

Michael Moussa at Rothschild Bank in Monaco with a notation, “Business Consultant 

Agreement.”794 The Subcommittee attempted to contact Mr. Moussa to discuss his work 

on the C-130 transaction and this payment, but was unable to reach him. Mr. Birrell 

declined to provide contact information for Mr. Moussa. 

 On November 18, 2005, Grace Group Client Escrow Account wired $250,000 to Maxime 

Gandzion at KBC Bank in Belgium as a “consulting fee.”795 It is unclear what role he 

played in the C-130 transaction during 2005. Two years later, he represented the 

Mauritian shell company, Singpart Ltd. The Subcommittee also attempted to contact 

Mr. Gandzion to discuss his work on the C-130 transaction and this payment, but was 

 

787 1/30/07 letter from Mr. Birrell to Mr. Meyer, Grace 0374-75. 788 9/4/05 Agreement for Services, Grace 0280-81 and Grace 0575-76. 

789 9/23/05 check from the Grace Group LLC to Mr. Baksh, Grace 0056. 

790 12/16/05 United Bank WireHouse Message Details, Psi-ub-000449. 

791 2/19/06 check from the Grace Group LLC to Mr. Baksh, Grace 0080. 

792 12/16/06 United Bank International Wire Transfer Authorization, Grace 0283. 

793 Undated letter from Mr. Bakhsh to the Subcommittee, received on 10/23/09, no bates number. 

794 11/16/05 United Bank WireHouse Message Details, Psi-ub-000440 -41. 

795 11/18/05 United Bank WireHouse Message Details, Psi-ub-000442. 
142 

unable to reach him. Mr. Birrell declined to provide contact information for 

Mr. Gandzion.

Altogether, these consulting fees added up to $1,035,500, all of which were paid by The Grace 

Group using suspect funds from Gabon. 

 Mr. Birrell also used funds from Gabon for his own compensation. While the 

Subcommittee was unable to determine the total amount of compensation that President Omar 

Bongo provided to Mr. Birrell during the course of the armored car and C-130 aircraft 

transactions, an October 2006 check for $600,000 and a January 2007 check for $125,000, both 

deposited into Mr. Birrell’s personal joint account at United Bank, suggest that he too was a 

significant beneficiary of the suspect funds sent from Gabon. 

(4) Analysis 

President Omar Bongo employed the services of Mr. Birrell to obtain, not only U.S.-built 

armored cars and U.S. Government permission to purchase U.S.-built military transport aircraft 

to support his regime, but also use of Mr. Birrell’s U.S. bank accounts. President Omar Bongo 

sent Mr. Birrell nearly $850,000 from the President’s own account in Gabon; another $17 million 

was sent from “Ayira” in Gabon. President Omar Bongo and his advisers then instructed 

Mr. Birrell to spend over $1 million in the United States to obtain and ship the vehicles, and wire 

transfer additional, substantial amounts to a variety of foreign bank accounts. Mr. Birrell 

participated in several suspicious transactions, including sending $9.2 million to a President 

Omar Bongo account in the country of Malta, sending millions more to a Belgium bank account 

in the name of his senior advisor, and sending another $1 million to various “consultants.” This 

case history shows how a politically powerful PEP can take advantage of the U.S. financial 

system by using a U.S. lobbyist’s bank account as a conduit for his funds. If the United States is 

to keep foreign corruption outside of its borders, lobbyists representing foreign officials and 

governments will have to exercise greater due diligence before accepting foreign funds into their 

U.S. bank accounts and paying bills and expenses as directed by a foreign client. 

C. Bongo Use of a Daughter’s U.S. Bank Accounts To Move 

Suspect Funds Into the United States 

President Omar Bongo brought substantial amounts of suspect funds into the United 

States, not only through the bank accounts of a U.S. lobbyist, but also by using U.S. bank 

accounts and safe deposit boxes opened by one of his daughters, Yamilee Bongo-Astier. 

Yamilee Bongo-Astier is the daughter of President Omar Bongo and Marie-Yva Astier. 

She is a Canadian citizen who has lived at times in the United States. From 2000 to 2003, Ms. 

Bongo-Astier reportedly was a full-time student at New York University, and later at the Parsons 

School of Design. In 2000, she opened a checking account at HSBC Bank in New York City. 

Over the next three years, she made repeated large cash deposits into her account, totaling about 

$315,000, and on occasion used her accounts to purchase automobiles for her father or other 

Gabon officials. In 2003, she received a $183,500 wire transfer from the “Republic of Gabon 

Casier” which triggered an HSBC review of her account. When the bank conducted the review, 
143 

it learned for the first time, three years after the account opening, that Ms. Bongo-Astier was the 

daughter of President Omar Bongo and qualified as a PEP. After the bank reviewed her 

transactions, it closed her account due to “concerns about Omar Bongo.” 

Two months later, Ms. Bongo-Astier opened an account at Commerce Bank in New York 

City without disclosing her PEP status or relationship to President Omar Bongo. The vendor that 

provides PEP screening services for Commerce Bank failed to identify her as a PEP due to an 

incomplete list of President Omar Bongo’s family members and a policy of requiring publicly 

available information before adding a PEP to its PEP list. Commerce Bank maintained accounts 

for Mr. Bongo-Astier for four years, from 2003 to 2007. Over that time period, she made 

multiple large cash deposits into her account, totaling $1.6 million, and continued on occasion to 

purchase vehicles requested by her father. In 2005, after two large cash deposits triggered a 

review of her account, Commerce Bank learned that President Omar Bongo was the primary 

source of the funds in her accounts. The bank immediately designated her a PEP and began 

enhanced monitoring of her accounts. In 2007, Ms. Bongo-Astier asked the bank to count 

certain cash she had stored in safe deposit boxes at the bank. The bank found she had stored in 

her safe deposit boxes $100 bills wrapped in plastic totaling $1 million. Ms. Bongo-Astier 

explained that President Omar Bongo had provided the funds when he came to New York City 

and often brought cash into the country. President Omar Bongo did not declare his transport of 

the $1 million into the United States as required by law. The bank learned that Ms. BongoAstier expected additional funds from him to help her purchase a $2.2 million condominium in 

New York City. Commerce Bank deposited the $1 million into a new money market account, 

but a few weeks later decided to close her accounts. The bank also blocked her receipt of an 

additional $1 million wire transfer from Gabon. 

In 2007, Ms. Bongo-Astier moved her funds to JPMorgan Chase, without disclosing her 

relationship to President Omar Bongo or her PEP status. She deposited over $800,000 at the 

account opening, and over the next two years, withdrew the funds to pay for living expenses. 

She made no additional deposits. JPMorgan Chase told the Subcommittee that the bank was 

unaware of her PEP status until the Subcommittee disclosed her relationship with President 

Omar Bongo in 2009. 

Ms. Bongo-Astier spoke with Subcommittee staff in a brief telephone conversation, but 

declined through her legal counsel to participate in an interview to answer questions about her 

account activity at HSBC, Commerce Bank, and JPMorgan Chase. 

(1) HSBC Bank 

Yamilee Bongo-Astier began banking with HSBC Bank in New York City in 2000, and 

maintained an account there for about three years. She first opened a personal checking account 

in 2000, Account No. 031305202. HSBC was unable to locate any account opening 

documentation, but other bank documents indicate it was opened on September 28, 2000, with an 

initial deposit of $48,180.796 HSBC told the Subcommittee that it believed Ms. Bongo-Astier 

 

796 October 2000 HSBC Bank statement, HSBC-PSI 036987. At the time HSBC opened the account, the 2001 

Patriot Act, which required banks to establish AML programs, customer identification programs, and enhanced due 
144 

was then a student at New York University.797 Two years later, Ms. Bongo-Astier closed that 

account and, on September 12, 2002, opened a premier checking account, Account No. 

03132254, with a deposit of over $118,000.798 In connection with opening this account, HSBC 

obtained a copy of her passport which indicated she was a Canadian citizen. The 2002 account 

opening documentation also listed her occupation as “full time student” at the Parsons School of 

Design.799 

Ms. Bongo-Astier’s account opening documentation did not include any indication as to 

the source of her wealth. HSBC told the Subcommittee that its records did not show that anyone 

at the bank questioned why an unemployed university student had over $100,000 in her account. 

The bank told the Subcommittee that, because Ms. Bongo-Astier was a Canadian citizen, her 

middle name did not suggest to the bank a tie to either President Omar Bongo or Gabon.800 

HSBC said that it did not realize that Ms. Bongo-Astier was related to the Gabon family until 

2003.801 

Cash Deposits and Car Purchases. The bank account statements show that Ms. BongoAstier used her checking account primarily to pay for living expenses. They also show that, 

beginning in 2002, she began making large cash deposits into her account. These deposits 

included the following. 

- On January 23, 2002, Ms. Bongo-Astier made a cash deposit of $58,000.802

- On June 18, 2002, she made a cash deposit of $49,900.803

- On September 20, 2002, she made a cash deposit of $50,000.804

- On February 27, 2003, she made a cash deposit of $107,649.805

- On May 9, 2003, she made a cash deposit of $50,000.806

These five deposits show that, over an 18-month period, Ms. Bongo-Astier brought over 

$315,000 in cash into the bank. 

According to HSBC, its account monitoring system “detected a change in activity in the 

last year of the relationship, prompting the bank to file five Currency Transaction Reports on 

large cash deposits” into Ms. Bongo-Astier’s account.807 But HSBC told the Subcommittee that 

it did not know whether anyone from the bank actually spoke to Ms. Bongo-Astier concerning 

 diligence for accounts opened for senior foreign political figures, their relatives, and close associates was not yet 

enacted into law. 

797 Subcommittee interview of HSBC officials, August 11, 2008. 

798 September 2002 HSBC Bank statement, HSBC-PSI 037061. 799 9/12/02 HSBC account opening documentation, HSBC-PSI 037060. 800 Subcommittee interview of HSBC officials, August 11, 2008. 801 Id. 802 7/29/03 HSBC transaction report, HSBC-PSI 037413. 803 Id., at 037408. 804 Id., at 037409. 805 2/27/03 HSBC transaction report, HSBC-PSI 037412. 806 5/9/03 HSBC transaction report, HSBC-PSI 037414. 807 5/6/08 HSBC’s written responses to Subcommittee questions, PSI HSBC-36-0009. 
145 

these cash transactions or asked her about the source of the cash or what she did with the 

funds.808 

On May 7, 2003, a wire transfer for $183,500 from a “Republic of Gabon Casier” 

account at Citibank in Gabon was sent to Ms. Bongo-Astier’s account.809 HSBC told the 

Subcommittee that this large wire transfer from Gabon triggered a review of her account activity. 

According to HSBC, HSBC’s compliance department contacted the branch where the transfer 

occurred and quickly determined that Ms. Bongo-Astier was the daughter of the President of 

Gabon.810 HSBC told the Subcommittee that, prior to this review, it had been unaware of her 

relationship to President Omar Bongo. HSBC said that, in 2003, the bank re-classified Ms. 

Bongo-Astier as a “special category of client connected to a public official.”811

On May 9, 2003, Ms. Bongo-Astier purchased a cashiers check from the bank for 

$172,888 payable to a Lincoln Mercury car dealer.812 When asked about this check, HSBC told 

the Subcommittee that Ms. Bongo-Astier had indicated that she sometimes purchased cars for 

her father, step father, and delegates from Gabon.813 Additional evidence of this activity is a 

December 20, 2002 check for $66,085 from Manhattan Ford to Ms. Bongo-Astier, containing a 

notation that the funds represented a “refund of dep[osit].”814 

About two and a half months later, on July 31, 2003, HSBC sent a letter to Ms. BongoAstier informing her that her account would be closed “based upon our Know Your Customer 

Rule.”815 HSBC told the Subcommittee that it had closed the account “in light of concerns about 

Omar Bongo.”816

(2) Commerce Bank 

Two months after HSBC closed her account in July 2003, Ms. Bongo-Astier opened a 

new account at Commerce Bank in New York City without revealing her PEP status or 

relationship to President Omar Bongo.817 For over four years, from 2003 to 2007, she 

maintained three accounts and three safe deposit boxes at Commerce Bank. 

 

Ms. Bongo-Astier began her relationship with Commerce Bank on September 11, 2003, 

when she walked into the bank’s Manhattan South Branch with $53,000 in cash, two HSBC 

 

808 Subcommittee interview of HSBC officials, August 11, 2008. 

809 HSBC History/Trend Analysis Report from 06/2002 to 05/2003, HSBC-PSI 037444-46. 810 Subcommittee interview of HSBC officials, August 11, 2008. 811 Id. 812 5/9/03 HSBC cashiers check, HSBC-PSI 037473. 813 Subcommittee interview of HSBC officials, May 2, 2008. 814 12/20/02 check to Ms. Bongo-Astier, HSBC-PSI 037588. 815 7/31/03 letter from HSBC to Ms. Bongo-Astier, HSBC-PSI 037418. 816 Subcommittee interview of HSBC officials, August 11, 2008. 817 Commerce Bank is a federally chartered bank which, as of December 31, 2007, had about $50 billion in assets, 

475 branches, and 14,000 employees. 7/23/08 Commerce Bank’s written responses to Subcommittee questions, 

Commerce_Bank-03-0001. 
146 

cashiers checks for $40,000 from her closed account, and several smaller checks.818 Her total 

initial deposit exceeded $98,000. 

A Commerce employee opened the account, with the approval of the branch manager.819 

As part of the account opening process, Commerce obtained a copy of Ms. Bongo-Astier’s 

Canadian passport and U.S. visa.820 The account opening documentation showed that she said 

she was residing in New York City and attending graduate school at the Parsons School of 

Design.821 Commerce Bank filed a CTR regarding her $53,000 cash deposit, but apparently did 

not inquire into the source of the funds other than to learn they came from a closed account at 

HSBC. 

At the time of the account opening, Commerce Bank conducted a due diligence review 

which included conducting a “Prime” search, an OFAC screening, and a Lexis-Nexis search to 

identify information related to Ms. Bongo-Astier. 822 According to Commerce, “Prime 

Associates is a private vendor that provides financial institutions with various software programs 

to assist in discharging the institution’s responsibilities under the Bank Secrecy Act. Initially, 

the Bank obtained the software necessary to perform OFAC screening. Subsequently, in 2005, 

the Bank purchased software to identify so-called Politically Exposed Persons.”823 

According to Commerce Bank, at no time did Ms. Bongo identify herself as the daughter 

of President Omar Bongo, nor did her name come up in the Prime, OFAC, or Lexis-Nexis 

reviews as a PEP. Commerce Bank told the Subcommittee that very few of President Omar 

Bongo’s children are listed in PEP databases maintained by vendors like Prime Associates.824 

The bank said that it did not learn of her PEP status for two more years, until 2005. 

On September 11, 2003, Ms. Bongo-Astier opened a personal checking account at the 

bank, Account No. 7916245777.825 A year later, on November 24, 2004, she opened a joint 

account with another individual, Account No. 7918918561, with $1,000 in cash.826 Commerce 

Bank told the Subcommittee that it believed this individual was a friend of Ms. Bongo-Astier. 

 

818 Her initial deposit was $98,563.54, which included a cash deposit of $53,500; two cashiers check from HSBC 

made out to Yamilee Bongo Astier, one for $7,505.14 and one for $37,478.40; a check from Submarine 

Communications Corp. for $7505.14; and a check from Lionfish Design LLC for $80.00. Commerce 284. 

819 7/23/08 Commerce Bank’s written responses to Subcommittee questions, Commerce_Bank-03-0003. 820 On May 5, 2004, Ms. Bongo filed a W-8 form, Certificate of Foreign Status, Commerce 2. Commerce Bank copy 

of Ms. Bongo-Astier’s American Visa, Commerce 3; Commerce Bank copy of Ms. Bongo-Asteir’s Canadian 

passport, Commerce Bank 4. 

821 9/11/03 Commerce Bank account opening documentation, Commerce Bank 115. 822 Commerce_Bank-03-0002. The U.S. Office of Foreign Assets Control (OFAC) maintains lists of persons and 

entities with which U.S. financial institutions are prohibited from doing business. U.S. banks are required to check 

these lists prior to accepting any funds or wire transfers. 823 Commerce_Bank-03-0002. Prime Associates, now known as Fidelity National Information Services, Inc. or FIS, 

maintains a wide range of lists for screening the clients of its subscribers, including lists prepared by OFAC, the 

European Union, and other government bodies, a PEP database, FBI Ten Most Wanted List, lists of government 

officials of sanctioned countries, lists of persons suspected of involvement with financial fraud, and others. See 

“Prime Compliance Databank Overview,” at 2-3, attachment to 1/22/10 letter from FIS to the Subcommittee, no 

bates number. 

824 Subcommittee interview of Commerce Bank officials, June 18, 2008. 825 9/11/03 Commerce Bank account opening documentation, Commerce Bank 115. 826 12/2/04 Commerce Bank Customer Account Setup forms, Commerce Bank 112-13. 
147 

The branch manager approved the account opening, which subsequently showed minimal 

account activity.827 A year after that, on October 2, 2007, Ms. Bongo-Astier opened a money 

market account, Account No. 7924332914, at another Commerce Bank branch in Manhattan in 

which she deposited a substantial sum, as described below.828 This account opening was also 

approved by the branch manager.829

In addition, Ms. Bongo-Astier paid for three safe deposit boxes at the bank. On August 

21, 2007, she was given a key to Box 637.830 The next month, on September 26, 2007, she was 

given keys to Boxes 53 and 54.831 

Cash Deposits. From the opening of her Commerce Bank checking account in 2003 

until its closure in 2007, Ms. Bongo-Astier made multiple large cash deposits into the account. 

Over the four-year account relationship, her cash deposits totaled more than $1.6 million. The 

cash deposits involving more than $10,000 included the following. 

- On September 11, 2003, she made an initial cash deposit of $53,000. 

- On February 9, 2004, she made a cash deposit of $34,431.30. 

- On September 21, 2004, she made a cash deposit of $150,000. 

- On September 23, 2004, she made a cash deposit of $79,600. 

- On August 24, 2005, she made a cash deposit of $90,000. 

- On September 26, 2005, she made a cash deposit of $40,000. 

- On October 26, 2005, she made a cash deposit of $70,000. 

- On December 21, 2005, she made a cash deposit of $65,000. 

- On September 10, 2007, she made a cash deposit of $11,000. 

- On October 2, 2007, she made a cash deposit of $1 million. 

- On October 31, 2007, she made a cash deposit of $44,100.832

For the first two years her account was open, there is no evidence that any Commerce 

Bank personnel asked Ms. Bongo-Astier about the source of these funds or how an unemployed 

student was able to make such large cash deposits. 

On December 11, 2005, Commerce Bank’s account monitoring system flagged two cash 

deposits to Ms. Bongo-Astier’s checking account, in September for $40,000 and in October for 

$70,000. After receiving the system alert, on December 12, 2005, a Commerce Bank anti-money 

laundering (AML) investigator sent an email to the branch manager asking about Ms. BongoAstier’s account. The email noted that the account “appears to have been transacting large 

currency deposits recently,” commented that the “usual balance is not this high,” and asked about 

cashiers checks that had been written to a management company by Ms. Bongo-Astier.833 The 

 

827 Subcommittee interview of Commerce Bank officials, June 18, 2008. 828 10/2/07 Commerce Bank account opening documentation, Commerce Bank 114. 

829 Subcommittee interview of Commerce Bank officials, June 18, 2008. 830 8/21/07 Commerce Bank safe deposit box opening record, Commerce Bank 120-21. 831 9/26/07 Commerce Bank safe deposit box opening records, Commerce Bank 116-17. 832 Commerce Bank internal account record, Commerce Bank 0547. Commerce filed CTRs for each of these cash 

deposits. See 7/23/08 Commerce letter to the Subcommittee, Commerce_Bank-03-0002. 833 12/12/05 Commerce Bank internal email, Commerce Bank 47. On 10/26/05, Ms. Bongo-Astier wrote a cashiers 

check to Orb Management for $33,600, ultimately cashed on 11/07/05. On 11/2/05, she wrote a cashiers check to 
148 

email asked, “do you happen to know where the money is coming from.” The branch manager 

responded that “as much as we try, we can’t know everyone and every transaction,” but also 

asked the weekend supervisor to make inquiries into the account.834 

That same day, December 12, 2005, the branch manager sent an email to the AML 

investigator and weekend supervisor stating: 

“Yes, I know her[.] She is the Princess of 2 African Royalty. They are citizens of 

Canada. 

She is ok. The monies come when her parents ... visit the United Nations for Pres. 

Bush’s meetings. The monies are directly from the Federal Reserve.”835

The branch manager also forwarded a message from the weekend supervisor who said that he’d 

recently spoken with the branch’s head teller about Ms. Bongo-Astier, and was told “she is a 

princess or something from some African country, and the money she gets is from her father.”836 

The branch manager wrote: “Let me know if you need anything else.”837 The Commerce AML 

investigator responded: “No that is all I needed thank you so much.”838

The next day, December 13, 2005, the AML investigator referred the account to the 

bank’s Enhanced Due Diligence Oversight (EDDO) unit for additional research.839 That same 

day, the EDDO director telephoned Ms. Bongo-Astier to ask about her account.840 Commerce 

Bank told the Subcommittee that the EDDO director handled the telephone call, because he 

thought that Ms. Bongo-Astier was potentially a PEP. 

Commerce Bank told the Subcommittee that, during the course of the telephone call, Ms. 

Bongo-Astier readily disclosed that her funds came from her father, President Omar Bongo. 

According to the bank, she also stated that she often made purchases at the request of her father, 

such as a 2004 purchase of two Cadillacs.841

 Orin Management for $21,600. Commerce later determined that Orin and Orb were management companies for 

rental properties, and that Ms. Bongo was paying rent in advance for certain periods of time, such as six months. 

834 12/12/05 Commerce Bank internal email, Commerce Bank 49. 835 12/12/05 Commerce Bank internal email, Commerce Bank 48. Commerce personnel did not know the basis for 

the statement that “the monies are directly from the Federal Reserve,” since to their knowledge the monies were not 

from the Federal Reserve. They speculated that the reference could have been to the way that the cash was shrink 

wrapped, in the same manner as funds from the Federal Reserve. Subcommittee interview of Commerce Bank 

officials, June 18, 2008. 

836 12/12/05 Commerce Bank internal email, Commerce Bank 48. 837 Id. 838 Id. 

839 Subcommittee interview of Commerce Bank officials, June 18, 2008. Commerce Bank’s Anti Money 

Laundering (AML)/Bank Secrecy Act (BSA) Department was then divided into three units: (1) AML Investigations; 

(2) BSA; and (3) Enhanced Due Diligence Oversight (EDDO). According to Commerce, those units had “primary 

and overlapping responsibilities” to investigate suspicious transactions and possible money laundering. 

840 The EDDO director, a former FBI agent, had joined Commerce Bank in March 2005, as the head of the EDDO 

office. 

841 Subcommittee interview of Commerce Bank officials, June 18, 2008. See also 7/23/08 Commerce Bank’s 

written responses to Subcommittee questions, Commerce_Bank-03-0008. 
149 

After the EDDO division head spoke with Ms. Bongo-Astier, he sent an email to the 

branch manager stating that Ms. Bongo-Astier had been “very forthcoming.”842 He then wrote a 

memorandum memorializing the telephone call and sent an email, with the memorandum 

attached, to the Commerce Bank AML director and director of AML Investigations. He wrote: 

“This individual is the daughter of a PEP. The PEP is [the] President of Gabon. Her only 

source of income is from her father. Other than the large cash deposits that are explained 

in attachment everything else is OK.”843 

His memorandum described his conversation with Ms. Bongo-Astier and the issues 

surrounding her account: 

“This communication is being generated to address high volume dollar account activity, 

which is outside the scope for a customer who has no apparent occupation or source of 

income. During the time span of 8/24/05 to 12/11/05 a total of over $86,000 in large 

withdrawals occurred. During this same period cash deposits were made aggregating to 

$235,000.00. ... 

Bongo-Astier advised that she is the daughter of El Hadj Omar Bongo who is currently 

the elected president of Gabon. Bongo has been the president of Gabon since 12/2/1967 

and was recently re-elected on 11/27/2005. Gabon is a sub-sahara country on the western 

section of Africa. Bongo-Astier advised that she does not have a job and her only source 

of income is monies received from her father. The monies are received in the form of US 

currency and a CTR is immediately filed by her when the funds are deposited. The 

deposits coincide with the arrival of her father when he comes to the United States for 

official purposes. On other occasions cash is sent by her father through Gabon 

emissaries.”844

 A Subcommittee review of the bank documentation confirms that, on at least two 

occasions, Ms. Bongo-Astier appears to have used her account funds to purchase automobiles at 

her father’s request. As she indicated during her conversation with the EDDO director, on 

November 24, 2004, Ms. Bongo-Astiers purchased a cashiers check from the bank for $127,000 

and appears to have used it to pay for two Cadillac Escalades.845 She told the EDDO director 

that the vehicles were for the Gabonese mission, and that she had purchased them at the request 

of her father, President Omar Bongo.846 In addition, on June 17, 2004, Ms. Bongo-Astier 

deposited a $16,295 check into her checking account from a Lincoln Mercury car dealer.847 It 

was the same dealership to which she sent a cashiers check while banking with HSBC. 

 

842 12/13/05 internal Commerce Bank email, Commerce Bank 249. 843 Id., at 248. 844 12/13/05 Commerce Bank Memorandum of Enhanced Due Diligence, Commerce Bank 158-9. 845 Commerce Bank 366. Cashiers check drawn on the Bongo-Astier checking account and made payable to ATX 

Leasing Corp. with the notation: “(2) 2005 Cadillac Escalade ESV.” ATX Leasing Corp. is a company located on 

Long Island. 

846 Subcommittee interview of Commerce Bank officials, June 18, 2008. 847 2004 check from Lincoln Mercury, Commerce Bank 335. 
150 

PEP Designation. On December 13, 2005, the same day Commerce discovered Ms. 

Bongo-Astier’s relationship to President Omar Bongo, the bank officially designated her as a 

PEP.848 In addition, that same day, the EDDO director sent an email to the branch manager 

where her account was located stating that Commerce Bank policy required Ms. Bongo-Astier’s 

account to be transferred to the bank’s Private Banking Division: 

“The only thing is that it is Commerce policy that any PEP accounts are to be handled by 

Private Banking. Because she is a daughter of an elected political figure she is by 

definition a PEP.”849 

The branch manager suggested that her account be assigned to a private banker in Manhattan. 

The EDDO director replied: “That would be a help. Advise [the Commerce Private Banking 

head] that I will forward the interview memo to her for her records.”850 That afternoon, the 

branch manager sent an email to the Private Banking head, stating that “Yamilee is under 

Commerce policy a PEP account and needs to be handled by Private Banking.”851 

Despite Commerce Bank’s PEP policy, in December 2005, the bank decided against 

assigning Ms. Bongo-Astier’s account to a private banker. Commerce Bank told the 

Subcommittee that its Private Bank required a minimum of $500,000 in annual income and $1 

million in investable liquid assets, and Ms. Bongo-Astier did not meet either requirement.852 The 

bank decided instead to monitor Ms. Bongo-Astier as if she were a private banking client, but not 

officially to classify her as a private banking client since she did not meet the bank’s criteria. 

Commerce Bank told the Subcommittee that, beginning in December 2005, its computer and 

account monitoring systems clearly designated Ms. Bongo as a PEP so that all Commerce 

employees would know of her PEP status. 

Concerned that the bank had been unaware of Ms. Bongo-Astier’s PEP status for two 

years, the EDDO director instructed his staff to contact its AML vendor, Prime Associates, and 

find out why her name hadn’t been flagged as a PEP during the account opening process. On 

December 15, 2005, Commerce Bank wrote to Prime Associates, and noted that while President 

Omar Bongo was included in the vendor’s PEP list, Yamilee Bongo-Astier was not, and asked 

for the criterion by which a name would be placed on the PEP list.853 The email commented: “I 

would think that the daughter of the president of a country would be considered a PEP.”854 On 

December 20, 2005, Prime Associates responded that it was unable to find “any publicly 

accessible information that confirms” the information regarding Yamilee Bongo-Astier, and 

stated: “[O]ur data researches continue to work on expanding the PEP list. In a future 

distribution, if there is publicly accessible confirmation of this person, it will be added to the 

list.”855

 

 

848 7/23/08 Commerce Bank’s written responses to Subcommittee questions, Commerce_Bank-03-0004. 

849 12/13/05 internal Commerce Bank email, Commerce Bank 249. 850 Id. 851 12/13/05 internal Commerce Bank email, Commerce Bank 248. 852 7/23/08 Commerce Bank’s written responses to Subcommittee questions, Commerce_Bank-03-0005. 853 See 12/15/05 email from Commerce Bank to Prime Associates, Commerce Bank 51. 854 Id. 855 12/20/05 email from Prime Associates to Commerce Bank, Commerce Bank 50. 
151 

Prime Associates did not consider Ms. Bongo-Astier’s admission of her relationship to 

President Omar Bongo and her receipt of large sums of cash from him to be sufficient evidence 

to add her to its PEP list, without “publicly accessible information” confirming her admission. 

Commerce Bank told the Subcommittee that even today, Yamilee Bongo-Astier is not included 

in the Prime PEP list, which identifies only two of President Omar Bongo’s children, Ali Ben 

Bongo and Pascaline Bongo.856 The bank noted that the law was clear that the children of a 

senior foreign political figure are also to be treated as PEPs requiring enhanced due diligence.857 

Commerce told the Subcommittee that, partly in response to this information from Prime 

Associates, in December 2006, the bank ran a PEP filter search of all 50,000 customers, but did 

not identify any new PEP clients.858

The Subcommittee contacted Prime Associates, now known as Fidelity National 

Information Services, Inc. (FIS), which confirmed that, as of January 2010, it still had not added 

Yamilee Bongo to its PEP list due to its policy of not adding a name to its list unless it is able to 

verify from a public source that the person or entity is a PEP.859 In a subsequent letter to the 

Subcommittee, FIS expressed its interest in “assisting the United States government in its 

mission to prevent and detect illegal activity in our financial system ... with the most effective 

tools and data possible.” FIS recommended that “a joint government and vendor committee be 

formed to develop standards” for PEP lists, including “the level of documentation required to list 

someone as a PEP, when that information is known exclusively to [a financial institution] but not 

to the vendor.”860

 

856 Id. 857 Section 312 of the Patriot Act requires U.S. financial institutions to exercise enhanced due diligence when 

opening or monitoring private banking accounts for a “senior foreign political figure.” 31 CFR. § 103.175(r). 

Treasury regulations define the term “senior foreign political figure” as follows: 

“(r) Senior foreign political figure. 

(1) The term senior foreign political figure means: 

(i) A current or former: 

(A) Senior official in the executive, legislative, administrative, military, or judicial branches of a foreign 

government (whether elected or not); 

(B) Senior official of a major foreign political party; or 

(C) Senior executive of a foreign government-owned commercial enterprise; 

(ii) A corporation, business, or other entity that has been formed by, or for the benefit of, any such individual; 

(iii) An immediate family member of any such individual; and 

(iv) A person who is widely and publicly known (or is actually known by the relevant covered financial 

institution) to be a close associate of such individual. 

(2) For purposes of this definition: 

(i) Senior official or executive means an individual with substantial authority over policy, operations, or the use 

of government-owned resources; and 

(ii) Immediate family member means spouses, parents, siblings, children and a spouse’s parents and siblings.”

31 CFR §103.175. PEP lists are intended to help U.S. financial institutions comply with this regulatory definition 

and the Patriot Act requirement. 

858 Subcommittee interview of Commerce Bank officials, June 18, 2008. 

859 Subcommittee interview of Prime Associates officials, now FIS, January 8, 2010. In 2005, Prime Associates was 

purchased by Metavente Technologies Inc. which four years later, in 2009, was purchased by Fidelity National 

Information Services, Inc. (FIS). 

860 1/22/10 letter from FIS to the Subcommittee regarding “Filtering Data Committee Proposal,” no bates number. 
152 

Commerce Bank told the Subcommittee that, after first discovering Ms. Bongo-Astier’s 

PEP status in December 2005, the bank conducted its own research into Ms. Bongo-Astier, 

President Omar Bongo, and Gabon.861 Commerce Bank said that it was unable to find any 

indictment against President Omar Bongo, and took comfort from the fact that the White 

House’s website contained a photograph of President George Bush meeting with President Omar 

Bongo.862 Commerce Bank said that it also noted that the International Monetary Fund had 

provided funding to Gabon in recent years which it took as an encouraging sign of the country’s 

international standing. Commerce Bank told the Subcommittee that it had also filed CTRs on 

each of Ms. Bongo-Astier’s cash deposits, and had not heard any concerns from law 

enforcement. 

 

Monitoring the Bongo Accounts. After December 2005, Commerce Bank initiated 

enhanced monitoring of Ms. Bongo-Astier’s accounts due to her PEP status. Commerce Bank 

policy requires PEP accounts to be monitored on a day-to-day basis, reviewed every six months, 

and for a decision to be made every six months as to whether or not to keep the account open.863 

During 2006, the account was relatively quiet, with no cash transactions and little account 

activity other than a few large wire transfers and the payment of normal living expenses. 

Commerce Bank told the Subcommittee that it was unable to locate a written document 

summarizing its six month review of the Bongo-Astier accounts from January to June 2006, but 

that it was “confident that a six month review was in fact performed with respect to Ms. BongoAstier’s banking transactions and that such review did not reveal any transactions that were 

inconsistent with her historical activity.”864

The next six month review did not encompass the six month period from July to 

December, but instead covered the time period October 2006 to March 2007. A memorandum 

written by a Commerce Bank AML investigator, dated March 5, 2007, summarized the account 

activity during that period. It stated: 

“This customer [has] maintained a relationship with Commerce Bank since September, 

2003. She is the daughter to the Prime Minister of Gabon. She is the Princess of 2 [sic] 

African Royalty. She is a Citizen of Canada. She is listed as a PEP, Political Exposed 

Person, and a file can be found on her, located in EDDO. Funding is primary by Wire 

from Bongo Ondimba Astier Yamilee at the BGFI Bank, Boulevard De L’independence, 

Libreville, GA. Currency withdrawals (large amounts) are consistent to this account.”865 

The next review was completed on July 23, 2007, by a senior EDDO investigator. It 

reviewed the account for a four-month period, from April 7, 2007 to July 9, 2007. It stated the 

account “activity has remained consistent with past activity for this account relationship.”866

 

861 Subcommittee interview of Commerce Bank officials, June 18, 2008. 862 See photograph of President George W. Bush and President Omar Bongo in the Oval Office, Commerce 201. 863 Commerce told the Subcommittee that it had initiated the six-month PEP review policy earlier in 2005. 7/23/08 

Commerce Bank’s written responses to Subcommittee questions, Commerce_Bank-03-0005. 864 Id., at 04. 865 3/5/07 Commerce Bank memorandum AML Hot List Daily Wire Review, Commerce Bank 100. 866 7/23/07 Commerce Bank memorandum re Yamilee Bongo-Astier, Commerce Bank 156. 
153 

Commerce Bank noted that, throughout the time they were open, Ms. Bongo-Astier’s 

accounts received occasional wire transfers from individuals and entities outside the United 

States. Bank records show that her mother, Marie-Yva Astier, for example, sent her several wire 

transfers from accounts in Haiti and Canada, and Mr. Seydou Kane sent her funds from Monaco. 

She also received wire transfers from an account in her name at BGFI Bank in Libreville, Gabon. 

The largest wire transfer she received was from an entity called “Imagine” which also had a 

BGFI Bank account in Gabon. For example, on February 27, 2006, Imagine wire transferred 

$171,732.29 from Gabon to Ms. Bongo’s checking account at Commerce Bank.867 When asked 

about Imagine, Commerce Bank told the Subcommittee that the “review that was conducted at 

the time did not reveal any information that would have suggested that the activity involving 

Imagine was suspicious.”868

Commerce Bank provided the following information identifying large wire transfers into 

and out of Ms. Bongo-Astier’s accounts from 2003 to 2007.869

LARGE WIRE TRANSFERS TO AND FROM BONGO-ASTIER ACCOUNT AT COMMERCE BANK 

Date Credit Debit Summary 

01/23/04 $ 11,200.00 

Wire transfer from Marie-Yva Astier sender- Bank of America NYC instructingSogebank Port Au Prince, Haiti 

05/27/04 $ 9,975.00 

Wire Transfer from Monsieur Seydou Kane Credit Lyonnais NY – BERLMCMC 

Banque De Gestion Edmund Rothschild Monaco 

06/16/04 $ 9,988.00 

Wire transfer from Marie-Yva Astier sender- JPM Chase instructing- Royal Bank 

of Canada Toronto 

03/24/05 $ 9,975.00 Wire transfer from Monsieur Seydou Kane 

04/04/05 $ 10,000.00 

Wire transfer from Marie-Yva Astier sender- Bank of America NYC instructingSogebank Port Au Prince, Haiti 

02/27/06 $171,732.29 

Wire transfer from Imagine Libreville Gabon- sender DBTCI Americas NYinstructing Banque Belgolaise Paris 

03/01/06 $ 22,478.63 

Wire transfer from Bongo Ondimba Astier Yamilee sender- C A Lyonsoriginating Bank- Bred Banque Populaire Paris France 

02/01/07 $ 28,103.44 

Wire transfer from Bongo Ondimba Astier Yamilee- orig bank BGFI Bank 

Libreville Gabon- instructing Standard Charter Bank London England 

11/06/07 $15,000.00 

Wire transfer to receiver Bank of America Sogebank, Port Au Prince NA in the 

name of Marie-Yva Astier 

TOTAL CREDIT-$273,452.36 

TOTAL DEBIT- $15,000.00 SOURCE-COMMERCE BANK 

Safe Deposit Box Cash. In the fall of 2007, in August and September, as previously 

mentioned, Ms. Bongo opened three Commerce safe deposit boxes, numbered 53, 54 and 637, at 

the Manhattan South Branch. Typically, Commerce personnel escort a customer to a room 

where the safe deposit boxes are kept and provide the customer with privacy while the customer 

opens his or her safe deposit box. 

On October 2, 2007, Ms. Bongo-Astier traveled to the Commerce Manhattan South 

branch and informed Commerce personnel that she had cash in two of her safe deposit boxes, 

 

867 2/27/06 wire transfer record, Commerce Bank 89. 868 See 7/23/08 Commerce Bank letter to the Subcommittee, Commerce_Bank-03-0005. 

869 7/23/08 Commerce Bank’s written responses to Subcommittee questions, Commerce_Bank-03-0012. 
154 

Boxes 53 and 54, which she wanted to use to purchase a cashiers check.870 The branch manager 

and head teller counted the cash in both boxes and determined that it totaled $1 million. 

Contemporaneous handwritten notes prepared at the time by a Commerce AML investigator 

indicate that the money was “all $100 bills in sealed/bar coded bags like would come in from the 

fed.”871

A Commerce employee described the incident as follows: 

“Customer came in to purchase a[n] Official Check in the amount of $202,500 to 

purchase a condo. Customer explained that she had funds in her safe deposit box she 

needed to deposit for the check. We went to her safe deposit box where we took out 10 

sealed stacks of $100 bills each totaling $100,000.00 for a grand total of $1,000,000.00. 

According to Yamilee the money was given to her by her father, who she explained is the 

President of Gabon. The money was counted and verified .... The deposit was made and 

a CTR was filled out. Official check #41515816 was purchased for $202,500.00 made 

payable to ‘Martin Shaw, Esq. As Escrow Agent.’ The remaining $797,500 was 

transferred to a new Ultra MM account #7924332914.”872 

Commerce Bank had immediately opened a new money market account for Ms. BongoAstier, deposited the $1 million, arranged for the cashiers check, and suggested she speak with 

one of the bank’s private banking staff. The assistant branch manager sent an email to a private 

banker at Commerce Private Bank and alerted him to Ms. Bongo-Astier’s large cash deposit and 

disclosed that her father was the President of Gabon. The private banker responded, “What is 

Gabon?”873 The assistant branch manager replied: 

“Gabon is a country in Africa, right on the equator along the western coast. She just 

deposited $1 MM in cash and says she has approx $700M more she would like to set 

aside. She used some of the funds ($202M) to purchase a condo in the area. Existing 

relationship is a checking account (7916245777) that keeps anywhere from $1,000 to 

$30,000 in it.”874

The private banker replied, “Can you forward me emails with due diligence request? Given the 

nature of this transaction there should obviously be some searches.”875

The same day, October 2, 2007, the matter was forwarded to the EDDO director. He 

assigned it to an EDDO senior investigator and, in an October 2, 2007 email to his staff, stated: 

“Either PB [Private Banking] or us may have to contact her to determine source of funds 

and ultimate usage. We have to be certain that the funds are not being derived from 

 

870 See 10/2/07 Commerce Bank internal email, Commerce Bank 254 as well as 10/27/07 handwritten notes by AML 

coordinator for private banking, Commerce Bank 25. 871 10/27/07 handwritten notes by AML coordinator for private banking, Commerce Bank 25. 872 10/3/07 Commerce Bank internal email at 12:30 p.m., Commerce Bank 258; 7/23/08 Commerce Bank’s written 

responses to Subcommittee questions, Commerce_Bank-03-0007. 

873 10/2/07 Commerce Bank internal email, Commerce Bank 256. 874 Id., at 255. 875 Id. 
155 

proceeds of illegal or unethical actions. Run her through OneSource ... and use standard 

databases to determine current info. ... [W]e review this account every 6 months. The 

last review was done on 7/23/07. At that time there were no significant deposits, the 

balance was about $33,000 and the majority of the activity was derived from check 

debits. There were charges made in France that her father, Gabon President Omar Bongo 

was involved with buying property in France with embezzled funds.”876

In a subsequent email that day, the EDDO director stated that the bank needed to call Ms. 

Bongo-Astier directly to “determine the source of funds and how she obtained the physical 

cash.”877

Two days later, on October 4, 2007, the EDDO director telephoned Ms. Bongo-Astier 

and asked her about the source of the cash in her safe deposit boxes. According to the EDDO 

director, Ms. Bongo responded that her father, President Omar Bongo, often visited New York to 

attend diplomatic meetings. He said she then provided the following explanation: 

“She stated that upon his most recent visit to the United Nations (9/27/2007) to give a 

speech he gave her a gift of $1MM to be used for the purchase of a condo in New York 

City. The condo is located at 344 Bowery, New York, N.Y. Bongo-Astier added that she 

often receives gifts from her father and will be anticipating an additional $700M to add to 

the purchase of the condo. Yamilee stated that the total price of the condo was $2.025 

MM and the realtor handling the transaction was Sotheby realty. 

Bongo-Astier stated that it is her belief that her father brought the $1MM US currency in 

from Gabon and added that he most probably received the money at Citibank in Gabon. 

Bongo-Astier advised that because her father is a head of state he is not required to fill 

out any US paperwork when bringing in currency to the US over $10M. ... 

Commerce bank confirmed that President Omar Bongo did give a speech at the United 

Nations 62nd General Assembly on 9/27/2007. Research revealed that there is a 

preliminary investigation by French authorities into possible embezzlement of Gabon 

funds for the purchase of real estate in France. The probe specifically relates to Bongo’s 

homes in Paris and the French coast. As of this writing the probe is ongoing by Paris 

prosecutor’s offices. ... 

At this point absent of any definitive information to the contrary relating to the ownership 

of the condo, Commerce Bank will continue the account relationship with special PEP 

monitoring in place.”878 

The EDDO director did not express concerns about the source of the $1 million being deposited 

into Commerce Bank, despite his acknowledgement of ongoing criminal investigations in France 

“into possible embezzlement of Gabon funds.” He noted that those criminal investigations were 

examining whether embezzled funds were used to purchase real estate in France, without any 

 

876 10/2/07 email from EDDO director to his colleagues, Commerce Bank 254. 877 Id., at 253. 878 10/4/07 Commerce Bank memorandum from EDDO director re Yamilee Bongo Astier, Commerce Bank 260-61. 
156 

analysis of whether the same embezzled funds could be the source of the funds that Ms. BongoAstier intended to use to purchase real estate in the United States. 

Two weeks later, on October 17, 2007, the EDDO director wrote in an email that he had 

been in contact with law enforcement who informed him that President Omar Bongo did not file 

a Report of International Transportation of Currency or Monetary Instruments (CMIR) when he 

visited the United States in September, as required by law.879 Despite this development, in the 

same email, he stated that he continued to believe that the Commerce account should be kept 

open with ongoing monitoring.880 He noted that a colleague leaned towards closing the account, 

but: 

“My opinion is that although there are numerous accusations and allegations concerning 

Bongo and possible embezzlement of Gabon funds there have been no indictments or 

criminal charges levied against him. We have researched both Bongo and Bongo-Astier, 

ad nauseam [sic], and have not definitely found anything solid that would preclude our 

continuing relationship. This specific transaction is the sole transaction in BongoAstier’s account that would be considered inconsistent with this type.” 881

A Commerce Bank senior vice president responded: 

“I agree that we conducted all necessary research, completed appropriate due diligence 

and made the right conclusion in accepting Bongo-Astier as a customer. However, now 

whether we keep her as a customer depends [on] our determination on the source of the 

$1 million. I believe that she is purchasing a property. But considering the history on 

this family, we must absolutely make a determination of the source of funds. Her initial 

statement brings her father into the equation, which raises the red flags. If we can’t get a 

full understanding, we need to discuss closing the account. Stop by, if you want to 

discuss. Thanks for dealing with this sensitive matter.”882

On October 31, 2007, the EDDO director sent an email to the director of the New York 

High Intensity Financial Crime Area (HIFCA), U.S. Immigration and Customs Enforcement, 

regarding the Bongo-Astier accounts. He wrote: 

“As per our conversation we will keep this account in an active status and will assist 

whomever you assign this matter to ... and can answer any specific questions you may 

have. This customer is the daughter of the President of Gabon, Omar Bongo, who has 

had and still has several alleged money laundering issues relating to public funds from 

Gabon. This specific transaction, although may be legitimate, [Redacted by Commerce 

Bank].” 883 

 

879 10/17/07 Commerce Bank internal email, Commerce Bank 268. 880 Id. 881 Id. 882 Id. 883 10/31/07 Commerce Bank email to HIFCA, Commerce Bank 266. 
157 

Commerce Bank told the Subcommittee that it asked HIFCA whether it wanted Commerce to 

keep the account open, but never heard back. 

 In response to a Subcommittee request, the Financial Crimes Enforcement Network of 

the U.S. Treasury Department performed a search, but could not locate a CMIR filed by or on 

behalf of President Omar Bongo declaring the $1 million that his daughter said he provided to 

her in September 2007. 

Closing the Accounts. In November 2007, Commerce Bank decided to close Ms. 

Bongo-Astier’s accounts. The bank told the Subcommittee that the $1 million cash deposit 

combined with the possible French indictment of President Omar Bongo had made the bank 

reconsider the account. In addition, it had considered the reputational risk, the fact that the bank 

could lose money, and the need to file repetitive Suspicious Activity Reports. 

On November 14, 2007, the EDDO director wrote an internal memorandum on closing 

the account. He wrote: 

“Recent activities by customer, in addition to potential overseas criminal and civil actions 

against Omar Bongo, [have] caused Commerce Bank to initiate this closing request and 

terminate the existing banking relationship. 

Bongo-Astier advised that because her father is a Head of State, he is allowed to enter the 

US with as much US currency that he desires and is exempt from having to file any US 

documents (CMIR). (The writer contacted US Customs and was advised that everyone, 

regardless of position, must file a Currency or Monetary Instruments Report when 

entering the US with more than $10,000 in cash or monetary instruments). Bongo-Astier 

also stated that she is expecting another ‘gift’ from her father for approximately $750,000 

to pay for the remainder of the apartment. 

... [I]t has been learned that Omar Bongo is presently being investigated by the French 

government relating to multiple allegations that he has embezzled considerable funds 

from the Gabonese government and is purchasing real estate in France with the proceeds 

of the alleged criminal activities. President Omar Bongo has been investigated in the past 

relating to his relationship with Citibank and a US Congressional Sub-Committee has had 

testimony by Citibank officials that have advised that their KYC indicated that the 

primary source of wealth for Bongo is as Head of State for Gabon. Citibank officials 

were chastised by the subcommittee in not requiring a more exact determination in where 

the source of funds were derived from that were being deposited in Bongo’s Citibank 

account. It was further explained that it was not reasonable to believe that the hundreds 

of millions of dollars in Citibank [sic] for accounts maintained by Bongo were funded 

from a Presidential salary. 

Commerce Bank has known about above issue and has monitored referenced accounts 

closely. Due to the most recent transaction and statement made by the customer to 

Commerce officials it has become necessary to re-evaluate the banking relationship. With 

the most recent deposit in US currency and the knowledge that Bongo-Astier’s accounts 
158 

are solely funded by monies she receives from her father, Omar Bongo, as stated by 

Bongo-Astier, and the ongoing investigation of possible money laundering relating to 

purchases of international real estate, it is in the best interest of Commerce Bank to fully 

terminate the relationship with Bongo-Astier.”884 

On November 15, 2007, Commerce sent Ms. Bongo-Astier a letter informing her that her 

accounts were being closed.885 The decision to close the accounts had been made by the EDDO 

director and his supervisor, the AML director. The letter informed Ms. Bongo-Astier: “Based 

upon a review of the transaction history for the above referenced account(s), Commerce Bank 

has elected to discontinue this banking relationship.” Because Commerce Bank considered Ms. 

Bongo-Astier to be a PEP, the Private Banking division officially closed the accounts. 

On November 23, 2007, just before the accounts were officially closed, President Omar 

Bongo sent a wire transfer for nearly $1 million from his account at BGFI Bank in Gabon to Ms. 

Bongo-Astier’s checking account. Commerce Bank had already frozen the account, and reversed 

the wire transfer on November 27, 2007.886 On November 27, 2007, Commerce Bank closed 

Ms. Bongo-Astier’s accounts by providing her with two checks for $802,542.14 and $18,327.30. 

(3) JPMorgan Chase 

Three weeks later, on December 18, 2007, Ms. Bongo-Astier deposited both of the 

Commerce Bank cashiers checks into two new accounts she had opened at JPMorgan Chase 

Bank in New York City.887 As before, when she opened these accounts, she did not reveal her 

relationship with President Omar Bongo or PEP status. 

On December 17, 2007, Ms. Bongo-Astier opened a personal checking account, Account 

No. [xxxx]55, and a personal savings account, Account No. [xxxx]61.888 She deposited 

$18,327.30 into her checking account, and $802,542.14 into her savings account.889 As part of 

the account opening process, she provided a copy of her Canadian passport, but did not identify 

any occupation.890 JPMorgan told the Subcommittee that all of its accounts are run each night 

against a World Check PEP list, but Ms. Bongo-Astier’s name was never flagged.891 JPMorgan 

Chase told the Subcommittee that it was unaware of her PEP status until contacted as part of this 

investigation.892

Ms. Bongo Astier appeared to use the two accounts to pay for her living expenses. The 

bank statements reviewed by the Subcommittee indicate that from 2007 to November 2009, her 

 

884 11/14/07 EDDO director memorandum, Request to Close Account, Commerce Bank 262-64. 885 7/23/08 Commerce Bank’s written responses to Subcommittee questions, Commerce_Bank-03-0013. 886 7/23/08 Commerce Bank’s written responses to Subcommittee questions, Commerce_Bank-03-0015-16. 887 Commerce Bank copies of checks dated 11/27/07, Commerce Bank 278-79. 888 See 12/17/07 JPMorgan Chase account opening documentation, PSI-JPMorgan_Chase-06-0015; copy of 

passport, PSI-JPMorgan_Chase 06-0047. 

889 December 2007 JPMorgan Chase account statement, PSI-JPMorgan_Chase 04-0005-8; PSI-JPMorgan_Chase04-0045. 

890 JPMorgan Chase photocopy of Ms. Bongo-Astier’s Canadian passport, PSI-JPMorgan_Chase-04-0004. 

891 Subcommittee interview of JPMorgan officials, February 9, 2009. 

892 Subcommittee interview of JPMorgan officials, October 27, 2008. 
159 

savings account contained between $300,000 and $500,000 at a time. Funds were gradually 

transferred to her checking account to pay her bills and expenses. In July 2009, a wire transfer 

from Etude Maitre Anne Gey in Gabon provided an additional $341,000 to her savings 

account.893

(4) Analysis

For a nine-year period, from 2000 to 2009, Ms. Bongo-Astier opened accounts at three 

U.S. banks without revealing her relationship to President Omar Bongo or her PEP status. The 

banks that serviced the accounts were unaware of her PEP status for years, even though at least 

two banks checked her name against PEP lists provided by outside vendors. When one bank 

later told its vendor about Ms. Bongo-Astier’s PEP status, that vendor declined to add her name 

to its PEP list, asserting it needed public confirmation of the private information provided by the 

bank before doing so. That vendor still has not added her name to its PEP list three years later. 

For years, two of the banks allowed Ms. Bongo-Astier, with few questions asked and 

despite her self-portrayal as an unemployed student, to make repeated large cash deposits into 

her accounts, accept large wire transfers from foreign jurisdictions such as Gabon, Haiti, and 

Monaco, and purchase large cashiers checks. When two of the banks finally asked her about this 

account activity, she immediately disclosed her PEP status and the source of her funds, and it 

appears as if she would have been willing to have done so earlier if anyone had inquired. It is 

difficult to understand why no one did. 

One bank, HSBC, responded by closing her account; the other, Commerce Bank, despite 

internal misgivings about accepting funds from the President of Gabon, allowed her accounts to 

remain active for nearly two additional years with enhanced monitoring. In October 2007, Ms. 

Bongo-Astier disclosed to Commerce that she had been keeping $1 million in cash given to her 

by her father in the bank’s safe deposit boxes. Even after discovering this hidden cash, learning 

that her father had brought it into the United States without declaring it to government authorities 

as required by law, and acknowledging that the President was under investigation in France for 

possibly embezzling public funds and using those funds to purchase real estate, the bank’s 

Enhanced Due Diligence Oversight director insisted that the bank had “not definitely found 

anything solid that would preclude our continuing [the] relationship.” It is this reluctance to 

close accounts containing suspect funds that makes it so difficult to keep foreign corruption 

outside of the United States. 

D. Bongo Use of U.S. Trust Account 

Inge Collins Bongo is the wife of the current President of Gabon, Ali Ben Bongo, the 

eldest son of Omar Bongo. For ten years, from 1999 to 2009, her husband was the Minister of 

Defense in Gabon. On October 16, 2009, he was sworn in as the President of Gabon. As his 

wife, Ms. Collins Bongo qualifies as a PEP. 

 

893 See July 2009 Chase account statement for Ms. Bongo-Astier’s checking account, PSI-JPMorgan_Chase-09-0124 

(showing 7/10/09 wire transfer of $341,402.85 from Etude Maitre Anne Gey account at BGFI Bank in Gabon). 
160 

Born Inge Lynn Collins in the United States, Ms. Collins Bongo married her husband in 

1994. Over the next decade, they lived at times in several locations in California, including a 

luxury residence rented from a Hollywood celebrity for $25,000 per month.894 They also 

traveled extensively and lived at times in Gabon and France. In 2005, Ms. Collins Bongo 

became estranged from her husband and settled in California.895 President Ali Bongo has 

married a second wife, a Gabonese citizen, Sylvia Ajma Valentin Bongo. 

In December 1999, five years after her marriage to Ali Bongo, Ms. Collins Bongo used 

legal counsel to establish the Collins Revocable Trust, naming herself as the sole trustee.896 The 

Collins Trust does not use her married surname “Bongo.” By making the Trust “revocable,” Ms. 

Collins Bongo retained access to and control over the trust funds. The trust was established one 

month after the Subcommittee’s November 1999 hearing which examined a number of U.S. bank 

accounts used by President Omar Bongo and his relatives. 

Ms. Collins Bongo opened several accounts under the name of the Collins Trust at U.S. 

financial institutions, including Fidelity Investments897 and HSBC Bank. In December 1999, 

soon after the Trust was established, Ms. Collins Bongo opened a mutual fund account in the 

name of the Collins Trust at Fidelity Investments, a securities firm. Because, at the time, 

securities firms had no legal anti-money laundering obligations, Fidelity opened this account 

without exercising customer due diligence or evaluating the source of funds in the account, 

which was initially funded with nearly $3 million. Over the next two years, Ms. Collins Bongo 

treated this mutual fund account as if it were a checking account, using it to move nearly $2 

million to a network of accounts she maintained at other banks, including $625,000 to Collins 

Trust accounts at HSBC Bank. The Fidelity mutual fund account balance dropped over time 

and, after the first two years, showed minimal activity. Fidelity told the Subcommittee that for 

nine years, from 1999 to 2008, it had been unaware of Ms. Collins Bongo’s PEP status until 

contacted by the Subcommittee during this investigation. In April 2009, Fidelity designated Ms. 

 

894 See Inge Bongo v. Sean Combs, Case No. CV-01-00980 ( USDC CD California, July 2001). Mr. and Ms. Bongo 

were rumored to have purchased a residence in Malibu for $25 million, after Ms. Bongo was shown on a VH1 

television show, Really Rich Real Estate, touring homes. See 

http://www.mamboundou2005.com/2006/12/inge_bongo_et_s.html. From VHI.com: “The premiere episode 

introduces L.A.’s Westside Estate Agency, which is owned by Stephen Shapiro and Kurt Rappaport. Dealing with 

the wealthiest clients in the city, WEA’s combined business last year was close to $1 billion dollars, accounting for 

40% of the high-end sales in Southern California. With an average sale of $5,500,000, WEA is one of the most 

successful agencies in the nation. ... Inge Bongo, the heiress to a very rich country in Central Africa, is in town to 

purchase a home. WEA co-owner Kurt Rappaport shows her a $25,000,000 property in Malibu's exclusive Broad 

Beach area, but she feels the home ‘lacks grandeur.’ Co-owner Stephen Shapiro shows her a stately $25,000,000 

Beverly Hills mansion that turns out to be just what she’s looking for. Will Kurt and Stephen close the deal?” On 

January 13, 2009, Kurt Rappaport told the Subcommittee that Inge Bongo did not purchase the $25 million house, or 

any similarly priced residence, featured on the VH1 show.

895See ABC News, “Gabon's First Lady Lives on Food Stamps in California: Inge Bongo Went From Luxury to Poverty, Now 

Wants to be First Lady,” September 8, 2009.

896 See undated application by the “Collins Trust” for an Employer Identification Number, a copy of which was 

included in the HSBC account opening documentation, HSBC-PSI 037121 (“Date business started or acquired ... 

12-23-99”). See also 12/27/99 letter from legal counsel to Ms. Collins Bongo, HSBC-PSI 037120 (“we will 

complete your irrevocable trust”). 

897 See 4/3/09 letter from Mintz Levin, acting as legal counsel to Fidelity Investments, to the Subcommittee, PSIFidelity-02-001-04, at 02, which clarifies that Fidelity Investments is not a legal entity, but a trade name used to 

reference a group of companies associated with FMR LLC. 
161 

Collins Bongo a PEP client; it continues to maintain her Collins Trust mutual fund account 

which has had minimal funds and account activity for several years. 

In addition to the Fidelity mutual fund account, in April 2000, Ms. Collins Bongo opened 

checking and savings accounts in the name of the Collins Trust at Republic Bank California 

N.A., which merged with HSBC Bank in 2000. Neither Republic Bank nor HSBC was aware of 

her PEP status until two and a half years after the accounts were opened.898 During those two 

and a half years, the Collins Trust accounts received over $650,000 in wire transfers from 

accounts in Gabon, Luxembourg, and Belgium, as well as hundreds of thousands of dollars from 

the Collins Trust account at Fidelity and from two California escrow agents. In November 2002, 

Ms. Bongo made a $70,000 cash deposit into the Trust checking account, which triggered a 

review of the accounts and ultimately led to their closure four months later. HSBC told the 

Subcommittee that it was “not terribly proud of the relationship.”899 The accounts were closed on 

April 8, 2003. 

The two Collins Trust accounts examined in detail here were part of a larger network of 

U.S. accounts opened in the name of the Collins Trust or Inge Lynn Collins.900 The 

Subcommittee did not attempt to trace all of these accounts or their interconnections. The 

document reviewed by the Subcommittee, however, indicate that many of the accounts and 

transactions did not reference the name “Bongo,” raising the question of whether Ms. Collins 

Bongo was masking her connection to the Bongo family in Gabon when utilizing the U.S. 

financial system. The Collins Trust accounts appear to be part of that effort. 

Ms. Collins Bongo was contacted by the Subcommittee and had several brief 

communications with Subcommittee staff, but declined to participate in an interview to answer 

questions about her account activity at Fidelity Investments, HSBC Bank, or other U.S. financial 

institutions. 

(1) Fidelity Investments 

On December 9, 1999, Fidelity Investments opened a mutual fund account for the Collins 

Revocable Trust, Fund Account No. [xxx/xxxx]97.901 At that time, securities firms offering 

mutual fund accounts were under no legal obligation to obtain customer identification 

information, perform a customer due diligence review, or evaluate the source of funds provided 

 

898 Subcommittee interview of Fidelity officials, April 24, 2009. 

899 Subcommittee interview of HSBC officials, May 2, 2008. 

900 See, e.g., 2006 wire transfer of over $950,000 from a Collins Trust escrow account at Fidelity National Title 

Company (which is unaffiliated with Fidelity Investments, 12/28/09 Fidelity letter to Subcommittee, no bates 

number) to a Collins Trust escrow account at First American Trust Company. The Collins Trust also had an account 

at Washington Mutual as shown in the chart below. 

901 4/3/09 letter from Mintz Levin, legal counsel to Fidelity Investments, to the Subcommittee, PSI-Fidelity-02-001-

04, at 02. In addition, this letter clarified that Fidelity Investments is not a legal entity, but a trade name used to 

reference a group of companies associated with FMR LLC. The Collins Trust was also assigned Customer No. 

xxxxxxxx13. Fidelity later changed its account numbering system and assigned this account No. xxx-xxxx22. SIII 

00277. 
162 

to open an account.902 Some large securities firms had voluntarily implemented AML controls 

before they were required to do so; however, the Fidelity mutual funds did not.903

Fidelity was unable to locate the 1999 account opening documentation for the Collins 

Trust account, but in a letter, its legal counsel provided the following information: 

“At the time the accounts were opened Ms. Collins identified herself as a United States 

citizen and provided a United States address to Fidelity. The accounts opened were 

money market mutual funds, and thus, based on Fidelity’s policies and procedures in 

effect at that time, further due diligence was not required at that time.”904 

Two months earlier, on October 21, 1999, Ms. Collins Bongo had opened a similar 

mutual fund account at Fidelity in the name of “Inge Lynn Collins.” It was designated Account 

No. 055/0662172337.905 The account opening documentation indicated that she was a U.S. 

citizen, provided her address, date of birth, and social security number, and described her 

occupation as a “homemaker.”906 It made no mention of her husband or the Bongo family. 

Over the course of the next year, Ms. Collins Bongo gradually expended the funds in her 

individual mutual fund account. On January 14, 2002, Ms. Collins Bongo closed her individual 

mutual fund account and transferred the remaining funds to the Fidelity account opened in the 

name of the Collins Trust.907 

Although many investment accounts are fairly quiet, with annual statements that show a 

limited number of deposits and withdrawals, the first two years of annual statements for the 

Collins Trust mutual fund account include a long list of transactions, indicating that Ms. Collins 

Bongo used it more like a checking account than an investment account. She used checks 

imprinted with “Inge Collins, Trustee” and “Collins Revocable Trust” at the top, for example, 

 

902 Investment companies offering mutual fund accounts became legally obligated to establish anti-money 

laundering programs and identify their customers on June 9, 2003. See Treasury 31 CFR Part 103, Customer 

Identification Programs for Mutual Funds “...a regulation that, at a minimum, requires investment companies to 

implement procedures to verify the identity of any person seeking to open an account, to the extent reasonable and 

practicable; to maintain records of the information used to verify the person’s identity; and to determine whether the 

person appears on any lists of known or suspected terrorists or terrorist organizations provided to investment 

companies by any government agency. This final regulation applies to investment companies that are mutual funds.” 

http://www.fincen.gov/statutes_regs/frn/pdf/326mffinal.pdf. 

903 In a December 28, 2009, letter to the Subcommittee, Fidelity stated: “[S]ome entities in the Fidelity organization 

– such as Fidelity Brokerage Services LLC, Fidelity Management Trust Company, and Fidelity Personal Trust 

Company, FSB – had certain anti–money laundering practices in place in 1999. The Fidelity mutual funds 

themselves did not, however, and were not required to do so until July 2002.” 

904 4/3/09 letter from Mintz Levin, legal counsel to Fidelity Investments, to the Subcommittee, PSI-Fidelity-02-

0002. 

905 4/3/09 letter from Mintz Levin, legal counsel to Fidelity Investments, to the Subcommittee, PSI-Fidelity-02-

0001-04, at 02. Ms. Collins Bongo was also assigned Customer No. T158452119. 

906 Fidelity Mutual Fund New Account Application, SIII 00001. 

907 1/14/02 letter from “Inge Lynn Collins” to Fidelity closing her individual account and transferring the funds to 

the Collins Trust account, SIII 00267; 4/3/09 letter from Mintz Levin, legal counsel to Fidelity Investments, to the 

Subcommittee, PSI-Fidelity-02-0002. See also SIII 00543-548 for account statement activity. 
163 

and the Fidelity mutual fund account number at the bottom.908 From 2000 to 2002, Ms. Collins 

Bongo used these checks to disburse nearly $900,000 from the Collins Trust account at Fidelity 

to other financial institution accounts held in her name or the name of the Collins Trust.909 By 

using her Fidelity mutual fund account as if it were a checking account, Ms. Collins Bongo was 

able to disburse funds outside of the anti-money laundering controls in place at U.S. banks. 

The Collins Trust account was initially funded with two large deposits totaling nearly $3 

million.910 The first deposit, on December 29, 1999, was a check for about $406,000.911 

Documentation indicates those funds were proceeds from a house sale for $700,000.912 On 

December 30, 1999, in excess of $2.5 million was deposited into the account via a wire transfer 

sent by Mara Escrow Company, a California escrow company that handles real estate 

transactions.913 This $2.5 million transfer was the largest single transaction in the Collins Trust 

account at Fidelity and provided the majority of the funds in the account. 

Moving Funds. Over the next two years, documentation shows that the Collins Trust 

account at Fidelity repeatedly sent large sums, ranging from $10,000 to $100,000 at a time, to a 

network of other financial institution accounts opened in the name of Inge Lynn Collins or the 

Collins Trust.914 These transfers to other accounts, totaling nearly $2 million, were disbursed 

primarily from 2000 to 2002. In addition, the Collins Trust account issued numerous checks, 

often in rounded numbers ranging from $2,000 to $50,000, that appear to have been cashed. 

These transactions continued until late 2002. After that, the account showed increasingly less 

activity until 2005, after which only an occasional transaction took place. 

 

908 See, e.g., 4/14/00 checks from Ms. Collins Bongo, HSBC-PSI 037122-23; 3/29/04 check from Ms. Collins 

Bongo, SIII 00153. According to Fidelity, it is common for money market mutual fund account holders to be issued 

a checkbook for check writing activities. See 12/28/09 Fidelity letter to the Subcommittee, PSI-Fidelity-03-0001-5. 

909 See, e.g., 2000 Fidelity Account History, SIII 00011; 2001 Fidelity Account History, SIII 00014. 

910 1999 Fidelity Account History, SIII 00010. The Account History indicates that Ms. Collins Bongo also 

attempted twice to make a $70,000 deposit on December 10, 1999, but that deposit was twice “canceled” the same 

day. Id. Fidelity does not have any information as to why the deposit was canceled. 12/28/09 Fidelity letter to 

Subcommittee, PSI-Fidelity-03-0001-5. 

911 1999 Fidelity Account History, SIII 00010.

912 See 12/27/99 letter from Joseph E. Mudd, legal counsel, to Ms. Collins Bongo, HSBC-PSI 037120. See also 

12/27/99 cashier’s check to the Collins Trust, SIII 00541; 4/3/09 letter from Mintz Levin, legal counsel to Fidelity 

Investments, PSI-Fidelity-02-0003. 

913 December 1999 Fidelity Investments Account History, SIII 00010. See also 4/3/09 letter from Mintz Levin, legal 

counsel to Fidelity Investments, PSI-Fidelity-02-0003. The Subcommittee contacted Mara Escrow Company to 

obtain records related to this transfer, but Mara informed the Subcommittee that it had destroyed the records in 2009 

under its record retention policy. Subcommittee interview of Mara Escrow, January 12, 2010. 

914 The Fidelity account was also used to pay for certain living expenses. 
164 

Key transactions involving transfers from the Collins Trust account at Fidelity to other 

accounts include the following: 

SELECT TRANSFERS FROM COLLINS TRUST ACCOUNT 

AT FIDELITY INVESTMENTS 

Date Amount Originator Beneficiary Bank Ultimate Beneficiary Bates 

2/9/00 $75,000 Collins Trust Union Bank of California Check written to cash, cashed by 

Inge Collins 

SIII 00286-87 

2/22/00 $25,000 Collins Trust Union Bank of California Check written to cash, cashed by 

Inge Collins 

SIII 00312 

3/17/00 $20,000 Collins Trust Union Bank of California Check written to cash, cashed by 

Inge Collins 

SIII 00318 

4/14/00 $125,000 Collins Trust HSBC Two checks written to Collins 

Trust account 

SIII 00308-09 

5/19/00 $50,000 Collins Trust HSBC Check written to Inge Collins, 

deposited in Trust account 

SIII 00310-11, 

HSBC-PSI 032688 

6/9/00 $100,000 Collins Trust HSBC Check written to Inge Collins, 

deposited in Trust account 

SIII 00315-16, 

HSBC-PSI 032691 

7/3/00 $75,000 Collins Trust HSBC Check written to Republic Bank, 

deposited in Trust account 

SIII 00336-37, 

HSBC-PSI 032698 

11/9/00 $50,000 Collins Trust HSBC Check written to Inge Collins, 

deposited in Trust account 

SIII 00350-51, 

HSBC-PSI 032712 

1/8/01 $50,000 Collins Trust HSBC Check written to Inge Collins, 

deposited in Trust account 

SIII 00382-83, 

HSBC-PSI 032719 

1/24/01 $40,000 Collins Trust HSBC Check written to Inge Collins, 

deposited in Trust account 

SIII 00292-93, 

HSBC-PSI 032720 

2/9/01 $30,000 Collins Trust HSBC Check written to Inge Collins, 

deposited in Trust account 

SIII 00300-01, 

HSBC-PSI 032722 

3/2/01 $75,000 Collins Trust City National Bank Check written to Inge Bongo, 

deposited in Trust account 

SIII 00356-57, 

4/10/01 $50,000 Collins Trust City National Bank Check written to Inge Collins, 

deposited in Trust account 

SIII 00386-87, 

SIII 00143 

4/27/01 $50,000 Collins Trust Unknown Check written to Inge Bongo, 

deposited in Trust account 

SIII 00013, 

SII 00392-93 

6/29/01 $520,167 Collins Trust Unknown Wire transfer to 

Mara Escrow Company* 

*Funds were ultimately returned 

to the Collins Trust and this was 

not included in the final amount.

PSI-JPMorganChase07-0002, 

SIII 00014, 

PSI Fidelity-02-0003 

9/25/01 $51,000 Collins Trust Unknown Check written to Mara Escrow 

Company 

SIII 00419 

10/26/01 $273,000 Collins Trust Unknown Wire transfer to Mara Escrow 

Company 

SIII 00014, 

SIII 00249 

2/1/02 $20,000 Collins Trust Union Bank of California Check written to BH Mercedes 

Benz Ltd. 

SIII 00017, 

SIII 00433-34 

2/14/02 $15,000 Collins Trust Unknown Check written to Inge Bongo SIII 00437-38 

4/2/02 $20,000 Collins Trust HSBC Check written to Collins Trust SIII 00140 

5/30/02 $50,000 Collins Trust HSBC Check written to Collins Trust SIII 00141-42, 

HSBC-PSI-021153 

9/9/02 $12,000 Collins Trust HSBC Check written to Collins Trust PSI-HSBC-42-0004 
165 

9/13/02 $10,000 Collins Trust HSBC Check written to Collins Trust PSI-HSBC-42-0004 

3/24/04 $82,675 South Beverly 

Wilshire 

Jewelry and 

Loan 

Fidelity Check written to Inge Bongo 

Collins, deposited in Trust 

account 

SIII 00149, 

SIII 00068 

3/26/04 $50,000 Inge Collins 

Bongo 

Fidelity Cashiers check written to Collins 

Trust 

SIII 00150-51, 

SIII 00068 

3/29/04 $12,000 Collins Trust Washington Mutual Check written to Collins 

Revocable Trust 

SIII 00153 

4/30/04 $20,000 Collins Trust Washington Mutual Check written to Collins 

Revocable Trust 

SIII 00177, 

SIII 00073 

5/24/04 $14,995 Collins trust Washington Mutual Wire transfer to Inge Lynn 

Collins, deposited in Collins Trust 

account 

Collins Revocable 

Trust.xls (Deutsche 

Bank) 

11/30/05 $30,000 Collins Trust Fidelity Check written to “Fidelity Cash 

Reserves, deposited in Collins 

Trust account 

SIII 00152, 

SIII 00096 

TOTAL - $1,995,837.00 SOURCES – Multiple 

Prepared by Subcommittee 

Fidelity told the Subcommittee that, until contacted as part of this investigation in the fall 

of 2008, it had not been aware of Ms. Collins Bongo’s PEP status.915 It re-classified her as a 

PEP on April 15, 2009.916 Fidelity told the Subcommittee that, as result of the Subcommittee’s 

inquiry, it conducted an additional review of the Collins Trust account and found no significant 

account activity since 2007.917 From 2007 to April 2009, the account held only a de minimus 

amount.918 

(2) HSBC Bank 

On April 14, 2000, four months after opening the mutual fund account for the Collins 

Trust at Fidelity, Ms. Collins Bongo also opened Checking Account No. 6030051848 and 

Savings Account No. 2030005263 in the name of the Collins Trust at Republic Bank California, 

which merged with HSBC that same year.919 Almost a year later, on February 20, 2001, Ms. 

Collins Bongo opened a second checking account in the name of the Collins Trust, No. 178-

70827-5, and later transferred the funds from both of the earlier accounts into that new 

account.920 

 

915 Subcommittee interview of Fidelity officials, April 24, 2009. 

916 Id. 

917 Subcommittee interview of Fidelity officials, April 24, 2009; 4/3/09 letter from Mintz Levin, legal counsel to 

Fidelity Investments, to the Subcommittee, PSI-Fidelity-02-0002. 

918 4/3/09 letter from Mintz Levin, legal counsel to Fidelity Investments, to the Subcommittee, PSI-Fidelity-02-

0002. See letter from Fidelity to Subcommittee dated December 28, 2009. 

919 4/14/07 Republic Bank California account opening documentation, HSBC-PSI 037110. Lori Graf was the 

account officer when the account was opened. In November 2000, the account numbers changed as Republic 

Bank’s systems were merged into the HSBC systems. Checking Account No. 6030051848 became Account No. 

178-02673-5. November 2000 HSBC account statement, HSBC-PSI 032713. Savings Account No. 2030005263 

became Account No. 178-45266-1. November 2000 HSBC account statement, HSBC-PSI 032741. 

920 See April 2001 HSBC account statement, HSBC-PSI 032727 ($1,343.98 was transferred on 4/25/01 from the old 

checking account into the new Collins Trust checking account); July 2001 HSBC account statement, HSBC-PSI 

032749 ($4,522.65 was transferred on 7/5/01 from the savings account into the new Collins Trust checking 
166 

The April 2000 HSBC account opening documentation identified Ms. Collins Bongo as 

the sole trustee of the Collins Trust.921 A “Know Your Customer Form” stated that the source of 

funds for the account was a “trust fund.”922 It also indicated that Ms. Collins Bongo had no 

employer. She was listed as the sole signatory on both the checking and savings accounts, and 

would be the sole signatory on the second checking account that would be opened the following 

year. 

At the time of the account opening, Ms. Bongo provided the bank with a U.S. passport 

and a California driver’s license.923 Her passport listed her name as Inge Lynn Collins; it did not 

contain the name “Bongo.” Her driver’s license, in contrast, listed her name as “Inge Alia 

Bongo.” In addition, an HSBC document containing a copy of her driver’s license photograph 

included a handwritten inscription at the bottom: “Ali Bongo Circle” with an address, suggesting 

that the bank was aware at the time that she was married to Ali Bongo.924 According to the bank, 

it did not know at the time that Mr. Bongo was the Gabon Minister of Defense.925

The two initial HSBC checking and savings accounts were funded with $125,000 from 

the Collins Trust account at Fidelity Investments. On the day the accounts were opened, April 

14, 2000, Ms. Collins Bongo deposited two checks, imprinted at the top with “Collins Revocable 

Trust,” and drawn on the Fidelity Investments mutual fund account.926 One check was for 

$100,000 and was deposited into the checking account; the second check was for $25,000, and 

deposited into the savings account.927 

As part of the account opening documentation, Ms. Collins Bongo gave Republic Bank a 

letter from her legal counsel which noted that a check payable to Collins Trust for the amount of 

$406,099.87 was enclosed.928 The letter noted that Ms. Collins Bongo had recently sold a house 

for $700,000.929 

Wire Transfers. Over the course of the following two and a half years, the Collins Trust 

accounts received about $650,000 sent via large wire transfers from accounts in Gabon, 

 account); April 2001 HSBC account statement, HSBC-PSI 021100; July 2001 HSBC account statement, HSBC-PSI 

021110. This new checking account was apparently opened when Ms. Collins Bongo hired the Marie Ambrosino 

Management firm to handle her business affairs, including the Collins Trust accounts. In February 2001, all three 

Collins Trust accounts were re-designated as “The Collins Revocable Trust c/o Marie Ambrosino Mgmt.” About 

seven months later, Ms. Collins Bongo stopped using that management company. See 9/18/01 letter from “Inge 

Collins-Bongo” to Fidelity Investments (“Effective immediately, I no longer retain the firm of Marie Ambrosino 

Management to handle my business affairs.”) SIII 00273. See also 2/7/03 internal HSBC email, HSBC-PSI 037105. 

921 4/14/00 Republic Bank California Trustee Declaration, HSBC-PSI 037125. 

922 4/14/00 Republic Bank California account opening documentation, HSBC-PSI 037110. 

923 U.S. passport and California driver’s license of Ms. Collins Bongo, HSBC-PSI 037111-12. 

924 Id. 

925 Subcommittee interview of HSBC officials, December 22, 2009. The Patriot Act, which imposed the first 

statutory obligations for banks to establish AML programs, customer identification programs, and enhanced due 

diligence for accounts opened for senior foreign political figures, their relatives, and close associates would not be 

enacted into law until October 2001, a year after this account was opened. 

926 4/14/00 checks to the Collins Trust, HSBC-PSI 037122-23. 

927 April 2000 HSBC account statement, HSBC-PSI 032687; June 2000 HSBC account statement, HSBC-PSI 

032734. 

928 12/27/99 letter from Mr. Mudd to Ms. Bongo, HSBC-PSI 037120. 

929 Id. 
167 

Luxembourg, and Belgium. These wire transfer deposits typically arrived four to six weeks 

apart. The largest group of these wire transfer deposits, totaling about $350,000, was sent by an 

entity called “Sofinpar” from accounts in Luxembourg and Belgium. When asked about this 

entity, HSBC told the Subcommittee that “we believe that Sofinpar is a holding company located 

at Val ST. Andre 37, Luxembourg 1128. Georges Rocofford is listed as a partner.”930 When 

asked about the multiple transfers from that company to Ms. Collins Bongo, HSBC responded 

that the transfers should have received additional scrutiny.931 

Another large wire transfer deposit, in April 2002, for over $307,000, came from 

“Accrombessi Maixent” in Gabon. When asked about this transfer, HSBC told the 

Subcommittee that “Accrombessi Maixent is either an individual or a company engaged in 

management consulting located in Paris, France at 83 Rue Michel Ange.”932 It did not have any 

additional information. 

Two additional large deposits came from two California escrow agents. Over $367,000 

was wire transferred into the account in September 2001, by Signature Escrow, and over 

$264,000 was wire transferred into the account in May 2002, from Star Escrow. Finally, over 

the same two and a half year period, the HSBC Collins Trust account received over $500,000 

from the Collins Trust account at Fidelity Investments, later sending back about $70,000 to that 

Fidelity account. 

The HSBC bank statements show multiple withdrawals each month from the Collins 

Trust account, primarily via checks written in round numbers for amounts that were often for less 

than $10,000, but on occasion reached as high as $100,000. The largest single withdrawal from 

the account was a $251,000 wire transfer in October 2001, sent to the Mara Escrow Company. 

 The key transactions involving the HSBC Collins Trust account include the following. 

SELECT TRANSACTIONS INVOLVING COLLINS TRUST ACCOUNT AT HSBC 

Date Amount Originator Ordering Bank Ultimate Beneficiary Bates 

4/14/2000 $125,000 Fidelity Two checks written to Collins 

Trust accounts at HSBC 

HSBC-PSI 032687, 

734 

8/7/2001 $19,978 Sofinpar Wire transfer to Collins Trust 

account at HSBC 

HSBC-PSI 032610 

9/14/2001 $86,376.59 Signature Escrow Wire transfers to Collins 

Trust account at HSBC 

HSBC-PSI 032612, 

PSI-HSBC 42-0004-

05 

10/29/2001 $250,959.48 Collins Trust Wire transfer to Mara Escrow 

Company 

HSBC-PSI 032614 

11/2/2001 $29,975 Sofinpar KBC Bank 

Luxembourg 

Wire transfer to Collins Trust 

accounts at HSBC 

HSBC-PSI 032616 

1/2/2002 $14,978 Sofinpar KBC Bank 

Luxembourg HSBC Collins Trust HSBC-PSI 032620 

1/31/2002 $6,978 Sofinpar KBC Bank 

Luxembourg 

Wire transfer to Collins Trust 

account at HSBC 

HSBC-PSI 032620 

2/27/2002 $29,978 Sofinpar KBC Bank 

Luxembourg 

Wire transfer to Collins Trust 

account at HSBC 

HSBC-PSI 032622 

 

930 5/6/08 HSBC’s written response to Subcommittee questions, PSI-HSBC-36-0001-12. 

931 Subcommittee interview of HSBC officials, May 2, 2008. 

932 8/12/08 HSBC’s written response to Subcommittee questions, PSI HSBC 42-00004. 
168 

4/3/2002 $307,985 Accrombessi 

Maixent 

Banque Internationale, 

Gabon 

Wire transfer to Collins Trust 

account at HSBC 

HSBC-PSI 032626 

4/10/2002 $50,000 Collins Trust 

Check written to Inge 

Collins, deposited in Trust 

account at Fidelity 

SIII 00142 

4/15/2002 $50,000 Collins Trust Check illegible HSBC-PSI 032626, 

037939 

4/24/2002 $100,000 Collins Trust Check written to South 

Beverly Wilshire Loan 

HSBC-PSI 032626, 

037940 

5/10/2002 $264,137 Star Escrow Comerica Bank, South 

Gate, California 

Wire transfer to Collins Trust 

account at HSBC 

HSBC-PSI 032628 

6/4/2002 $50,000 Collins Trust Check written to Collins Rev. 

Trust

HSBC-PSI 021153, 

037941 

6/11/2002 $26,978 Sofinpar KBC Bank 

Luxembourg 

Wire transfer to Collins Trust 

account at HSBC 

HSBC-PSI 032630 

7/20/2002 $29,975 Sofinpar KBC Bank 

Luxembourg 

Wire transfer to Collins Trust 

account at HSBC 

HSBC-PSI 032632 

8/26/2002 $79,978 Sofinpar KBC Bank 

Luxembourg 

Wire transfer to Collins Trust 

account at HSBC 

HSBC-PSI 032634 

9/15/2002 $24,978 Sofinpar KBC Bank 

Luxembourg 

Wire transfer to Collins Trust 

account at HSBC 

HSBC-PSI 032637 

9/17/2002 $22,000 South Wilshire 

Jewelry and Loan 

Check written to Colllins 

Trust account at HSBC 

PSI-HSBC 42-0004 

10/16/2002 $29,976 Sofinpar KBC Bank 

Luxembourg 

Wire transfer to Collins Trust 

account at HSBC 

HSBC-PSI 032639 

1/22/2003 $19,976 Sofinpar KBC Bank 

Luxembourg 

Wire transfer to Collins Trust 

account at HSBC 

HSBC-PSI 032646 

2/10/2003 $19,976 Sofinpar KBC Bank 

Luxembourg 

Wire transfer to Collins Trust 

account at HSBC 

HSBC-PSI 032648 

2/21/2003 $14,976 Sofinpar KBC Bank Belgium Wire transfer to Collins Trust 

account at HSBC 

HSBC-PSI 032649 

TOTAL- $1,655,158 SOURCE- HSBC 

Prepared by Subcommittee 

$70,000 Cash Deposit. The evidence indicates that none of the large wire transfers from 

unusual jurisdictions and none of the $100,000 or $50,000 checks attracted the attention of 

HSBC anti-money laundering officials. On November 25, 2002, however, Ms. Collins Bongo 

made a cash deposit of $70,000 into the Collins Trust checking account. That cash deposit 

triggered a bank alert and a review of the account activity. 

An HSBC compliance officer contacted the HSBC Beverly Hills branch manager for 

information about the Collins Trust and Ms. Collins Bongo. On 12/17/02, nearly three weeks 

after the cash deposit, the branch manager responded: “This account was transferred from 

private banking dept. I don’t know anything about the client.”933 A few hours later the same day, 

the branch manager wrote: “I know nothing about the client. What should I do?”934 Two weeks 

after that, on January 31, 2003, the HSBC compliance officer wrote: 

“I’m not getting anywhere on this. She deposited 70,000 in cash on 11/25 and I have to 

explain the source of funds. The CTR indicates homemaker in the occupation field, the 

 

933 12/17/02 internal HSBC email, HSBC-PSI 037132. 

934 Id., at 037130. 
169 

KYC indicates trust fund as the source of funds and according to Linda and Vicki she is a 

princess from a foreign country. I need your help. She is Inge Collins Bongo.”935 

Later the same day, the compliance officer sent an email to a senior vice president in the 

HSBC Private Bank, and asked for information on the customer.936 A few days later, on 

February 3, 2003, the Beverly Hills branch manager sent an email to the compliance officer: “I 

don’t know what to tell you, this client was transferred to the branch recently. Who was the 

account officer? Did you asked [sic] the account officer.”937 

The next day, February 4, 2003, the HSBC compliance officer again asked the Private 

Bank senior vice president for assistance.938 He responded by sending an email to several HSBC 

employees, asking if any of them had the Collins Trust as a client and, if so, to respond to the 

compliance officer.939 One private banker replied that Ms. Collins Bongo “used to be a client” of 

two other private bankers but had not been a client “for several years.” She wrote that Ms. 

Collins Bongo was “a S. African princess – she travels extensively.”940 In response, the 

compliance officer sent an email to one of the private bankers who used to have Ms. Collins 

Bongo as a client and asked her: “[W]as this one of your clients? If so, please explain the source 

of cash and reason for the cash deposit. Also, please complete the $50,000 or more cash 

transaction report. The transaction occurred on November 25, 2002.” 941 

When no response was received, the investigation was elevated to a senior HSBC 

compliance officer who, on February 7, 2003, sent an email to the private banker asking: “What 

is known about this client, the trustee and the $70,000 cash deposit. It is critical that this gets 

answered ASAP. Call me.”942 That same day, on February 7, 2003, the private banker 

responded: 

“Inga Collins has been a client of Republic/HSBC for a few years now. She was 

originally with Lori Graf, when she was represented by a business manager that was a 

client of Lori’s. She subsequently changed business mangers to Marie Ambrosino, whom 

I have had a relationship with for a number of years. As a result, she became my client. 

She has since left Marie and to the best of my knowledge, is not represented by a 

business manager. She is married to an African Diplomat. She says that is why she has 

unusual cash activities/transactions. However, I don’t personally know her that well. 

Whatever procedure we need to follow to feel comfortable with this, or not – should that 

be our decision – is fine with me. Please advise.”943

 

935 1/31/03 internal HSBC email, HSBC-PSI 037134. 

936 Id., at 037133. 

937 2/3/03 internal HSBC email, HSBC-PSI 037131. 

938 2/4/03 internal HSBC email, HSBC-PSI 037129. 

939 Id. 

940 Id., at 037133. 

941 Id., at 037106. 

942 2/7/03 internal HSBC email, HSBC-PSI 037105. 

943 Id. See also 9/18/01 letter from Inge Collins Bongo to Fidelity Investments advising that she no longer retained 

the firm of Marie Ambrosino Management to handle her business affairs. SIII 00273. 
170 

While this AML review of the Collins Trust account was continuing, three more wire 

transfers from a Sofinpar account in Belgium, added about $55,000 to the Collins Trust account 

at HSBC, apparently with no questions asked.944 

On February 10, 2003, the senior compliance officer wrote to the director of the HSBC 

USA Financial Intelligence Group: 

“I have come across a name that might be related (strong possibility) to the Bongo’s in 

Gabon. Can you help out. We have an account The Collins Revocable Trust, and the 

Trustee is Inge Alia Bongo (CA drivers license – issued in 1999). Her passport has her 

a[s] Inge Lynn Collins (issued in 1991). ... I understand her husband is a diplomat 

(getting more from account officer) and she has received wires from Gabon. Can you 

check if she has married into the Gabon President’s family?”945

Within days, HSBC was able to confirm that Ms. Collins Bongo was married to Ali Bongo and 

related to President Omar Bongo’s family in Gabon. 

 

In mid-February 2003, three months after the $70,000 cash deposit, the HSBC 

compliance department recommended closing the account due to Ms. Collins Bongo’s 

connection to the Bongo family in Gabon.946 The account was not, however, immediately 

closed. On March 18, 2003, the senior compliance officer sent an email to the private banker 

noting that the Collins Trust account was still open, had an overdraft of $467, and must be closed 

“ASAP.”947 The next day, March 19, 2008, the senior compliance officer wrote to both the 

Beverly Hills branch manager and the private banker and requested that a restraint be placed on 

the account so that no additional checks would be honored.948 The restraint was imposed, Ms. 

Collins Bongo paid the overdraft, and a month later, HSBC closed the account on April 11, 

2003.949 

When asked why it took the bank nearly four months – from November to April – to 

close the account after the $70,000 cash deposit triggered a review of account activity, HSBC 

told the Subcommittee that once it discovered in February 2003, that the Collins Trust was 

associated with the Bongo family of Gabon, it acted quickly to close the Collins Trust 

accounts.950

 

944 See 2003 HSBC statements, HSBC-PSI 032646 ($19,976 deposit from Sofinpar on 1/22/03), HSBC-PSI 021187 

($19,976 deposit from Sofinpar on 2/10/03), HSBC-PSI 021188 ($14,976 deposit from Sofinpar on 2/21/03). 

945 2/10/03 internal HSBC email, HSBC-PSI 037137. 

946 8/12/08 HSBC’s written response to Subcommittee questions, PSI HSBC 42-0003, HSBC writes that “We 

believe the account was directed to be closed by compliance officials in accordance with HBUS procedure, and with 

the full support of the relevant business unit.” 

947 3/18/03 internal HSBC email, HSBC-PSI 037104. 

948 3/19/03 internal HSBC email, HSBC-PSI 037102. See also 8/12/08 HSBC’s written response to Subcommittee 

questions, PSI-HSBC 42-0003. According to HSBC, a restraint is used to freeze an account. 949 4/11/03 internal HSBC email, HSBC-PSI 037099. 

950 Subcommittee interview of HSBC officials, May 2, 2008. HSBC also noted that both the Collins Revocable 

Trust and the Yamilee Bongo accounts were opened prior to the passage of the Patriot Act. 
171 

On February 7, 2003, an HSBC compliance official sent an email to the senior 

compliance officer and wrote: 

“I would be grateful if you could arrange for searches to be made in your region in order 

to determine whether any member of the Group maintains any account or other 

relationship with” President Omar Bongo or “any other members of the Bongo 

family.”951 

The senior compliance officer responded the same day: “No match found in these names.”952 

Yet that very month, at the HSBC Manhattan South Branch in New York City, Yamilee BongoAstier made a cash deposit into her checking account of more than $107,000. HSBC told the 

Subcommittee that its search had failed to identify her account because she used Bongo as her 

middle, rather than her last name.953

(3) Analysis 

 For ten years, from 1999 to 2009, Ms. Collins Bongo maintained a Collins Trust account 

at Fidelity Investments. In addition, for three years, from 2000 to 2003, she had Collins Trust 

accounts at HSBC. Both financial institutions were unaware for years of her PEP status, her 

marriage to the Gabon Minister of Defense, and her association with the Bongo family of Gabon. 

Their lack of awareness was due in part to her use of Collins, rather than Bongo, to open the 

accounts and carry out the transactions. 

Early on, from 2000 to 2002, Ms. Collins Bongo used her Fidelity mutual fund account 

like a checking account to move nearly $2 million among a network of accounts at other U.S. 

financial institutions. During the same period, she used her HSBC account to receive large wire 

transfers totaling nearly $650,000 from offshore locations, with no questions asked. When each 

financial institution finally took notice of an unusual transaction and examined the account 

activity, each quickly discovered Ms. Collins Bongo’s PEP status. One bank, HSBC, reacted by 

closing her account; the other allowed the account to remain open in light of the minimal funds 

remaining and lack of recent activity. 

The Collins-Bongo accounts demonstrate that PEPs have used securities accounts as well 

as bank accounts to gain access to the U.S. financial system, and have used a U.S. trust to open 

U.S. accounts, transfer funds, and avoid the enhanced monitoring that might have been applied to 

an account bearing the name of a widely known PEP. 

E. Conclusion 

This case history exposes a variety of tactics used by President Omar Bongo to exploit 

weak AML and PEP controls at U.S. financial institutions. In one instance, he transferred over 

$18 million to the bank accounts of a U.S. lobbyist and then directed that lobbyist to wire 

transfer millions of dollars to accounts across the United States and around the world on his 

 

951 2/7/03 internal HSBC email, HSBC-PSI 037108-09. 

952 Id. 

953 2/2/10 letter from HSBC’s legal counsel to the Subcommittee, at 13. 
172 

behalf. In another, he brought undeclared cash into the United States, directed his daughter to 

deposit the cash in her U.S. bank accounts or safe deposit boxes, and used the cash not only to 

support her living expenses, but also on occasion to purchase vehicles and U.S. real estate. In 

the last instance, his daughter-in-law, wife of the current President of Gabon, made use of a U.S. 

trust and a U.S. securities account to receive and move more than $2 million through U.S. 

financial institutions. Like the Obiang case history before it, the tactics exposed in this case 

history demonstrate the importance of strengthening U.S. AML and PEP safeguards to keep 

foreign corruption outside of the United States. 

 
173 

 V. ABUBAKAR CASE STUDY: USING OFFSHORE COMPANIES 

 TO BRING SUSPECT FUNDS INTO THE UNITED STATES 

Jennifer Douglas Abubakar, a U.S. citizen, is the fourth wife of Atiku Abubakar, the 

former Vice President of Nigeria and a former candidate for the Presidency of Nigeria. This case 

history examines how, from 2000 to 2008, Ms. Douglas helped her husband bring over $40 

million in suspect funds into the United States, including at least $1.7 million in bribe payments 

from Siemens AG, a German corporation, and over $38 million from little known offshore 

corporations, primarily LetsGo Ltd. Inc., Guernsey Trust Company Nigeria Ltd., and Sima 

Holding Ltd. 

Over half of the suspect funds, nearly $25 million, were wire transferred by the offshore 

corporations into U.S. bank accounts opened by Ms. Douglas. For most of the time period 

examined, the U.S. banks with those accounts were unaware of Ms. Douglas’ PEP status, and 

allowed multiple large wire transfers into her accounts from the offshore corporations. As, over 

time, each of the banks began to question the wire transfers into her accounts, Ms. Douglas 

indicated that all of the funds came from her husband and professed little familiarity with the 

offshore corporations actually sending her money. 

Bank records indicate that Ms. Douglas used most of the funds placed into her accounts 

to support a lavish lifestyle in the United States, paying credit card bills and household expenses 

in the range of $10,000 to $90,000 per month, including substantial legal and accounting bills. 

She also transferred funds to accounts she opened for the Gede Foundation, a nonprofit 

corporation she established in 2002, and the American University of Nigeria (AUN), a university 

that Mr. Abubakar founded in 2003, and whose name reflects its association with American 

University in the United States. 

An additional $14 million of the suspect funds were wire transferred by two of the 

offshore corporations, LetsGo and the Guernsey Trust Company, to American University to pay 

for consulting fees related to AUN. American University officials told the Subcommittee that 

they understood the funds came from Mr. Abubakar and never inquired why the wire transfers 

were sent by unfamiliar offshore corporations. At least another $2.1 million was wire transferred 

by the Guernsey Trust Corporation to accounts controlled by Edward Weidenfeld, a U.S. lawyer 

who provided legal services to Ms. Douglas, Mr. Abubakar, and AUN. Mr. Weidenfeld 

explained that the funds paid for the Abubakars’ legal expenses and an account set up for AUN, 

and that he had assumed the funds came from Mr. Abubakar. 

Over the years, questions have been raised about the source of Mr. Abubakar’s wealth. 

He spent twenty years in the Nigerian Customs Service, and then worked in the private sector for 

ten years, before serving as Vice President of Nigeria from 1999 to 2007. While Vice President, 

Mr. Abubakar was the subject of corruption allegations relating to the Nigerian Petroleum 

Technology Development Fund. In December 2008, the U.S. Securities and Exchange 

Commission alleged in a formal complaint against Siemens AG, a German company, that, 

among other actions, in 2001 and 2002, Siemens wire transferred $2.8 million in bribe payments 

to a U.S. bank account belonging to Ms. Douglas as part of a scheme to bribe Nigerian officials. 

In response to this and other legal actions, Siemens admitted to engaging in widespread bribery 
174 

payments, pled guilty to criminal violations and settled civil violations of the U.S. Foreign 

Corrupt Practices Act, and agreed to pay over $1.6 billion in civil and criminal fines. 

Ms. Douglas has denied any wrongdoing, but the Subcommittee has obtained financial records 

showing the transfer of over $1.7 million from Siemens AG to Ms. Douglas’ account at Citibank. 

Mr. Abubakar has attributed his substantial wealth to fortunate investments. His wealth 

is attributable in part to a 16% ownership interest he held in Integrated Logistics Services Inc. 

(Intels), an oil services company formed in the 1980s, which has now become one of the largest 

Nigerian companies in the oil industry in Africa. When Mr. Abubakar took office in 1999, he 

placed his Intels shares in a blind trust. Instead of selecting an independent trustee from a 

financial firm, however, Mr. Abubakar appointed as trustee of the blind trust Orlean Invest 

Holding Ltd. (Orlean), a Panamanian corporation that is active in the oil industry in Africa, is 

closely associated with Intels, and is owned in part by Gabriele Volpi, Mr. Abubakar’s trusted 

friend and business partner. Orlean served as trustee of the Abubakar Blind Trust from 1999 to 

2003, when the trustees exchanged the Intels shares for shares in Orlean, thereby making the 

trust part owner of its own trustee. Orlean then resigned from the Abubakar Blind Trust and was 

replaced by Guernsey Trust Company Nigeria Ltd., a Nigerian shell company that was formed 

the day before the appointment. Mr. Volpi is one of three trustees of the Guernsey Trust 

Company whose sole activity is managing the Abubakar Blind Trust. 

From 2003 to 2008, the Guernsey Trust Company wire transferred over $10 million into 

the United States, including about $7 million into Douglas and AUN accounts; $2.1 million into 

the Weidenfeld law firm and AUN accounts; and $900,000 into American University accounts. 

Two other offshore corporations, LetsGo Ltd. and Sima Holdings Ltd., both of which are private 

corporations beneficially owned by Mr. Volpi and his family members, wire transferred nearly 

$27 million into the United States, including about $8 million into Ms. Douglas’ accounts; $5.5 

million into AUN accounts; and $13.1 million into American University accounts. Mr. Volpi 

told the Subcommittee that LetsGo and Sima Holdings sent millions of dollars to Ms. Douglas in 

connection with Mr. Abubakar’s ownership interest in Intels and a line of credit that LetsGo had 

extended to the Abubakar Blind Trust. 

A. Background 

Nigeria. Nigeria is located on the west coast of Africa, on the Gulf of Guinea. With 

more than 145 million citizens, it is the eighth most populous country in the world, and the most 

populous nation on the African continent.954 Nigeria has a diverse ethnic make-up, with three 

major ethnic groups, the Hausa, Ibo, and Yoruba, comprising nearly 40% of the population.955 

The official language of Nigeria is English, and the official currency is the naira. The 

predominant religions are Christianity and Islam, with Islam predominant in the north of the 

country, and Christianity predominant in the south.956 

 

954 United Nations, Department of Economic and Social Affairs, 2008 Population Report 

http://www.un.org/esa/population/publications/wpp2008/wpp2008_text_tables.pdf. 

955 Embassy of Nigeria, http://www.nigeriaembassyusa.org/thisisnigeria.shtml. 

956 The New York Times, “Deadly Nigeria Clashes Subside,” November 30, 2008; see online at 

http://www.nytimes.com/2008/12/01/world/africa/01nigeria.html?hp. 
175 

Nigeria gained its independence from the United Kingdom on October 1, 1960,957 and 

now operates as a federal republic of 36 states. Following years of military rule, Nigeria elected 

its first President in 1999, Olusegun Obasanjo, who was re-elected in 2003. Mr. Abubakar was 

his Vice President. In 2007, Umaru Yar’Adua won election as President over Mr. Abubakar and 

another candidate, marking the first peaceful civilian transfer of power in Nigeria. International 

observers nevertheless criticized the 2007 election, citing vote rigging and fraud. The European 

Union described the election as “not credible,” and the United States described it as “deeply 

troubling.”958 The President of Nigeria holds a maximum of two, four-year terms. The country 

also has a bicameral legislature and 36 state governors.959 

 Nigeria ranks among the top ten nations in the world in proven oil reserves,960 and is the 

second largest oil producer in Africa.961 It is one of the world’s largest exporters of oil, and its 

economy is highly reliant on oil revenues, which make up about 95% of generated revenues in 

the country.962 Its oil production facilities are concentrated in the Niger Delta region, which is an 

impoverished area despite its oil reserves. Militants have staged numerous attacks against the 

area’s oil production facilities, demanding that a greater share of oil proceeds be allocated to the 

region. A World Bank report notes that 80% of Nigeria’s oil wealth benefits only 1% of the 

population,963 and the United Nations currently ranks Nigeria as among the world’s worst 

performing countries in life expectancy and infant mortality rate.964 In addition, the 2008 U.S. 

State Department’s Human Rights Report characterizes Nigeria’s human rights record as “poor” 

and states that “government officials at all levels continued to commit serious abuses.”965 

Corruption. Nigeria has long had a problem with corruption. The U.S. State 

Department’s most recent Human Rights Report provides the following description of the 

corruption problem in Nigeria during 2008: 

 “Corruption was massive, widespread, and pervasive, at all levels of government and 

society. The constitution provides immunity from civil and criminal prosecution to the 

president, vice president, governors, and deputy governors while in office.” 

 “Police mistreated civilians regularly to extort money.” 

 “According to the Swiss-based Centre on Housing Rights and Evictions, authorities 

demolished more than 800,000 homes in the Abuja area since 2003. There was 

widespread opinion that the demolitions were primarily motivated by corruption and 

 

957 CIA World Factbook, https://www.cia.gov/library/publications/the-world-factbook/geos/ni.html. 

958 The Guardian, “Ruling Party Named Winner in Disputed Nigerian Election,” April 24, 2007; see online at 

http://www.guardian.co.uk/world/2007/apr/24/chrismcgreal.international. 

959 CIA World Factbook, http://www.nigeriaembassyusa.org/thisisnigeria.shtml. 

960 U.S. Department of Energy, Energy Information Administration, World Proved Reserves of Oil and Natural Gas, 

Most Recent Estimates, March 3, 2009; http://www.eia.doe.gov/emeu/international/reserves.html. 

961 Africa: The Good News, “Africa’s Major Oil Producers,” February 17, 2009, 

http://www.africagoodnews.com/energy/africas-major-oil-producers.html. 

962 Embassy of Nigeria, http://www.nigeriaembassyusa.org/thisisnigeria.shtml. 

963 Frontline (PBS), “Nigeria: The Hidden Cost of Corruption,” April 24, 2009; see online at 

http://www.pbs.org/frontlineworld/stories/bribe/2009/04/nigeria-the-hidden-cost-of-corruption.html. 

964 The United Nations World Population Prospects: The 2008 Revision. 

965 U.S. State Department, “2008 Human Rights Report: Nigeria” February 25, 2009; 

http://www.state.gov/g/drl/rls/hrrpt/2008/af/119018.htm. 
176 

discrimination based on socioeconomic class, since mostly lower and middle class 

persons lost their homes and property, which was sold to wealthy persons with 

connections to government officials once vacated.” 

 “The EFCC's anticorruption efforts waned, with little progress on prosecutions of federal, 

state, and local officials accused of corruption.”966

The latest Transparency International Corruption Perception Index ranks Nigeria 121 out of 180 

countries.967 

 

In 2002, then-President Olusegun Obasanjo created the Economic and Financial Crimes 

Commission (EFCC) to investigate and prosecute corruption.968 Nuhu Ribadu was appointed as 

the first EFCC chair and experienced significant success, including prosecutions of government 

officials and the recovery of over $5 billion in stolen assets.969 During one investigation of the 

Governor of the Niger Delta state, Mr. Ribadu was offered a $15 million dollar bribe, seized the 

money, and brought criminal charges against the Governor.970 Mr. Ribadu was removed from 

his post soon thereafter, and experienced two attempts on his life. In a recent interview, 

Mr. Ribadu estimated that more than $380 billion had been lost to corruption in Nigeria since its 

independence.971 

 Until recently, Nigeria was considered non cooperative in the battle against money 

laundering. In 2001, the Financial Action Task Force on Money Laundering (FATF) identified 

Nigeria as non-cooperative in the fight against money laundering.972 The next year, in 2002, the 

U.S. Department of Treasury issued an advisory informing U.S. banks of the “serious 

deficiencies in the counter-money laundering systems of the Federal Republic of Nigeria” and 

warning that “banks and other financial institutions operating in the United States should 

carefully consider, when dealing with transactions (especially those involving large sums of 

money, whether in cash or by wire transfer), originating in or routed to or through Nigeria, or 

involving entities organized or domiciled, or persons maintaining accounts, in Nigeria, how the 

lack of adequate counter-money laundering controls in Nigeria affects the possibility that those 

transactions are being used for illegal purposes.”973 In 2006, due to Nigeria’s enactment of AML 

laws, FATF removed Nigeria from its list of non-cooperative countries. In May 2007, Treasury 

withdrew its advisory to U.S. financial systems.974 

 

966 Id. 967 See Transparency International, 2008 Corruption Perception Index, 

http://www.transparency.org/policy_research/surveys_indices/cpi/2008. 

968 See Economic and Financial Crimes Commission (Nigeria) website, http://www.efccnigeria.org/. 969 Washington Post, “Corruption Cop: A Conversation with Nuhu Ribadu, Anti-Corruption Crusader,” May 24, 

2009; see online at http://www.washingtonpost.com/wp-dyn/content/article/2009/05/22/AR2009052202025.html. 

970 Id. 

971 BBC News, “Nigerian Leaders ‘Stole’ $380bn,” October 20, 2006, 

http://news.bbc.co.uk/2/hi/africa/6069230.stm.

972 April 2002, FinCEN Advisory, Transactions Involving the Federal Republic of Nigeria. 

973 Id. 

974 May 2007, FinCEN Advisory Withdrawal re Transactions Involving Nigeria. 
177 

Atiku Abubakar. For about twenty years, until 1989, Atiku Abubakar worked in the 

Nigerian Customs Service, rising to the rank of Deputy Director.975 For the next ten years, he 

worked in the private sector with interests in oil, media, agriculture, pharmaceuticals, and 

publishing.976 Mr. Abubakar has been quoted in the media as stating that he became wealthy 

“through wise investments, hard work and sheer luck of being at the right place at the right 

time.”977 

In the 1980s, Mr. Abubakar entered into a business venture with Gabriele Volpi through a 

company formed to provide oil and natural gas services at African ports.978 According to a 

biography of Mr. Abubakar, which was written with “his support and encouragement,”979

Mr. Abubakar and Mr. Volpi formed this oil logistics company in the early 1980s, as a Nigerian 

corporation called Nigeria Container Services Inc. (NICOTES).980 Mr. Volpi told the 

Subcommittee that he founded NICOTES in the early 1980s and invited Mr. Abubakar to 

become a director and shareholder in 1989.981 Some sources indicate that the company had a 

third founder as well, the late General Shehu Musa Yar’Adua, a political mentor to 

Mr. Abubakar and the elder brother of the current President of Nigeria, Umaru Musa 

Yar’Adua.982 

 

975 See, e.g., Atiku: The Story of Atiku Abubakar, by Adinoyi Ojo Onukaba (African Legacy Press, 2006), available 

from the Library of Congress, No. DT 515.844.058 (hereinafter, “Atiku Biography”), at 155, 161-62. See also BBC 

News, “Profile: Atiku Abubakar,” January 25, 2007, http://news.bbc.co.uk/2/hi/africa/6292141.stm. 976 See Atiku Biography; BBC News, “Profile: Atiku Abubakar,” January 25, 2007 

http://news.bbc.co.uk/2/hi/africa/6292141.stm. 

977 BBC News, “Nigeria VP to run for president" November 25, 2006, http://news.bbc.co.uk/2/hi/africa/6184156.stm 

(quoting an Abubakar autobiography that has yet to be published). See also Atiku Biography at 136; BBC News, 

“Huge win for Nigeria’s Yar’Adua,” April 23, 2007, http://news.bbc.co.uk/2/hi/africa/6584393.stm. 

978 According to the Atiku Biography, Mr. Abubakar formed this company while he was a Customs official. While a 

1991 Nigerian law bans public officers from engaging in private business activities (unless their public service 

employment is part time or the business relates to farming), that law was not in effect in the 1980s. See Code of 

Conduct Bureau and Tribunal Act, 2 Laws of the Federation of Nigeria (LexisNexis Butterworths) Cap. C15, § 

6(b)(current through Mar. 2006)(official source). 

979 Atiku Biography, at viii. The author of the biography, Adinoyi Ojo Onukaba, was Mr. Abubakar’s media 

adviser during his tenure as Vice President of Nigeria. In the book’s acknowledgement, Mr. Onukaba wrote: “I 

would like to thank Vice President Atiku Abubakar for entrusting me with the story of his life and for his support 

and encouragement.” He also thanked a number of Abubakar family members, friends, and associates for their 

assistance with the book. Id. 

980 Atiku Biography, at 136-37, 161, 187-88, 256-57, 302-303 (“Of all the businesses into which Atiku would 

venture, the most successful and the most lucrative would be a small oil servicing company he set up with an Italian 

business man in the early 1980s. ... NICOTES would transform Atiku from a struggling civil servant and 

businessman to a fabulously wealthy man.” Atiku Biography at 136-37). 

981 1/29/10 letter from Mr. Volpi’s legal counsel to the Subcommittee (hereinafter “1/29/10 Volpi letter”), at 4. 

According to Mr. Volpi’s legal counsel, the correct name of the company is Nicotes Container Terminal Service 

Ltd. 

982 See, e.g., Africa Energy Intelligence, December 21, 2005, “Nigeria: Intels Hit by Political Squabbles” (“Intels 

was paying the price of being too closely connected to vice president Atiku Abubakar, who had a hand in setting up 

the group in 1988 with general Shehu Yar’Adua”), and June 27, 2007, “The Yar’Adua Family’s Oil Holdings” 

(Shehu Yar’Adua ... took part in founding the oil logistics and port concern Intels”); Point Blank News, “President 

Yar’Adua, Wife, Linked with Oil Smuggling, Bunkering,” December 7, 2009, 

www.pointblanknews.com/os1057.html. According to the Atiku Biography, however, Shehu Yar’Adua was not a 

founder of the company, but was invited to become a 20% shareholder of NICOTES about a decade after the 

company was created. See Atiku Biography at 8, 156, 187-88, 195. 
178 

According to the Atiku Biography, in 1996, Sani Abacha, then President of Nigeria, 

seized control of the NICOTES shares belonging to Mr. Abubakar and Mr. Yar’Adua, and 

renamed the company Integrated Logistics Services Inc. (Intels).983 After Mr. Abacha’s death 

two years later in 1998, Mr. Volpi returned the shares to Mr. Abubakar.984 Mr. Volpi confirmed 

this description of the company’s development, stating through his legal counsel that 

Mr. Abubakar “was stripped of his financial interests in NICOTES” by General Abacha and that 

“Mr. Volpi made a moral agreement with Mr. Abubakar to restore Mr. Abubakar’s forfeited 

financial interest as soon as the political circumstances would permit.”985 According to 

Mr. Volpi’s legal counsel: “In 1999, Mr. Volpi and Mr. Abubakar agreed that Mr. Abubakar 

could reclaim a 16% holding of the issued share capital of Intel Services (Integrated Logistics 

Services) Limited, a Nigerian company and the successor NICOTES West Africa Services, Ltd. 

.... In 2003, Mr. Volpi and Mr. Abubakar agreed to reinstate Mr. Abubakar’s full financial 

interest.”986

Mr. Volpi is currently the managing director and chief executive officer of Intels. Gian 

Angelo Perruci of Italy and Daniel Sigaud of France are also reported to be senior managers of 

the company.987 Intels is now one of the largest Nigerian companies in the African oil industry, 

operating oil terminals and oil services zones at ports in several countries including Nigeria, 

Angola, Equatorial Guinea, Gabon, and Sao Tome and Principe.988 ExxonMobil told the 

Subcommittee, for example, that in less than three years, from 2006 to the fall of 2008, it paid 

more than $245 million to Intels West Africa Inc. and Intels Nigeria Inc., two Intels affiliates, for 

providing oil services in Nigeria.989 

 

983 Atiku Biography, at 256-57, 302-03. See also, e.g., Africa Energy Intelligence, December 21, 2005, “Nigeria: 

Intels Hit by Political Squabbles” (“When general Sani Abacha seized power in 1993 he allowed cronies to take 

control of Intels. The company was returned to its founders on Abacha’s death in 1998.”); Point Blank News, 

“President Yar’Adua, Wife, Linked with Oil Smuggling, Bunkering,” December 7, 2009, 

www.pointblanknews.com/os1057.html. According to Mr. Volpi’s legal counsel, the company was renamed Intel 

Services (Integrated Logistic Services) Ltd. 

984 The biography states that Mr. Volpi secretly agreed to return the seized shares to the true owners “as soon as the 

situation was right.” The biography quotes Mr. Abubakar as follows: “Volpi behaved honorably. ... For the two 

years that the Abacha and his men held the company and collected dividends worth millions of dollars, Volpi was 

still making secret payments to us.” Atiku Biography at 257. 

985 1/29/10 Volpi letter at 4. 

986 Id., at 4-5. 

987 See, e.g., Africa Energy Intelligence, “The Yar’Adua Family’s Oil Holdings, “June 27, 2007, and “Angola: An 

Old Hand Back in Business,” November 7, 2007, http://www.nigeriavillagesquare.com/articles/dr-gary-k.-

busch/linza-mi-da-wu-ta-ma-ganin-mahaukacin-3.html. 

988 See, e.g., July 5, 2006 Africa Energy Intelligence “Nigeria: Intels in Charge Again,” and “Nigeria: Intels,” 

October 1, 2008 (describing Intels as having a “near monopoly ... in the oil logistics and ports sector in Nigeria”). 

See also Intels website, http://www.intelservices.com. 

989 8/6/08 ExxonMobil written responses to Subcommittee questions, PSI-Exxon_Mobil-06-0001. Exxon told the 

Subcommittee that it made these payments through two Exxon subsidiaries: Mobil Producing Nigeria Unlimited 

(MPN) and Esso Exploration and Production Nigeria Limited (EEPN). Exxon-Mobil Attachment 5, (Nigeria) 

Payments to senior foreign political figures, their relatives, or entity owned or controlled by such persons, PSIExxon-0118-19. 
179 

After ten years in the private sector, in May 1999, Mr. Abubakar was elected Vice 

President of Nigeria under President Obasanjo. He held that position for eight years until May 

2007. By the time he took office, Nigerian law banned full-time public officials from engaging 

in private business activities other than farming.990 On July 22, 1999, Mr. Abubakar established 

a “Blind Trust” under Nigerian law.991 According to the trustees, the Blind Trust was formed to 

hold and manage his “assets, business[es], and investments.”992 The sole asset placed in the trust 

was Mr. Abubakar’s Intels shares, then representing “a 16% holding in the issued share capital of 

Intel Services (Integrated Logistic Services) Limited.”993 

Normally, blind trusts are managed by a trustee who is independent of both the grantor 

who places assets into the trust and the trust beneficiaries.994 After appointment of the trustee, 

 Exxon identified these payments to Intels-related companies from 2006 to 2008: 

Payee 2006 USD 2007 USD 2008 USD 

(through September) 

Intel West Africa Lts. $ 10,170,959.43 $ 9,460,437.42 $ 8,013,785.32 

Intels Nigeria Ltd. $ 98,768.72 $ 281,406.69 $ 813,084.78 

Intel West Africa Ltd. $ 37,429,643.95 $ 118,776,151.71 $ 29,862,791.83 

Intels Nigeria Lts. $ 406,472.15 $ 22,236,104.99 $ 7,898,653.11 

Total $ 48,105,844.25 $ 150,754,100.81 $ 46,588,315.04 

990 Nigerian law states that a public officer is not to “engage or participate in the management or running of any 

private business, profession or trade.” See Code of Conduct Bureau and Tribunal Act, 2 Laws of the Federation of 

Nigeria Cap. C15 § 6(b)(current through Mar. 2006)(official source). Business is defined as “any profession, 

vocation, trade or any adventure or concern in the nature of trade, and excludes farming.” In addition, the Nigerian 

Constitution states that public officers are “not to put themselves in a position where [their] personal interest[s] 

conflict with [their] duties and responsibilities.” The Constitution of the Federation of Nigeria, 5th Schedule § 1 

(enacted 1999). See also Law Library of Congress, “Nigeria: Restrictions on Business Activities of Public 

Officers,” No. 2010-003703, January 2010. 

991 See 7/22/99 “Deed of Trust (Blind Trust),” PSI-Volpi-03-00007-16. 

992 See 11/11/09 letter from Giwa-Osagie & Associates, legal counsel for Guernsey Trust Company, to the 

Subcommittee, EW000001-03, at 01. The letter stated in part: 

 “Our client is a Trust Corporation incorporated on the 9th of October 2003 and empowered pursuant to a 

Deed of Blind Trust dated 22nd July 1999 (‘the Blind Trust’) to hold as trustee and manage the assets, 

business and investments of Atiku Abubakar, a citizen of the federal Republic of Nigeria, and a former 

holder of the office of Vice-President of the Federal Republic of Nigeria. At the current time, the principal 

asset or investment held by our client as trustee for the said Atiku Abubakar is 16% of the shareholding 

equity in Orlean Invest Holdings Limited, (‘Orlean’) a company registered under the laws of Panama.” 

993 Abubakar Blind Trust at 6. See also 11/11/09 letter from Guernsey Trust Company’s legal counsel to the 

Subcommittee, EW000001-03, at 02; 1/29/10 Volpi letter at 2; 8/6/08 ExxonMobil written responses to 

Subcommittee questions, PSI-Exxon_Mobil-06-0001. The trust makes no reference to any other Abubakar business 

interests. 

994 According to the Congressional Research Service, a blind trust “is a device employed by a federal official to 

hold, administer and manage the private financial assets, investments and ownerships of the official, and his or her 

spouse and dependent children, as a method of conflict of interest avoidance. In establishing a qualified blind trust 

upon the approval of the appropriate supervisory ethics entity, the official transfers, without restriction, control and 

management of private assets to an independent trustee who may not communicate information about the identity of 

the holdings in the trust to the official. The trust is considered ‘blind’ because eventually, through the sale of 

transferred assets and the purchase of new ones, the public officer will be shielded from knowledge of the identity of 

the specific assets in the trust. Without such knowledge, conflict of interest issues would be avoided because no 

particular asset in the trust could act as an influence upon the official duties that the officer performs for the 

Government.” Congressional Research Service, “The Use of Blind Trust by Federal Officials,” September 23, 2005, 
180 

the trust grantor and beneficiaries are typically unable to monitor the trust assets – hence the 

name “blind trust.” In the case of the Abubakar Blind Trust, however, Mr. Abubakar did not 

appoint an independent trustee from a financial institution, but instead appointed corporations 

associated with Mr. Volpi, who has been described by Ms. Douglas and Mr. Abubakar’s legal 

adviser, Edward Weidenfeld, as Mr. Abubakar’s “trusted friend and business partner.”995 

The initial trustee of the Blind Trust, appointed in 1999, was a Panamanian corporation 

called Orlean Invest Holdings Ltd. (Orlean).996 Orlean is another oil services company with 

offices in London, Nigeria, and several other west African countries, and closely associated with 

Intels.997 Mr. Volpi has told the Subcommittee that he is the Chairman of Orlean, and that the 

Volpi Family Trust currently owns 63% of the company through Sima Holdings and a 

Liechtenstein trust called Adiana Stiftung.998 The Subcommittee was told that, from 1999 to 

2003, Orlean managed the Abubakar Blind Trust, including the Intels shares and “the profits 

generated thereby were utilised in developing new business initiatives and investments, 

particularly in Nigeria, Angola, Congo (Brazzaville) and the Ivory Coast.”999 

According to the Guernsey Trust Company’s legal counsel, in 2003, Orlean re-organized 

and “acquired Atiku Abubakar’s beneficial interests in Intels Services Limited, for Orlean’s 

benefit, and issued in consideration therefore, 16% of the shares in Orlean to the Blind Trust for 

the benefit of Atiku Abubakar.”1000 In other words, Mr. Abubakar exchanged his 16% 

ownership interest in Intels for an equivalent ownership interest in Orlean. His acquisition of the 

Orlean shares meant that he became a part owner of the trustee of his Blind Trust. Orlean also 

became a major shareholder of Intels.1001

 

 No. Cod RS21656, September 23, 2005. See also, Business Dictionary, 

http://www.businessdictionary.com/definition/blind-trust.html, (“Blind trusts are created to avoid any potential 

conflict of interest between the duties of a public officeholder and his or her choice of investment portfolio. The 

trust funds are placed at the full discretion of a trustee (such as a trust company) independent of the trustor in name 

and reality.”). 

995 11/13/09 written response from Mr. Weidenfeld’s legal counsel to Subcommittee questions, PSIAbubakar_&_Weidenfeld-01-0031; 11/13/09 written response from Ms. Douglas Abubakar’s legal counsel to 

Subcommittee queations, PSI-Abubakar_&_Weidenfeld-01-0020. 

996 11/11/09 letter from Guernsey Trust Company’s legal counsel to the Subcommittee, EW000001-03, at 01. 

Mr. Volpi told the Subcommittee that this company was incorporated in Panama in 1984 under the name Bivo 

Financial S.A., was renamed Orlean Invest Holding S.A. in 1985, was re-domiciled in 2004 in the British Virgin 

Islands, and was renamed again in 2004, as Orlean Invest Holdings Ltd.; 12/22/09 letter from Mr. Volpi’s legal 

counsel, Venable LLP, to the Subcommittee, PSI-Volpi-02-0001-6. 997 PSI-Volpi-02-0001-6.; www.orleaninvest.com (viewed 12-8-09); 2005 Business Week Special Advertising 

Section, “Africa’s Energy Boom,” at 1-2, 4 (“Another major operator in Nigeria is Orlean Invest Services Ltd. 

which through one of its subsidiaries, Intels (Integrated Logistics Services) plays a major role in an exciting project 

aimed at stimulating trade and export activities and attracting direct foreign investment. Intels is a worldwide leader 

in oilfield logistics with operational bases and service centers throughout the West African coast.”). 

998 PSI-Volpi-02-0001-6. 999 11/11/09 letter from Giwa-Osagie & Associates, legal counsel for Guernsey Trust Company, to the 

Subcommittee at 2. 

1000 Id. See also 8/6/08 ExxonMobil written responses to Subcommittee questions, PSI-Exxon_Mobil-06-0001, 

describing this exchange of shares. 

1001 Mr. Volpi told the Subcommittee that Orlean currently owns 70% of Intels Nigeria Ltd. but did not disclose 

Orlean’s ownership share in the parent company, Integrated Logistics Services Inc. PSI-Volpi-02-0001-6 at 3. 
181 

The Subcommittee was told that, after this exchange of shares, Orlean retired as the 

trustee of the Abubakar Blind Trust and, on October 10, 2003, was replaced by Guernsey Trust 

Company Nigeria Ltd. (Guernsey Trust Company), a shell company formed one day earlier 

under the laws of Nigeria.1002 Legal counsel to the Guernsey Trust Company told the 

Subcommittee that this company has three beneficial owners who provide the trustee services 

required by the Abubakar Blind Trust: Gabriele Volpi, Uyiekpen Giwa-Osagie, and Fati 

Akintola Kekere-Ekun.1003 Mr. Giwa-Osagie is the managing partner in the Nigerian law firm, 

Giwa-Osagie & Associates, which provides legal advice to the Guernsey Trust Company.1004 

Mr. Kekere-Ekun is the chief executive officer and managing director of Habib National Bank 

Ltd. in Nigeria, a trustee on the AUN board of trustees, and was chosen in part due to “his 

reliability and relationship with Mr. Abubakar.”1005 The sole trust that is managed by the 

company is the Abubakar Blind Trust. 

The Blind Trust states that it “shall operate for so long as the Beneficiary holds 

Government office in the Republic of Nigeria,” and that upon his leaving office, “the Trustee 

shall transfer the ownership of record and management of the investment interest ... to the 

Beneficiary or as the Beneficiary shall designate at that time.”1006 Despite this provision, the 

Blind Trust continued in existence after Mr. Abubakar left office in May 2007, continuing to 

send, for example, wire transfers to banks in the United States. 

The Subcommittee has been told that the Abubakar Blind Trust has had a single asset 

over time – shares of stock. The Subcommittee has also been told that, through dividends, those 

shares generated millions of dollars in cash revenues that were then used to send a steady stream 

of wire transfers to bank accounts in the United States. 

From 2003 to 2008, for example, the Guernsey Trust Company wire transferred at least 

$10 million into the United States, including at least $7 million to Douglas-related accounts at 

several U.S. banks, $2.1 million to the Weidenfeld law office and AUN accounts at Suntrust 

Bank, and $900,000 to American University accounts. Ms. Douglas, Mr. Weidenfeld, and 

American University each told the Subcommittee that they had no information about the 

Guernsey Trust Company, were unaware of its relation to the Abubakar Blind Trust, and did not 

deal with the Guernsey Trust Company trustees. Each indicated that they had simply assumed 

the funds sent by the Guernsey Trust Company belonged to Mr. Abubakar. 

 

1002 11/11/09 letter from Giwa-Osagie & Associates, legal counsel for Guernsey Trust Company, to the 

Subcommittee, EW000001-03, at 01. Mr. Volpi told the Subcommittee that the name of the company did not refer 

to the island of Guernsey but was “merely a name” with “no special significance.” 1/29/10 Volpi letter at 2. 1003 11/11/09 letter from Giwa-Osagie & Associates, legal counsel for Guernsey Trust Company, to the 

Subcommittee, EW000001-03, at 03. Mr. Volpi, however, described these three individuals as the directors of the 

corporation and the trustees of the Abubakar Blind Trust, and Mr. Abubakar as the sole beneficial owner of the 

Guernsey Trust Company. PSI-Volpi-02-0001-6 at 2 and 5. 

1004 See 11/11/09 letter from Giwa-Osagie & Associates, legal counsel for Guernsey Trust Company, to the 

Subcommittee, EW000001-03; PSI-Volpi-02-0001-6 at 5.. 

1005 1/29/10 Volpi letter at 5. See also PSI-Volpi-02-0001-6 at 5. 1006 Abubakar Blind Trust at 5. See also 11/11/09 letter from Giwa-Osagie & Associates, legal counsel for Guernsey 

Trust Company, to the Subcommittee, EW000001; 8/6/08 ExxonMobil written responses to Subcommittee 

questions, PSI-Exxon_Mobil-06-0001 (ExxonMobil states that the Abubakar Blind Trust was designed to end when 

Mr. Abubakar left office). 
182 

Two other companies beneficially owned by Mr. Volpi and his relatives as explained 

below, LetsGo and Sima Holding, sent nearly $27 million into the United States, including about 

$8 million to Ms. Douglas’ accounts, $5.5 million to AUN accounts, and $13.1 million to 

American University accounts. When asked about these wire transfers, Mr. Volpi told the 

Subcommittee through legal counsel that the funds sent to Ms. Douglas “related to a moral 

agreement by Mr. Volpi with Mr. Abubakar to acknowledge Mr. Abubakar’s financial interests” 

in Intels after General Abacha had seized Mr. Abubakar’s shares.1007 These payments, which are 

in addition to those generated by the shares held by the Abubakar Blind Trust, provided a 

separate revenue stream to Ms. Douglas outside of the trust that was supposed to separate 

Mr. Abubakar from his interests in the oil industry. Mr. Volpi’s legal counsel also told the 

Subcommittee that LetsGo had provided a line of credit to the Abubakar Blind Trust, and that 

some of the payments made by LetsGo to Ms. Douglas reflected that credit extension.1008 In 

addition, Mr. Volpi told the Subcommittee that he had made donations and extended a separate 

line of credit to AUN, and that some of the payments sent by LetsGo to AUN and American 

University accounts reflected those funding commitments.1009 

Mr. Abubakar served as Vice President of Nigeria from 1999 to 2007. In 2006, President 

Obasanjo attempted to amend the Nigerian Constitution to allow him to run for a third term. 

Mr. Abubakar opposed that effort, leading to a falling out between the two.1010 After President 

Obasanjo’s effort failed, an election for a new President was scheduled, and Mr. Abubakar 

announced his candidacy. In response, the Nigerian Independent National Electoral Commission 

ruled that he was disqualified from running for President, because he was under investigation for 

corruption.1011 A few months later, on March 12, 2007, the Federal High Court of Nigeria ruled 

that the Commission had no authority to disqualify candidates.1012 Mr. Abubakar’s name was 

added to the ballot at the last minute. The official results showed that he took third place behind 

two other candidates, with about seven percent of the vote. 

During the presidential campaign, the Nigerian Economic Financial Crimes Commission 

(EFCC), under the leadership of Nuhu Ribadu, initiated a corruption investigation of several 

Nigerian government officials, including Mr. Abubakar.1013 The EFCC issued a report which 

found that Mr. Abubakar had used his influence over Nigeria’s Petroleum Technology 

Development Fund (PTDF) to disburse money from the Fund to promote business ventures for 

 

1007 1/29/10 Volpi letter at 4. 1008 Id., at 4-5. This explanation suggests that Mr. Volpi directed LetsGo to send the borrowed funds directly to Ms. 

Douglas instead of providing them to the actual borrower, the Abubakar Blind Trust, and allowing the trustees to 

direct use of the Trust’s funds. 

1009 Id., at 5-6. 1010 See, e.g., Africa Energy Intelligence, “Nigeria: Campaign and Corruption,” September 20, 2006 (“incumbent 

president Olusegun Obasanjo and his vice-president Atiku Abubakar have accused one another of stealing public 

funds”). 

1011 See Action Congress v. Independent National Electoral Commission, Suit No: FHC/ABJ/CS/3/2007 (Federal 

High Court of Nigeria, Abuja Judicial Division), Judgment issued on March 12, 2007. 

1012 Id. 1013 The EFCC is the leading anti-corruption investigative unit in the Nigerian government. According to its 

website, the EFCC is designed “to combat financial and economic crimes. The Commission is empowered to 

prevent, investigate, prosecute and penalize [sic] economic and financial crimes and is charged with the 

responsibility of enforcing the provisions of other laws and regulations relating to economic and financial crimes.” 

http://www.efccnigeria.org/index.php?option=com_content&task=view&id=12&Itemid=30.
183 

himself and his friends, and that he had engaged in fraudulent conversion of funds, corrupt 

practices, and money laundering.1014 In February 2007, a Nigerian ad hoc Senate Committee 

was formed to examine the EFCC charges. Mr. Abubakar made a presentation to the Committee, 

asserting in part that the allegations were a bid to prevent him from running for office.1015 The 

Senate Committee subsequently called for Mr. Abubakar to be “sanctioned,” because he had 

“abused his office by aiding and abetting the diversion of public funds in the sum of $145 

million” as loans to his friends.1016 The Subcommittee found no evidence, however, that the full 

Senate imposed such a sanction on Mr. Abubakar.

On August 5, 2009, U.S. Congressman William Jefferson was convicted by a Federal 

jury of soliciting bribes, money laundering, depriving citizens of honest services as a member of 

Congress, and operating his Congressional office as a racketeering enterprise.1017 During his 

trial, a videotape was shown in which the Congressman made a reference to Mr. Abubakar when 

the Congressman was seeking money from another person, but no evidence was introduced 

showing that Mr. Abubakar had actually sought or accepted a bribe from the Congressman. 

Mr. Abubakar asserted his innocence, and that his name had been invoked in the matter to ruin 

his reputation and prevent him from winning the Presidency in Nigeria.1018 

Currently, Mr. Abubakar does not hold political office in Nigeria, but has resumed his 

business career. The Subcommittee contacted him through his legal counsel, but he declined to 

participate in an interview. 

Jennifer Douglas. Jennifer Elizabeth Douglas, who has also gone by the names Jennifer 

Iwenjiora, Jamila Abubakar, and Jennifer Douglas-Abubakar, is the fourth wife of Atiku 

Abubakar. According to the Atiku Biography, Ms. Douglas was born in Nigeria as Jennifer 

Iwenjiora, worked as a television journalist at the Nigerian Television Authority, and dated 

Mr. Abubakar in the early 1980s, before leaving for the United States.1019 She lost touch with 

 

1014 See Mr. Abubakar’s defense of his actions, “PTDF: The Facts, The Fiction: Presentation to Senate Ad-Hoc 

Committee on Investigations into the Affairs of the Petroleum Technology Development Fund,” (2006), at 3, 

available at the Library of Congress, HD 9577.N52 A85 (hereinafter “Abubakar PTDF Defense”). See also, e.g., 

BBC News, “Nigeria Senate urges action on VP,” February 27, 2007, http://news.bbc.co.uk/2/hi/africa/6402241.stm. 1015 Abubakar PTDF Defense, at 3. 1016 Nigerian Senate Committee report as quoted in BBC News, “Nigeria Senate urges action on VP,” February 27, 

2007, http://news.bbc.co.uk/2/hi/africa/6402241.stm. See also, e.g., BBC News, “Nigeria Senate urges action on 

VP,” February 27, 2007, http://news.bbc.co.uk/2/hi/africa/6402241.stm; BBC, Profile: Atiku Abubakar, January 25, 

2007, http://news.bbc.co.uk/2/hi/africa/6292141.stm (“In a probe ordered by Mr Obasanjo, the vice-president was 

accused of diverting $125m from a public development trust fund into his personal businesses.”); Voice of America, 

“Nigerian Vice President Charged with Corruption,” October 10, 2006, http://www1.voanews.com/english/news/a13-2006-10-10-voa39.html. 

1017 See United States v. William J. Jefferson (USDC EDVA, June 4, 2007), Criminal No: 1:07CR209. See also 

Times Picayune, “William Jefferson's attorneys ask for 2-week sentencing delay,” October 8, 2009, 

http://www.nola.com/politics/index.ssf/2009/10/post_37.html. 

1018 Press reports discussing the Jefferson videotape and the allegations involving Mr. Abubakar were published as 

early as 2005 and the matter was referenced during the 2007 Nigerian campaign. See, e.g., BBC News, “US probes 

Nigeria vice-president,” August 29, 2005, http://news.bbc.co.uk/2/hi/africa/4192186.stm ; Washington Post, “FBI 

Says Jefferson Was Filmed Taking Cash - Affidavit Details Sting on Lawmaker,” May, 22, 2006. See also internal 

emails and news stories collected by Chevy Chase Bank, JD_004176-4301. 

1019 Atiku Biography at 260-61. 
184 

Mr. Abubakar while attending Howard University.1020 She subsequently married in the United 

States, took the married name of Jennifer Douglas, and later divorced,1021 becoming a naturalized 

U.S. citizen during this time period.1022 Ms. Douglas eventually renewed her relationship with 

Mr. Abubakar who came to visit her in the United States. According to the Atiku Biography, 

from late 1995 to early 1998, while Sani Abacha was in power in Nigeria, Mr. Abubakar “spent 

most of his time in Maryland” with Ms. Douglas, making occasional visits to Nigeria.1023 In or 

around 2000, Ms. Douglas became a doctoral student at American University1024 and, in 2007, 

received her doctorate degree in international relations. According to the Atiku Biography, Ms. 

Douglas and Mr. Abubakar “married officially in 2003.”1025 In July 2003, Ms. Douglas made a 

$1 million donation to the American University School of International Service Building 

Fund.1026

Since 2000, Ms. Douglas has resided in a luxury home in Potomac, Maryland, a wealthy 

suburb of Washington, D.C.1027 In bank account opening documents and tax documents, she has 

listed her occupation as “student,” “homemaker,” and “unemployed.” She has consistently told 

the banks where she opened accounts that her husband, Mr. Abubakar, provided the funds for her 

accounts. For example, in a November 21, 2003 letter provided to Citibank, she stated that she 

received “a yearly maintenance income from spouse of $500,000.”1028 She also said that she 

received dividends and interest from various accounts and investments totaling about $1,600 per 

month. In addition, she had access to $5 million in assets in a Jennifer Douglas Abubakar (JDA) 

Family Trust.1029 

The letter also stated that Ms. Douglas received a salary of about $62,000 per year from 

the Gede Foundation, which Ms. Douglas had established in 2002, to advance various charitable 

causes, including health problems in Nigeria. Ms. Douglas told Citibank that she received “a 

minimal income” of about $1,000 per month and “an agreed yearly bonus” of $50,000 “paid in 

 

1020 See 6/26/00 Citibank account opening application, B00007799-801 (2000 Citibank account opening 

documentation in which Ms. Douglas indicates she attended Howard University); Atiku Biography at 262. 1021 Atiku Biography at 261. 1022 See SEC v. Siemens Aktiengesellschaft, (USDC DC), Case No. 1:08-cv-02167-RJL (Dec. 12, 2008), Complaint, 

at paragraph 50 (describing Ms. Douglas as a dual citizen of Nigeria and the United States). 1023 Atiku Biography at 263. Sani Abacha unexpectedly died of a heart attack on June 8, 1998. 1024 See 6/26/00 Citibank account opening application B00007799-801 (Ms. Douglas indicates she was then a PhD 

student at American University). 

1025 Atiku Biography at 263. The biography states that prior to the marriage, Ms. Douglas converted to Islam “and 

took the name, Jamila.” Id. 

1026 11/21/03 American University Gift Agreement to Jennifer Douglas Abubakar, PAU026519; 8/19/08 internal 

American University email, PAU0108929. 1027 Maryland property records indicate that Ms. Douglas purchased the house in December 1999, for $1.75 million, 

and the deed was recorded in January 2000. See also 6/26/00 Citibank account opening application, B00007799-

801 (Ms. Douglas indicates she has lived at her Maryland residence for 6 months). See also 3/19/09 Citibank’s 

written responses to Subcommittee questions, PSI-Citi-34-0002; 2004 Residential Appraisal Report, B00007944-

7954 (valued property at $2.7 million); November 2003 letter by Ms. Douglas in Citibank files, B00007910 (valued 

property at $3 million). See also Atiku Biography at 263 (indicating that Mr. Abubakar and Ms. Douglas purchased 

the house together). 1028 11/21/03 letter from Ms. Douglas “To Whom It May Concern RE: Explanation of Income,” B00007910-11.

1029 Ms. Douglas told Chevy Chase Bank that this trust had been funded with a financial gift from her husband. 

JD_000209. 
185 

[a] lump [sum] yearly after every fundraising.”1030 Ms. Douglas also served as an unpaid trustee 

on the board of trustees of the American University of Nigeria (AUN), which was founded by 

Mr. Abubakar in 2003, to provide an American-style university in northern Nigeria where he was 

born. Documents indicate that Ms. Douglas helped convince American University to assist with 

the establishment of AUN and used her personal bank accounts to pay some AUN expenses. 

 Bank documents show that most of the funds in Ms. Douglas’ U.S. bank accounts came 

from wire transfers provided by offshore corporations. When her banks asked about these 

corporations, Ms. Douglas consistently told them that she was unfamiliar with the nature of the 

offshore corporations sending her money. In 2009, when the Subcommittee asked her about the 

Guernsey Trust Company, LetsGo, Sima Holding, and China Castle Investments, Ms. Douglas 

responded through her legal counsel that she “has no personal knowledge of these entities. To 

the extent that any of these entities were the source of deposits into her accounts or the AUN 

account, she understood that all such deposits came from her husband.”1031 

In December 2008, the U.S. Department of Justice and the U.S. Securities and Exchange 

Commission (SEC) filed criminal and civil pleadings alleging that Siemens AG, a major German 

company traded on the New York Stock Exchange, violated the U.S. Foreign Corrupt Practices 

Act (FCPA) by making bribery payments to obtain business in multiple countries, including 

Nigeria.1032 Siemens pleaded guilty to violating the books and recordkeeping provisions of the 

FCPA, and agreed to pay combined criminal and civil fines totaling more than $1.6 billion.1033 

One of the allegations in the SEC civil complaint against Siemens was that “approximately $2.8 

million of the bribe payments was routed through a bank account in Potomac, Maryland, in the 

name of the wife of a former Nigerian Vice President.”1034 The Subcommittee has obtained wire 

transfer documentation substantiating this allegation, as explained below. Through her legal 

counsel, however, Ms. Douglas denies any wrongdoing.1035

Ms. Douglas currently resides primarily in the United Arab Emirates, employed as a 

professor of political science at the American University of Sharjah. When contacted by the 

Subcommittee, Ms. Douglas voluntarily produced documents and answered written 

Subcommittee questions, but declined to participate in a Subcommittee interview. 

 

1030 11/21/03 letter from Ms. Douglas “To Whom It May Concern RE: Explanation of Income,” B00007910-11. 1031 11/13/09 letter from Ms. Douglas’ legal counsel, London & Mead, to the Subcommittee, PSI-Abubakar_ 

&_Weidenfeld-01-0003. 

1032 See United States v. Siemens Aktiengesellschaft, (USDC DC), Case No. Cr. 08-368 (Dec. 12, 2008); SEC v. 

Siemens Aktiengesellschaft, (USDC DC), Case No. 1:08-cv-02167-RJL (Dec. 12, 2008), Complaint. German 

authorities also filed charges. 

1033 See United States v. Siemens Aktiengesellschaft, (USDC DC), Case No. Cr. 08-368 (Dec. 12, 2008), 

Information, Plea Offer; SEC v. Siemens Aktiengesellschaft, (USDC DC), Case No. 1:08-cv-02167-RJL (Dec. 12, 

2008), Consent of Defendant Siemens Aktiengesellschaft; Department of Justice press release, “Siemens AG and 

Three Subsidiaries Plead Guilty to Foreign Corrupt Practices Act Violations and Agree to Pay $450 in Combined 

Criminal Fines,” No. 08-1105 (Dec. 15, 2008). 

1034 SEC v. Siemens Aktiengesellschaft, (USDC DC), Case No. 1:08-cv-02167-RJL (Dec. 12, 2008), Complaint, at 

paragraph 50. 

1035 Subcommittee interview of Ms. Douglas’ legal counsel, April 1, 2009. See also The Times-Picayune, 

“Conspiracy figure in Rep. William Jefferson case took bribes, SEC says,” January 1, 2009, 

http://www.nola.com/crime/index.ssf/2009/01/conspiracy_figure_in_rep_willi.html. 
186 

Mr. Abubakar, through his legal counsel, declined to answer any questions from the 

Subcommittee. 

American University of Nigeria. In addition to opening U.S. bank accounts for her 

personal use, Ms. Douglas opened several U.S. bank accounts on behalf of American University 

of Nigeria (AUN), which was founded by Mr. Abubakar in 2003. Originally called ABTI 

University, the school changed its name in September 2004, to ABTI American University of 

Nigeria, and then changed its name again in May 2007, to American University of Nigeria.1036 

The university is located in Yola, which is the capital of Adamawa State in Northern Nigeria, 

where Mr. Abubakar was born. It opened its doors to at least 110 students in 2005, and saw its 

first graduates in 2009.1037

The AUN website describes the school in the following manner: 

“American University of Nigeria was created in response to the demand for high-quality, 

American-style higher education in West Africa. Each year, thousands of West African 

families send their sons and daughters to universities in the United States. Many of these 

students would prefer to study here, in Nigeria, if a comparable education were available. 

Now these students do have a new option: AUN. 

The mission of AUN is to offer an education that is in every way the equal of what a 

student would experience at the best universities in the United States. The majority of the 

distinguished faculty are American; the campus facilities are world class – superior even 

to those found at most American campuses. The academic programs are built on the 

American model and are consistent in every way with US accreditation standards. 

The University was created in partnership with the American University in Washington, 

D.C., an institution with an international reputation for excellence.”1038 

Information reviewed by the Subcommittee indicates that Ms. Douglas played an active 

role in AUN’s establishment and operation. She approached American University in 2002, 

where she was a doctoral student, for assistance in establishing the university and acted as a 

liaison between the university and her husband. Since the university’s inception, she has served 

as an unpaid trustee on the AUN board of trustees. In addition, Ms. Douglas was tasked by her 

husband to help pay AUN bills, in particular the salaries of AUN professors who agreed to teach 

at AUN but requested payment in U.S. dollars. 

Bank records obtained by the Subcommittee show that AUN utilized several accounts at 

U.S. financial institutions, including personal accounts opened by Ms. Douglas at Citibank and 

Wachovia, and an account opened by Mr. Weidenfeld’s law firm at Suntrust Bank. Funding for 

those accounts came primarily from three offshore corporations, the Guernsey Trust Company, 

LetsGo, and Sima Holdings. In 2008, AUN also opened accounts at Standard Chartered Bank in 

 

1036 5/28/07 Nigerian Corporate Affairs Commission, Certificate of Incorporation of a Company, JD F 00430; 

9/29/04 letter from the Nigerian National Universities Commission to AUN, JD F 00431. 

1037 Subcommittee interview of American University officials, April 14, 2009. 1038 AUN website, http://www.aun.edu.ng/about.htm. 
187 

London and apparently is now in the process of closing its remaining U.S. accounts in favor of 

its London accounts. Bank records show that AUN also has accounts at several banks in Nigeria. 

From 2003 to 2007, American University accepted about $14 million in multiple wire 

transfers from LetsGo and the Guernsey Trust Company, to pay consulting fees for its work 

related to AUN. After receiving an inquiry from the Subcommittee about the source of these 

funds, American University negotiated a new consultancy agreement with AUN in 2008, in 

which AUN agreed to provide fees to AU directly from AUN’s own bank accounts. 

Edward Weidenfeld. Edward Weidenfeld is a U.S. lawyer who practices in the 

Washington, D.C. area, and has provided legal counsel to Ms. Douglas, Mr. Abubakar, and 

AUN.1039 Mr. Weidenfeld first met Ms. Douglas in 2002, when he provided her with estate 

planning services. He then had infrequent contact with her until 2004, when he provided 

additional legal services.1040 In August 2005, after her residence was searched in connection 

with the Congressman Jefferson investigation, he recommended a criminal defense attorney and 

worked as co-counsel in that matter.1041 Mr. Weidenfeld also provided legal advice to 

Mr. Abubakar related to his 2006-2007 presidential campaign in Nigeria.1042 At the request of 

Mr. Abubakar and Ms. Douglas, he has also provided legal advice related to their interactions 

with U.S. banks, helped advise AUN, and provided legal advice in connection with the 

Subcommittee’s inquiry.1043

Documents reviewed by the Subcommittee show that when Citibank closed the Douglasrelated accounts in 2007, Mr. Weidenfeld helped her open accounts at Wachovia Bank. 

Wachovia already provided banking services to American University and knew Mr. Weidenfeld. 

He provided a letter of recommendation for Ms. Douglas and served as a cosignatory on the 

AUN account she opened at that bank. When Wachovia indicated it planned to close the 

accounts, he persuaded the bank to grant Ms. Douglas additional time so that she could look for 

another bank. In 2008, he helped establish an AUN account at Suntrust Bank, opening it in 

connection with his law firm which already had accounts at the bank and agreeing to serve as the 

account signatory. During the first eight months of 2008, Mr. Weidenfeld accepted over $1.3 

million in wire transfers into his law firm account from the Guernsey Trust Company to pay the 

Abubakars’ legal bills, and has on occasion transferred funds to other accounts for them. He 

accepted another $2 million in offshore wire transfers into the AUN account for which he was a 

signatory. He told the Subcommittee that he never dealt directly with the Guernsey Trust 

Company and had no information about the company that sent him millions of dollars, but 

simply assumed it was providing funds supplied by Mr. Abubakar. 

Mr. Weidenfeld cooperated with the Subcommittee’s inquiry by voluntarily producing 

documents and answering written questions from the Subcommittee. 

 

1039 11/13/09 letter from Mr. Weidenfeld’s legal counsel, London & Mead, to the Subcommittee, PSIAbubakar_&_Weidenfeld-01-0022-32, at 22. 

1040 Id. See also 9/11/02 email from Ms. Douglas to Chevy Chase Bank, Chevy Chase 4, JD_004302/004762 

(changing her attorney to Mr. Weidenfeld). 

1041 11/13/09 letter from Mr. Weidenfeld’s legal counsel, London & Mead, to the Subcommittee, PSIAbubakar_&_Weidenfeld-01-0022-32, at 22. 

1042 Id. 1043 Id. 
188 

Gabriele Volpi. Gabriele Volpi, 63, is a citizen of Italy, a billionaire, and a businessman 

associated with numerous ventures, including Orlean Invest Holdings Ltd. and Intels, which are 

active in the oil industry in western Africa. Mr. Volpi told the Subcommittee that he is currently 

the chairman of Orlean.1044 He is also the managing director and chief executive officer of 

Intels, which owns oil terminals and oil services zones at multiple ports in Africa.1045 He is 

known for his ownership of a luxurious 60-meter yacht and an internationally recognized water 

polo team in Italy.1046 

Mr. Volpi is closely associated with the three offshore corporations, the Guernsey Trust 

Company, LetsGo, and Sima Holding, that collectively sent over $38 million to the United States 

in connection with this matter. He is one of the three directors and trustees of the Guernsey 

Trust Company, which is located in Nigeria.1047 LetsGo is a Panamanian corporation which 

“receives and disburses funds for personal and business use from companies owned or controlled 

by Mr. Volpi,” and it is beneficially owned by Mr. Volpi and his wife.1048 Sima Holdings is a 

British Virgin Islands corporation that is beneficially owned by Mr. Volpi, his wife, and sons 

through a family trust.1049 

Mr. Volpi cooperated with the Subcommittee investigation by voluntarily answering a 

number of questions through his legal counsel. 

B. Using Offshore Corporations To Bring 

 Suspect Funds Into the United States 

From 2000 to 2008, Mr. Abubakar and Ms. Douglas used a network of accounts at U.S. 

financial institutions to bring over $40 million in suspect funds into the United States through 

multiple wire transfers supplied by offshore corporations located in Germany, Nigeria, Panama, 

the British Virgin Islands, and Switzerland. Nearly $25 million of those funds were wire 

transferred to more than 30 U.S. bank accounts opened by Ms. Douglas in her own name or in 

the name of the Jennifer Douglas Abubakar Family Trust, the Gede Foundation, or American 

University of Nigeria (AUN). She opened 18 of those accounts at Citibank, four at Chevy Chase 

Bank, six at Wachovia Bank, and three at Eagle Bank in Maryland, among other financial 

institutions. These four banks opened accounts for Ms. Douglas in most cases without being 

aware of her PEP status, at times relying on third party vendors using incomplete PEP databases 

or inadequate due diligence procedures. Over time, as each financial institution began to ask 

questions about the offshore corporations sending her funds and decided to close her accounts, 

she opened new accounts at other financial institutions, at times with the assistance of her U.S. 

lawyer, Edward Weidenfeld. Mr. Weidenfeld also accepted $3.4 million from offshore entities 

to pay the Abubakars’ legal bills and to fund an AUN account he opened at Suntrust Bank. 

 

1044 PSI-Volpi-02-0001-6 at 3. 1045 Mr. Volpi’s legal counsel, January 12, 2010. 1046 See, e.g.,Visit-Montenegro.com, “The owners of ‘Pro Recco’ in the Bay of Kotor,” June 17, 2009, www.visitmontenegro.com/article-mne-21720.htm. 

1047 PSI-Volpi-02-0001-6 at 2. 1048 Id. 

1049 Id. 
189 

To analyze these accounts and transactions, the Subcommittee subpoenaed documents 

from a number of U.S. financial institutions. In most cases, the Subcommittee obtained bank 

documents covering a five-year period, from 2003 to 2008, although it obtained records for some 

earlier transactions as well. The Subcommittee did not attempt to trace all of the funds that went 

into or out of the accounts discussed below, nor did the Subcommittee examine every U.S. bank 

account opened by Ms. Douglas.1050 Instead, the Subcommittee focused its analysis on more 

than 30 accounts at five U.S. banks, as detailed below. The resulting analysis, while limited, 

shows how Mr. Abubakar and Ms. Douglas used offshore corporations to bring suspect funds 

into the United States and provides a conservative estimate of the amount of funds they actually 

introduced into the U.S. financial system to advance their interests. 

(1) Citibank

From 2000 to 2007, Mr. Abubakar and Ms. Douglas opened 18 different accounts at 

Citibank in Potomac, Maryland, and brought nearly $20 million in suspect funds into the United 

States through the bank. These accounts consisted of five personal checking accounts, five 

savings accounts, two brokerage accounts, a home equity account, three accounts in the name of 

the Gede Foundation, and two additional personal checking accounts that were later expanded to 

reference both Ms. Douglas and AUN.1051 Ms. Douglas also maintained four Citibank credit 

card accounts, three of which were for herself or her husband, and one of which was for the Gede 

Foundation. Over the nearly seven years these accounts were open, Ms. Douglas received 

multiple wire transfers totaling nearly $20 million from Siemens AG, LetsGo, Guernsey Trust 

Company, Sima Holding, China Castle Investments, and a few unidentified “clients.” For most 

of the seven years, Citibank was unaware of Ms. Douglas’ PEP status. In 2007, Citibank learned 

of Ms. Douglas’ PEP status, and began closing her accounts. By August 2007, all of her 

accounts were closed.1052

Initial Personal Accounts. Ms. Douglas opened her first two accounts with Citigroup 

on June 28, 2000, Checking Account No. 52096374 and Savings Account No. 52096382.1053 In 

the account opening documentation, Ms. Douglas identified herself as a U.S. citizen residing in 

Maryland, and supplied a Social Security number.1054 Citibank told the Subcommittee: “Nothing 

in Ms. Douglas’s initial application referenced or suggested that she had any connection to a 

foreign country or had a relationship with any foreign official. As a result, consistent with 

applicable law, Ms. Douglas was not considered to be a ‘politically exposed person’ or 

 

1050 For example, Ms. Douglas had two accounts at Riggs Bank from September 1999 through May 2005, Checking 

Account No. 24-776-946 and Money Market Account No. 64-838-355, which received over $5.2 million in deposits. 

When PNC purchased Riggs Bank, it provided Ms. Douglas with a new account, No. 53-0100-7567, from May 2005 

to May 2008, which received deposits totaling nearly $1.1 million, including four $100,000 wire transfers from the 

Guernsey Trust Company in Nigeria. See list of Douglas accounts prepared by her legal counsel and related wire 

transfer documentation, no bates number. The Subcommittee did not attempt to trace these funds or determine how 

they related to the accounts examined in this Report.

1051 See list of accounts, B00008784. 1052 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-0002. The Subcommittee’s 

subpoena to Citibank concerning the Ms. Douglas accounts was sent on July 5, 2007. 1053 See list of accounts, B00008784; 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-

0001. 

1054 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-0002. 
190 

‘PEP.’”1055 During her seven years with Citibank, this initial personal checking account was the 

one that received the bulk of the wire transfers from offshore corporations. 

Credit Card Accounts. Also in 2000, Ms. Douglas opened two personal CitiCard credit 

card accounts.1056 One credit card account, opened in June 2000, listed both her and 

Mr. Abubakar as authorized signatories and identified Mr. Abubakar as her husband, but did not 

identify him as a foreign official.1057 A second credit card account, opened in July 2000, also 

listed both her and Mr. Abubakar as authorized users, and was linked to a third credit card 

account held solely in Ms. Douglas’s name and for which Ms. Douglas was financially 

responsible.1058 The first credit card account was closed in March 2005. The second remained 

open until all the Douglas-related accounts were closed in 2007. Citibank told the Subcommittee 

that these credit card accounts were “the only Citigroup accounts indentified to which Ms. 

Douglas’s husband had a direct connection.”1059 

Smith Barney Account. In June 2000 and January 2001, Ms. Douglas opened two 

brokerage accounts at Citibank’s affiliated broker-dealer, Smith Barney, Account No. 62H07385 and Account No. 168-24253 (later renumbered 232-75087).1060 The 2000 account was 

apparently never funded; the 2001 account was initially funded with a $500,000 cashiers check 

and engaged in a number of investments, but did not grow substantially larger and essentially 

went dormant in September 2006.1061

Household Account. On August 8, 2001, Ms. Douglas opened a second personal 

checking account at Citibank, Checking Account No. 1209003581, which she deemed her 

“household account.”1062 At first, this checking account was linked to a high-yield savings 

account, IMMA No. 1208951651, which was initially funded with about $50,000, and a 

Certificate of Deposit No. 1679323897, which was initially funded with about $100,000.1063 By 

late 2001, however, all the funds in the savings account and certificate of deposit, which then 

totaled about $300,000, were withdrawn, and the household checking account continued on its 

own.1064 Over the six years this account was open, Ms. Douglas wrote numerous checks each 

month to pay a variety of household expenses, relying primarily on deposits from her other 

accounts for funds and, beginning in 2004, on loans from a home equity account described 

below. Altogether in a month, Ms. Douglas wrote checks that totaled anywhere from $10,000 to 

 

1055 Id. The 2001 Patriot Act, which is the key statute requiring enhanced due diligence of PEP accounts, was 

enacted a year after the first Douglas account was opened. 1056 See list of accounts prepared by Citibank, B00008785; 3/19/09 Citibank’s letter in response to Subcommittee 

questions, PSI-Citi-34-0004. 

1057 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-0004. 1058 See list of accounts, B00008785; 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-

0004 

1059 Id. 1060 Id., at PSI-Citi-34-0003. The 2001 account was later renumbered 232-7508715. List of accounts, B00008784. 1061 B00001920-21. Citigroup was unable to locate the cashiers check and believes it was kept at the World Trade 

Center and was destroyed on September 11, 2001. 3/19/09 Citibank’s letter in response to Subcommittee questions, 

PSI-Citi-34-0003. Id., at 5. 

1062 See list of accounts, B00008784; August 2001 account statement, B00007762-64. 1063 See August 2001 account statement, B00007762-64. 1064 See October-November 2001 account statement, B00007748. 
191 

$90,000.1065 This account remained open until all the Douglas-related accounts were closed in 

2007.1066

Home Equity Account. In April 2004, Ms. Douglas opened a home equity account at 

Citibank, Equity Source Account No. 7707591587.1067 She used this account to obtain a line of 

credit from Citibank, secured by her Maryland residence.1068 Her borrowings rose from about 

$159,000 in April 2004, to more than $350,000 during 2006 and 2007. Ms. Douglas told the 

Subcommittee she used these funds to support her “household and charitable activities.”1069 Ms. 

Douglas made regular payments on the home equity loan from April 2004 until the account was 

closed in August 2007,1070 paying a total of about $975,000.1071 Ms. Douglas told the 

Subcommittee: “All monies used to make the repayments on the line of credit, as well as all 

monies used to pay her expenses, and to fund her contributions to AUN, GEDE Foundation, and 

American politicians and political groups, came from her husband.”1072

Gede Foundation Accounts. In February and March 2002, Ms. Douglas opened three 

bank accounts in the name of the Gede Foundation Inc., Checking Account No. 17581251, 

Checking Account No. 17581366, and Savings Account No. 17581278.1073 Six months later, in 

September 2002, the Foundation also received a Citicard credit card.1074 The account opening 

documentation shows that Gede Foundation provided a copy of its certificate of incorporation, a 

W-8 BEN form, and a copy of Ms. Douglas’ Maryland driver’s license.1075 Ms. Douglas 

provided “Abubakar” as her married name.1076 Citibank told the Subcommittee that it later 

revised its policy towards nonprofit organizations to require more enhanced due diligence for 

organizations providing services outside of the United States.1077 

AUN Accounts. On April 4, 2005, Ms. Douglas opened Checking Account No. 

1209739556, initially under her own name, but later, on an unspecified date, changed the account 

 

1065 See account statements from 2001 to 2007, B00007468-764. 1066 See list of accounts, B00008784. 1067 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-0004. 1068 6/14/04 Citibank Deed of Trust, B 00007851-7860; see also 2/11/04 Citibank Account Agreement and 

Disclosure, B00008085-91. 

1069 11/13/09 written response from Mr. Weidenfeld’s legal counsel to Subcommittee questions, PSI-Abubakar & 

Weidenfeld-01-0030. 

1070 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-0004. 1071 Subcommittee interview of Citibank officials, April 24, 2009. See B00008796-99 for complete list of advances 

received by Ms. Douglas and payments made by Ms. Douglas. 

1072 11/13/09 written response from Mr. Weidenfeld’s legal counsel to Subcommittee questions, PSIAbubakar_&_Weidenfeld-01-0019. 

1073 See list of accounts, B00008784. 1074 Id; B00001440-42. 1075 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-0002. 1076 Id. 1077 Id., at PSI-Citi-34-0003 (“If the Gede Foundation accounts had been opened after 2006, they would have been 

required to provide information relating to its purpose, the exact geographical area it serves, its organizational 

structure, its funding criteria, its affiliation with other entities, governments or groups, as well as its financial 

information including internal controls and audits. In addition, the entity and its principals would have been subject 

to background checks in World Check or a comparable database, which may have revealed further information 

about Ms. Douglas’s background.”).
192 

name to “Jennifer Douglas/ABTI American University.”1078 “ABTI American University” refers 

to AUN by an earlier name. Citibank told the Subcommittee that when Ms. Douglas added the 

university to the account, it should have been re-categorized as a business account, and that its 

continuing to operate as a personal account was “inconsistent with [Citibank] practice.”1079

Seven months later, on January 13, 2006, Ms. Douglas opened another personal checking 

account that was also used by AUN, Checking Account No. 1208993341.1080 This account 

initially referred solely to Ms. Douglas who was the only signatory.1081 Later, on an unspecified 

date, she changed the account name to: “Jennifer Douglas/ABTI-American University,” which 

again refers to AUN by an earlier name.1082 On February 27, 2006, Buford George Peterson, 

AUN’s Vice President of Finance and Administration,1083 was added as a co-signatory on the 

account.1084 In March 2006, the account name was changed a third time, to “Buford George 

Peterson/ABTI-American University.”1085 Citibank told the Subcommittee that, like the first 

AUN account, “this account remained incorrectly categorized as a personal checking account 

following the title change.”1086 

Additional Personal Accounts. In 2005, Ms. Douglas opened five more personal 

accounts, three of which were opened for only a short period. The short-term accounts were 

Checking Account No. 1209739572, which Ms. Douglas opened on April 5 and closed six 

months later on October 31, 2005; and a Checking Account No. 1209763257 and savings 

account bearing the same identifying number, both of which were opened on May 12 and closed 

four months later in September 2005.1087 These accounts held minimal funds. The two longer 

term accounts were Checking Account No.1208896250 and Savings Account No. 1208896269, 

both of which were opened on September 22, 2005, and closed in 2007.1088 The checking 

account held limited funds which were transferred over the course of six months to the Gede 

Foundation; the account then went dormant until it was closed. The savings account was opened 

in the name of Ms. Douglas and one of her sons. At times it had minimal funds, but from mid2006 to mid-2007, a few large transfers went into and out of the account each month, involving 

$100,000 to $200,000 at a time.1089 

 

1078 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-0003. AUN opened its doors to 

students for the first time in September 2005. 

1079 Id. 1080 See list of accounts prepared by Citibank, B00008784. 1081 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-0003. 1082 Id. 1083 See 9/21/06 internal American University memorandum, PAU0108924 1084 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-0003. 1085 Id. 1086 Id. 1087 See list of accounts, B00008784. Citibank told the Subcommittee that the signature card for Account No. 

1209763257 could not be located. 7/24/08 letter from Citibank to the Subcommittee, PSI-Citi-32-0001. 

1088 See list of accounts, B00008784. 

1089 See, e.g., May 2006 account statement, B00006085 ($100,000 deposit); June 2006 account statement, 

B00006083 ($100,000 deposit and $200,000 in withdrawals); October 2006 account statement, B00006077 

($130,000 in deposits); December 2006 account statement, B00006075 ($200,000 deposit and $75,000 in 

withdrawals). 
193 

Safe Deposit Boxes. In addition to her financial accounts at Citibank, in December 2001 

and January 2004, Ms. Douglas opened two safe deposit boxes at the bank.1090

Citibank Account Activity. From 2000 to 2007, Ms. Douglas accepted multiple large 

wire transfers into her accounts, totaling nearly $20 million, from offshore corporations, 

including Siemens AG, LetsGo Ltd. Inc., Guernsey Trust Company Nigeria Ltd., Sima Holding 

Ltd., and China Castle Investments Ltd. Most of the incoming funds were wire transferred into 

her initial personal checking account. In 2001 and 2002, for example, Ms. Douglas accepted 

wire transfers totaling nearly $2 million in suspect payments from Siemens AG. On January 30, 

2003, she received a single wire transfer for $500,000 from China Castle Investments. Citibank 

told the Subcommittee that it had no further information about this company and deemed the 

transfer “questionable.”1091 From 2003 to 2007, another $17 million was wire transferred into 

her account by LetsGo Ltd., the Guernsey Trust Company, and Sima Holdings Ltd. Banking and 

credit card records show that, over the years, Ms. Douglas spent much of the money she received 

to support a lavish lifestyle as well as supporting the Gede Foundation and AUN. 

Siemens Payments. As explained earlier, in December 2008, the U.S. Department of Justice 

(DOJ) and U.S. Securities and Exchange Commission (SEC) filed criminal and civil pleadings 

alleging that Siemens AG had violated the U.S. Foreign Corrupt Practices Act (FCPA) and 

engaged in a wide-ranging pattern of paying bribes to foreign officials to advance its interests in 

several countries.1092 Siemens pled guilty to violating the books and recordkeeping requirements 

of the FCPA.1093 One provision in the SEC complaint alleged as follows: 

“[A]pproximately $2.8 million of the bribe payments was routed through a bank account in 

Potomac, Maryland, in the name of the wife of a former Nigerian Vice President. The Vice 

President’s wife, a dual U.S.-Nigerian citizen living in the United States, served as the 

representative of a business consultant that entered into fictitious business consultant 

agreements ... but did no actual work for Siemens. The purpose of these payments was to 

bribe government officials. Other corrupt payments included the purchase of approximately 

 

1090 See list of accounts, B00008784. 

1091 See B00007059; 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-0004. China 

Castle Investments did not appear again in the Douglas-related banking records. 

1092 See United States v. Siemens Aktiengesellschaft, (USDC DC), Case No. Cr. 08-368 (Dec. 12, 2008); SEC v. 

Siemens Aktiengesellschaft, (USDC DC), Case No. 1:08-cv-02167-RJL (Dec. 12, 2008), Complaint. German 

authorities also filed charges. See also Department of Justice press release, “Siemens AG and Three Subsidiaries 

Plead Guilty to Foreign Corrupt Practices Act Violations and Agree to Pay $450 in Combined Criminal Fines,” No. 

08-1105 (Dec. 15, 2008) (DOJ Acting Assistant Attorney General said: “Today’s filings make clear that for much 

of its operations across the globe, bribery was nothing less than standard operating procedure for Siemens.” SEC 

Director of Enforcement said: “This pattern of bribery by Siemens was unprecedented in scale and geographic 

reach. The corruption involved more than $1.4 billion in bribes to government officials in Asia, Africa, Europe, the 

Middle East and the Americas.”). 

1093 See United States v. Siemens Aktiengesellschaft, (USDC DC), Case No. Cr. 08-368 (Dec. 12, 2008), 

Information, Plea Offer; SEC v. Siemens Aktiengesellschaft, (USDC DC), Case No. 1:08-cv-02167-RJL (Dec. 12, 

2008), Consent of Defendant Siemens Aktiengesellschaft; Department of Justice press release, “Siemens AG and 

Three Subsidiaries Plead Guilty to Foreign Corrupt Practices Act Violations and Agree to Pay $450 in Combined 

Criminal Fines,” No. 08-1105 (Dec. 15, 2008).
194 

$172,000 in watches for Nigerian officials designated in internal Siemens records as ‘P.’ and 

‘V.P.,’ likely referring to the President and Vice President of Nigeria.”1094

The Subcommittee contacted Siemens about this allegation and also reviewed the 

Citibank account records. The Subcommittee identified Citibank records showing three wire 

transfers from Siemens AG, in 2001 and 2002, that together provided over $1.7 million to 

Ms. Douglas’ personal checking account at Citibank. This chart identifies those wire transfers. 

  Siemens Wire Transfers to Douglas Account at Citibank: 52096374

Using Citibank Wire Transfer Records

Wire Transfer Directed To   Date Amount Bates

J.E. Douglas 4/12/01 $450,703.79 B00007975, B00007962‐63,

B00007972

J.E. Douglas 10/01/01 $461,440.92 B00007979, B00007965‐66

J.E Douglas Steradian Co. UK 1/28/02 $860,500.00 B00007989, B00007968‐69,

B00007984

SOURCE: Citibank     $1,772,644.71 ‐ TOTAL

Chart prepared by Subcommittee   

When contacted by the Subcommittee, Siemens confirmed the information in the SEC 

complaint and said that the allegations in the complaint referred to payments made by the 

company to Ms. Douglas and to wire transfers sent to her checking account at Citibank in 

Potomac, Maryland.1095 Siemens told the Subcommittee that it had asked an outside law firm, 

Debevoise & Plimpton, to conduct an independent investigation into corruption allegations, 

which included a review of the payments made by Siemens related to Ms. Douglas. Siemens 

told the Subcommittee that the law firm confirmed not only that Siemens AG had sent wire 

transfers to Ms. Douglas’ account at Citibank, but also that it had sent a wire transfer to her at 

another bank and made nearly $2 million in additional cash payments to her over a three-year 

period, from 2000 to 2003. Siemens told the Subcommittee that those wire and cash payments 

had been made to “J.E. Douglas” or two companies she beneficially owned, “J.E Douglas 

Steradian Co. UK L,” or “Peniel Inc. UK Ltd.” 

The Subcommittee contacted the SEC for additional information related to its complaint, 

but the SEC declined to elaborate due to an ongoing investigation into individuals involved in 

the Siemens misconduct.1096 The Subcommittee also showed the Citibank wire transfers to Ms. 

Douglas’ legal counsel and requested an explanation of the $1.7 million in wire transfers from 

Siemens to her account. Her legal counsel did not provide an explanation. 

 

1094 SEC v. Siemens Aktiengesellschaft, (USDC DC), Case No. 1:08-cv-02167-RJL (Dec. 12, 2008), Complaint, at 

paragraph 50. 

1095 Subcommittee interviews of Siemens AG officials, January 14 and 22, 2010. 

1096 Subcommittee interview of SEC officials, January 12, 2010. 
195 

Siemens Payment and Gede Foundation. According to Citibank records, one of the 

Siemens wire transfers for $860,500 was deposited into Ms. Douglas’ personal checking account 

on January 28, 2002. Three days earlier, on January 25, 2002, Ms. Douglas had formed the Gede 

Foundation Inc. as a nonprofit corporation under the laws of the District of Columbia.1097 The 

Foundation articles of incorporation provide it with wide authority to pursue charitable 

causes.1098 The Gede Foundation website states: 

 “Gede Foundation is a 501c (3) non-profit, non-governmental organization that works 

for the benefit of the people of Africa to restore to them the right to a sense of self worth, 

and a life of hope, health and happiness through programs that educate, promote healthy 

communities and help eliminate the stigma of illness.”1099

Cynthia J. Ticao, a Phillipines national, is the Foundation’s executive director and has been listed 

as an account signatory on the Gede Foundation accounts at Citibank.1100

On February 1, 2002, four days after receiving the $860,500 from Siemens, Ms. Douglas 

transferred $250,000 to a newly opened Gede Foundation account at Chevy Chase Bank, as 

described below. She also opened a Gede Foundation account at Citibank.

LetsGo, Guernsey Trust Company, and Sima Holding Payments. Over a four-year 

period from 2003 to 2007, Ms. Douglas also accepted nearly $17 million in wire transfers from 

LetsGo, Guernsey Trust Company, and Sima Holdings into her Citibank accounts. As explained 

earlier, the Guernsey Trust Company is a Nigerian shell corporation that manages the Abubakar 

Blind Trust, while LetsGo and Sima Holdings are offshore corporations beneficially owned by 

Mr. Volpi and his relatives. 

 

1097 See 1/25/02 D.C. Certificate of Incorporation, B00006886. See also Gede account opening documentation, 

B00006884, 6904. Ms. Douglas is the Foundation’s “founder, CEO, and president.” See Gede Foundation website, 

http://www.gedefoundation.org/.

1098 Id., at B00006887-92. Ms. Douglas’ legal counsel told the Subcommittee that she founded the Gede 

Foundation “to provide services to HIV patients in Africa and to implement developmental programs there,” and 

provided information showing that the Foundation had partnered with U.S., Nigerian, and international 

organizations to provide training, research, and health services in Nigeria. 11/13/09 letter from Ms. Douglas’ legal 

counsel, London & Mead, to the Subcommittee, PSI-Abubakar_&_Weidenfeld-01-0001-21, at 04-12. 

1099 Gede Foundation website, http://www.gedefoundation.org/. 1100 2/1/02 Citibank Business & Professional Account Opening Form, B00006893. 
196 

Most of these funds, about $10.4 million, were deposited into Ms. Douglas’ initial 

personal checking account by LetsGo and the Guernsey Trust Company. These wire transfers, 

which arrived every month or two, provided large sums varying from $50,000 to $450,000 per 

payment. The following chart identifies those wire transfers.1101 

Wire Transfers from Offshore Corporations to  

Douglas Account at Citibank: 52096374

From LetsGo Accounts at Wegelin &

Co. and Banca Del Gottardo

From Guernsey Trust Company Account

at Wegelin & Co.

Date Amount Bates      Date Amount Bates

04/09/03 $  249,965 B 00007077    06/14/06 $  100,000 B 00007283

04/25/03 $  299,965 B 00007078    11/03/06 $  349,980 B 00000812

07/02/03 $  249,965 B 00007094    12/06/06 $  349,980 B 00000813

10/14/03 $  149,965 B 00007114    12/08/06 $   50,000 B 00000814

11/03/03 $  249,965 B 00007119    12/29/06 $  350,000 B 00000820

02/12/04 $  249,965 B 00007133    01/31/07 $  350,000 B 00000819

09/08/04 $  149,980 B 00007167    03/06/07 $  350,000 B 00000818

11/12/04 $  249,985 B 00007178    04/02/07 $  350,000 B 00000815

12/09/04 $  249,965 B 00007183    04/30/07 $  449,980 B 00000817

01/06/05 $   99,980 B 00007188    05/31/07 $  350,000 B 00000816

02/08/05 $  199,980 B 00007192    TOTAL: $3,049,940  

03/10/05 $  199,980 B 00007197         

04/11/05 $  100,000 B 00007202         

05/09/05 $  275,000 B 00007207         

07/07/05 $  150,000 B 00007218         

07/12/05 $  100,000 B 00007219         

09/07/05 $  200,000 B 00007228         

10/11/05 $  250,000 B 00000978         

11/14/05 $  250,000 B 00007239         

12/05/05 $  450,000 B 00007245         

01/11/06 $  299,980 B 00007251         

02/21/06 $  300,000 B 00000979         

03/06/06 $  300,000 B 00000966         

04/03/06 $  300,000 B 00000958         

05/04/06 $  299,980 B 00007277         

06/01/06 $  300,000 B 00000957         

07/10/06 $  300,000 B 00000965         

08/04/06 $  300,000 B 00000975         

09/05/06 $  300,000 B 00000962         

10/05/06 $  350,000 B 00000956         

TOTAL: $7,424,620              

Chart prepared by Subcommittee  

 

1101 In some cases, the deposited amounts reflect the subtraction of wire transfer or other fees. 
197 

Another $5.5 million in wire transfers from LetsGo were deposited into the first 

Douglas/AUN checking account at Citibank. AUN first opened its doors to students in 

September 2005; these wire transfers began in mid-2005 and continued for the next two years, 

providing the account with a large sum every month or two, beginning with $100,000 and 

eventually increasing to $300,000 per payment. This chart identifies those wire transfers. 

Chart prepared by Subcommittee  

In addition, from 2004 to 2005, Sima Holdings sent four wire transfers totaling nearly 

$700,000 to Ms. Douglas. Most of these funds were deposited into her personal checking 

account, but also, on one occasion, provided funds to the Douglas/AUN account. This chart 

identifies those wire transfers. 

Wire Transfers from Sima Holding Ltd. to

Douglas and Douglas/AUN Accounts at Citibank

Citibank Account No. Date Amount Bates

52096374 (Douglas) 06/08/04 $249,965 B 00007152

52096374 (Douglas) 06/08/05 $100,000 B 00007213

52096374 (Douglas) 08/11/05 $200,000 B 00007223

1209739556 (Douglas/AUN) 08/11/05 $150,000 B 00006525

SOURCE: Citibank TOTAL: $699,965

Chart prepared by Subcommittee  

Wire Transfers from LetsGo Ltd. to

Douglas/AUN Account at Citibank: 1209739556

From LetsGo Account at Wegelin & Co.

Date Amount Bates

05/09/05 $100,000 B 00006533

06/07/05 $100,000 B 00006529

09/07/05 $150,000 B 00006520

10/06/05 $150,000 B 00006515

11/14/05 $150,000 B 00006510

01/11/06 $150,000 B 00006499

02/21/06 $150,000 B 00006496

03/07/06 $200,000 B 00006491

04/03/06 $200,000 B 00000959

05/04/06 $300,000 B 00000954

06/01/06 $300,000 B 00006481

07/10/06 $300,000 B 00000953

08/08/06 $300,000 B 00000967

09/05/06 $300,000 B 00000964

10/05/06 $300,000 B 00000955

11/03/06 $300,000 B 00000977

12/06/06 $300,000 B 00000974

12/29/06 $300,000 B 00000976

01/31/07 $300,000 B 00000972

03/05/07 $300,000 B 00000960

04/03/07 $300,000 B 00000970

05/03/07 $300,000 B 00000963

05/31/07 $300,000 B 00000969

SOURCE: Citibank TOTAL: $5,550,000
198 

 In addition to the wire transfers from these five offshore corporations, Ms. Douglas 

received several large wire transfers in 2003, totaling nearly $500,000, from unidentified 

persons. This chart identifies those wire transfers. 

Wire Transfers from Unidentified Originators to  

Douglas Account at Citibank: 52096374

Originator of Wire Date Amount Bates

“A Client” 02/06/03 $184, 970 B 00007064

“A Client” 02/14/03 $159,970 B 00007065

“A Client” 02/21/03 $154,970 B 00007065

SOURCE: Citibank TOTAL: $499,610  

Chart prepared by Subcommittee  

Ms. Douglas used much of the offshore funds sent to her personal checking account to 

pay personal bills and expenses, including roughly $50,000 per month in credit card bills, and 

$20,000 to $30,000 per month to the Weidenfeld law firm and her accountants, Penn, Schoen, 

Berland Associates. In early 2002, she also transferred funds to the Gede Foundation accounts at 

Citibank and Chevy Chase Bank. In addition, over five years, from the university’s inception to 

the closing of her Citibank accounts, Ms. Douglas transferred a total of about $763,000 to 

various American University and AUN accounts. 

 The following charts show the $763,000 that Ms. Douglas transferred on behalf of 

AUN, including about $330,000 that Ms. Douglas transferred from her Citibank personal 

checking account to an American University account at Chevy Chase Bank, and another $47,000 

from her personal checking account to an AUN account at Guaranty Trust Bank in Nigeria. In 

addition, she transferred about $384,000 from the second Douglas/AUN account at Citibank to 

the AUN account at Guaranty Trust Bank in Nigeria. 

Transfers from Douglas Personal Checking Account

at Citibank:  52096374 to AUN Accounts

To AU account at Chevy Chase Bank To AUN account at Guaranty Trust Bank

Date Amount Bates Date Amount Bates

04/21/03 $ 100,000.00 B 00007078 08/07/06 $  12,400.00 B 00007295

04/28/03 $ 100,000.00 B 00000906 08/07/06 $  12,030.00 B 00007295

08/05/03 $ 100,000.00 B 00000858 08/07/06 $   8,730.00 B 00007295

09/13/05 $     1,045.00 B 00007229 01/17/07 $    1,750.00 B 00007329

02/08/06 $     2,000.00 B 00007257 05/03/07 $    2,250.00 B 00007357

10/31/06 $        221.36 B 00007309 05/03/07 $   10,520.00 B 00007357

01/22/07 $     2,186.00 B 00007329 Source: Citibank TOTAL: $47,680.00

05/04/07 $    26,000.00 B 00007357 

Source: Citibank TOTAL:$331,452.36 

Chart prepared by Subcommittee  
199 

Wire Transfers from Douglas/AUN account at Citibank: 1208993341

to AUN account at Guaranty Trust Bank

Date Amount Bates

04/03/06 $  16,599.24 B 00006612

05/01/06 $    6,244.43 B 00006607

06/01/06 $    7,196.65 B 00006602

07/31/06 $    5,853.62 B 00006598

10/31/06 $  21,162.03 B 00006585

12/04/06 $    1,000.00 B 00006574

12/28/06 $  44,716.77 B 00006576

02/01/07 $  45,957.00 B 00006565

03/13/07 $  36,100.00 B 00006559

03/29/07 $  54,435.64 B 00006561

04/30/07 $  50,000.00 B 00000900

06/04/07 $    2,030.82 B 00006543

06/04/07 $  92,798.70 B 00000898

SOURCE: Citibank TOTAL: $384,094.90

       Chart prepared by Subcommittee

Account Concerns. Citigroup told the Subcommittee that it was aware of the offshore 

wire transfers going into the Douglas accounts and, at various points during the seven years the 

Douglas-related accounts were open, investigated specific transactions before deciding to close 

all the accounts in 2007.1102 

One such account review took place in 2003, when LetsGo and China Castle Investments 

sent multiple wire transfers to Ms. Douglas’ personal checking account totaling nearly $1.7 

million. Citibank told the Subcommittee that it had deemed these transactions 

“questionable.”1103 

At one point, Ms. Douglas provided an explanation of the source of the funds in her 

accounts in a letter that was retained in her Citibank account files.1104 In the letter dated 

November 21, 2003, addressed “To Whom It May Concern,” Ms. Douglas wrote: 

“I am stating exactly how I get my income. From Gede, I accept a minimal income of 

1076.23, with an agreed yearly bonus of $50,0000.00, [sic] paid in [a] lump [sum] yearly 

after every fundraising. I receive a yearly maintenance income from spouse of 

$500,000.00. Monthly dividends and interest from account excluding the Neuberger 

Berman account is $1,657.50. I also have an investment trust fund with Neuberger 

Berman with a standing balance of 5 million dollars plus.”1105 

 

1102 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-0004 (Citibank wrote: “Beginning 

in 2001 through 2007, Citigroup identified and investigated various issues in Ms. Douglas’s accounts.”). 1103 Id. 1104 11/21/03 letter from Ms. Douglas addressed “To Whom It May Concern,” B00007910. 1105 Id. 
200 

She also wrote that her home was valued at $3 million, with no outstanding mortgage.1106 The 

Douglas letter did not provide any information, however, about the offshore corporations sending 

funds to her accounts or explain the source of the funds provided by her husband. 

Three years later, in 2006, Citibank raised additional questions about the Douglas/AUN 

accounts. Citigroup told the Subcommittee that routine account monitoring had detected what 

appeared to be business activity in what was supposed to be Ms. Douglas’ personal checking 

account, including wire transfers involving LetsGo and the Guernsey Trust Company.1107 

Citigroup told the Subcommittee: “[B]usiness activity in a personal account raises questions 

because it is inconsistent with the information the customer provided the bank at the time of 

account opening.”1108 

Citibank told the Subcommittee that it spoke with Ms. Douglas concerning the 

Douglas/AUN accounts and told her that she needed to open business accounts in order to 

continue conducting transactions involving AUN.1109 Citibank said Ms. Douglas “responded that 

she had tried to open a business account but was unable to do so because she lacked the proper 

documentation.”1110 

According to Citibank, in early 2007, it learned for the first time that Ms. Douglas was 

married to a foreign official.1111 Mr. Abubakar was then finishing his second term as Vice 

President of Nigeria. On April 2, 2007, Ms. Douglas wrote to two AUN and AU officials that 

“Citibank wrote to me requesting that I close the ABTI [AUN] account because it is a business 

account being run from an individual account. They requested the account be closed by April 

17, but I am trying to get an extension to enable us [to] look elsewhere to open an account.”1112 

On April 9, 2007, a Citibank compliance officer wrote to the Citibank branch manager 

about the Douglas/AUN accounts as follows: 

“[P]lease find out from customer what type of company/business is ‘Letsgo Limited Inc’ 

located in Panama and which has accounts with a bank in Switzerland. Also, what type 

of company is Guernsey Trust Company Nigeria. These two companies sent multiple 

large ($300,000-) wire transfers to our customer’s account. We would like to thoroughly 

understand in what activities the customer is involved before we extend the close out and 

establish a new business account.”1113

 

1106 Id. 1107 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-0004. Citibank told the 

Subcommittee that it had not identified any transactions of concern involving Sima Holding Ltd. during 

investigations of Ms. Douglas’ accounts. 

1108 Id. 

1109 Id., at PSI-Citi-34-0005. 1110 Id. 1111 Subcommittee interview of Citibank officials, April 24, 2009. 1112 4/2/07 email from Ms. Douglas to American University, PAU107446. 1113 4/9/07 internal Citibank email, B00008102 
201 

The Citibank branch manager replied: 

“I have spoken to Ms. Douglas and she has informed me that Letsgo Limited and 

Guernsey Trust are both oil services companies. Since her husband is the owner of both 

companies, and is a very public figure, the trust accounts run those businesses for him. In 

turn, the funds from both companies are used to pay the salaries for the teachers in the 

ABTI-American University account. Funds from those business[es] also go into her 

personal accounts as well. She has expressed a desire for her personal account to remain 

open, and has said she will move the ABTI-American University account elsewhere.”1114

This Citibank email states that Ms. Douglas told the bank that LetsGo and Guernsey 

Trust Company were both owned by her husband. But LetsGo is beneficially owned by 

Mr. Volpi and his relatives, not by Mr. Abubakar. The Guernsey Trust Company manages the 

Abubakar Blind Trust, and the Subcommittee has been told that Mr. Abubakar was not and is not 

an owner of the company, although he is a beneficiary of the trust it manages. 

 In 2007, Citigroup decided to close not only the AUN accounts, but all of the accounts 

related to Ms. Douglas. It told the Subcommittee: 

“Because the business activity in her personal account continued after that discussion [in 

2006], and because in early 2007, CB was aware of Ms. Douglas’s status as the wife of 

the Vice President of Nigeria, as well as certain allegations surrounding Ms. Douglas and 

her husband, CB Compliance instructed the branch to close Ms. Douglas’s accounts.”1115 

 In an undated internal document, Citibank expressed the following concerns with Ms. 

Douglas’ accounts: “Wires that originate from businesses where relationships with the customer 

cannot be established, followed by transfers of the funds between accounts that ultimately end in 

the funds being sent to various individuals and businesses appears suspicious.”1116 In addition, 

an internal email dated August 10, 2007, from a Citibank fraud investigator stated: 

“Suspicious activity with advances from employer directly to Citibank accounts (to pay 

out bonus income). Still need to probe into documents received to review the 500k 

received yearly maintenance income from spouse. At this time have not been able to 

locate the documentation to verify the spousal maintenance. Highly suspect that 

someone claiming 30k in income to the IRS could obtain a 2.7 million dollar home with 

no mortgages. Lifestyle of the borrower is not reflected on the tax returns.”1117

Edward Weidenfeld, Ms. Douglas’ legal counsel, told the Subcommittee that, in the 

spring of 2007, he learned that the Citibank AUN accounts would be closed. He told the 

Subcommittee that he also learned at that time “that salaries of expatriate faculty and staff were 

 

1114 4/16/07 internal Citibank email, B00008535-56. 1115 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-0005. On March 30, 2007, a 

Citibank Compliance Office, expressed concern about the “...sensitive nature of this closeout and the reputational 

risk it may cause.” See 3/30/07 internal Citibank email, B 00008106. 

1116 Undated internal Citibank document, B 00008425. 1117 8/10/07 internal Citibank email, B 00008369. 
202 

paid by wire transfer” from the Douglas/AUN Citibank accounts, and “without this or a similar 

account, the ability of AUN to retain and recruit non-Nigerian staff would be severely 

limited.”1118 He said that on behalf of the Abubakars and AUN, he “engaged in intensive 

discussions urging AU to provide this payment facility for expatriate staff and faculty,” but 

“American University's financial office would not open such an account because AU wanted to 

maintain the separate identities of each institution.” 

Citibank told the Subcommittee that it ultimately gave Ms. Douglas additional time 

before closing the Douglas/AUN accounts, because Ms. Douglas was out of the country, and 

granting an extension would permit all account closings to occur at the same time.1119 Citibank 

closed her checking and savings accounts by the end of June, and closed all remaining accounts 

by the end of August 2007.1120 

(2) Chevy Chase 

A year after opening accounts at Citibank, Ms. Douglas also opened one account at 

Chevy Chase Bank in Potomac, Maryland, and three accounts at Chevy Chase Trust Company, 

then a subsidiary of Chevy Chase Bank. These accounts were active for about seven years, from 

2001 to 2008. Three of the accounts were opened in July 2001, as investment accounts for the 

Jennifer Douglas Abubakar (JDA) Family Trust. The account at the bank was opened six 

months later, in February 2002, for the Gede Foundation which had been formed the prior week. 

Chevy Chase Bank told the Subcommittee that it did not realize for five years that the two sets of 

accounts were related, since the JDA Family Trust accounts listed “Jennifer Douglas-Abubakar” 

as the trust beneficiary, while the Gede Foundation listed “Jennifer Douglas” as one of two 

account signatories. In addition, Chevy Chase Bank opened all of these accounts without being 

aware of Ms. Douglas’ PEP status.1121 In 2004, after Chevy Chase Bank determined that Ms. 

Douglas qualified as a PEP client, it increased its monitoring of the JDA Family Trust account, 

but not the Gede Foundation account. It took another three years, until 2007, for the bank to 

realize that the Gede Foundation account was linked to the same Ms. Douglas. 

None of the Chevy Chase accounts associated with Ms. Douglas received large wire 

transfers from offshore corporations as happened at other banks. The JDA Family Trust 

Account, for example, did not receive any new funds; it simply invested $5 million in preexisting trust proceeds. While the Gede Foundation did receive new funds, they came primarily 

from the Gede Foundation account at Citibank, and Chevy Chase Bank had no reason to know 

the Citibank Gede account was receiving funds that came from offshore corporations and the 

suspect Siemens payments. 

 

1118 11/13/09 written response from Mr. Weidenfeld’s legal counsel to Subcommittee questions, PSIAbubakar_&_Weidenfeld-01-0023. 

1119 3/19/09 Citibank’s letter in response to Subcommittee questions, PSI-Citi-34-0005. 1120 Id. 1121 At the time it opened the accounts in July 2001, Chevy Chase Bank verified that Ms. Douglas-Abubakar was a 

U.S. citizen and did not appear on the OFAC SDN list. 9/5/08 letter from Chevy Chase Bank’s legal counsel, Mayer 

Brown, to the Subcommittee, PSI-Chevy_Chase-06-0002. At that time, the Patriot Act of 2001 was not yet enacted 

into law, and its provisions calling for enhanced monitoring of PEP accounts would not become legal requirements 

until 2002. 
203 

In 2006, after hearing Ms. Douglas and her husband Mr. Abubakar mentioned in 

connection with the investigation of U.S. Congressman Jefferson, Chevy Chase Bank grew 

concerned about the source of funds in the JDA Family Trust account and decided to resign as 

trustee. Chevy Chase Trust Company told Ms. Douglas that it intended to close the account, but 

was persuaded by her and her lawyer to continue to hold the trust funds as a custodian until a 

new trustee was found – a process that took two years until 2008. In 2007, Chevy Chase Bank 

learned as a result of a Subcommittee inquiry, that Ms. Douglas also controlled the Gede 

Foundation account. The bank and the trust company closed all four Douglas-related accounts in 

2008. 

JDA Family Trust Accounts. According to a copy of the trust instrument in Chevy 

Chase Bank records, the JDA Family Trust was established in October 2000, by the Merrill 

Lynch Trust Company which served as the sole trustee and investment manager.1122 The 

purpose of the trust was “to make gifts to Jennifer Douglas-Abubakar and her family, to promote 

the well being of those persons, to preserve and enhance their financial assets, and to offer a 

framework for family governance.”1123 Chevy Chase described the Trust internally as “designed 

to permanently move funds to a trust for the benefit of Ms. Douglas-Abubakar and her children” 

and to provide “a nest egg to protect Jennifer Douglas-Abubakar and her children from negative 

life events concerning Mr. Abubakar.”1124 According to Ms. Douglas, her husband provided the 

initial funding for the trust as a gift to her, and she used that money to fund the trust.1125

Ms. Douglas served as the Trust grantor, “protector,” and one of its beneficiaries.1126 The 

other beneficiaries were her children.1127 In her role as Trust Protector, Ms. Douglas was given 

authority to remove or replace the trustee. The trustee was given discretion to invest the trust 

funds and make trust distributions.1128 After Merrill Lynch apparently invested the trust funds 

aggressively and reduced the trust principal from $6 million to $5 million over six months, Ms. 

Douglas decided to find a new trustee, and to split the trustee and investment management 

functions.1129 On July 20, 2001, she removed Merrill Lynch and appointed Chevy Chase Trust 

Company as the replacement trustee.1130 Ms. Douglas had intended to appoint her brother, 

Francis Iwenjiora as a co-trustee along with Chevy Chase Trust Company, but he was apparently 

out of town, and was added as a co-trustee a year later on July 31, 2002.1131 She also selected the 

 

1122 See 10/10/00 JDA Family Trust instrument, JD_000002-30; 9/5/08 letter from Chevy Chase Bank’s legal 

counsel, Mayer Brown, to the Subcommittee, PSI-Chevy_Chase-06-0002. 

1123 10/10/00 JDA Family Trust instrument, JD_000003. 1124 9/5/08 letter from Chevy Chase Bank’s legal counsel, Mayer Brown, to the Subcommittee, PSI-Chevy_Chase06-0007. 

1125 1/30/06 internal Chevy Chase Bank memorandum, JD_004360. 1126 5/8/07 letter from Chevy Chase Bank’s legal counsel, Mayer Brown, to the Subcommittee, PSI-Chevy_ChaseCL000001-5, at 3. 

1127 10/10/00 JDA Family Trust instrument, JD_000003. 1128 Id. 

1129 See 8/18/04 internal Chevy Chase email discussing account, JD_004176. 1130 See “Revocation of Prior Appointment and New Appointment of Successor Co-Trustees,” JD_000218; 

“Removal of Trustee and Appointment of Successor Co-Trustees,” JD_000031. 9/5/08 letter from Chevy Chase 

Bank’s legal counsel, Mayer Brown, to the Subcommittee, PSI-Chevy_Chase-06-0002; 8/18/04 internal Merrill 

Lynch email, JD_004176. 

1131 9/5/08 letter from Chevy Chase Bank’s legal counsel, Mayer Brown, to the Subcommittee, PSI-Chevy_Chase06-0002. 
204 

Neuberger Berman Trust Company, which is associated with the Lehman Brothers, as the 

investment manager.1132

On July 25, 2001, the JDA Family Trust opened three investment accounts at Chevy 

Chase Trust Company:1133 Fixed Income Account No. CH200121; Value Equity Account No. 

CH200122; and Blend Equity Account No. CH200123.1134 During the time the trust accounts 

were at Chevy Chase, no new funds were added; the bank simply accepted the trust funds 

transferred from Merrill Lynch and allowed the Neuberger Berman Trust Company to determine 

the specific investments. 

Gede Foundation Account. About six months later, on February 1, 2002, Ms. Douglas 

opened a commercial checking account at Chevy Chase Bank for the Gede Foundation, 

Checking Account No. 196430326-5.1135 The Gede Foundation had been formed the prior week 

under the laws of the District of Columbia. The account opening documentation listed two 

account signatories: Cynthia Ticao, the Gede Foundation executive director, and “Jennifer 

Douglas,” the Gede Foundation president.1136 Because Ms. Douglas did not use the name 

“Abubakar” when opening this account, Chevy Chase Bank apparently did not realize that she 

was the same person who had opened the JDA Family Trust account. 

Ms. Douglas initially funded the Gede Foundation account with a $250,000 check from 

her personal checking account at Citibank.1137 As shown in an earlier chart, three days earlier, 

on January 28, 2002, Ms. Douglas’ checking account had received a wire transfer in excess of 

$860,000 from Siemens AG, a payment which was part of a pattern of bribery payments Siemens 

made to advance its business interests around the globe. The timing of this Siemens payment, 

followed by the wire transfer to the Gede Foundation account, suggests that the Foundation 

account was initially funded with suspect funds, but there would be no reason for Chevy Chase 

Bank to know the transfer was suspicious. 

Over the next six years, from 2002 to 2008, Ms. Douglas provided a steady stream of 

wire transfers from her Gede Foundation account at Citibank, totaling at least $535,000 

altogether, to the Gede Foundation account at Chevy Chase Bank. Chevy Chase told the 

Subcommittee: “During the course of the [Gede Foundation] relationship, the account has been 

funded through a regular pattern of incoming wires that have averaged approximately two per 

month. Wire instruction information indicates that all incoming wires originated from a Gede 

Foundation account at Citibank.”1138 Because the funds were wire transferred from an account at 

another U.S. bank, Chevy Chase Bank did not know the true source of the funds, which came 

 

1132 See Chevy Chase memorandum about the JDA Family Trust, JD_000219; 10/26/01 letter from Neuberger 

Berman Trust Company to Ms. Douglas, JD_000221. 

1133 7/25/01 Chevy Chase Trust Account Acceptance Form, JD_000108-09. 1134 5/8/07 letter from Chevy Chase Bank’s legal counsel, Mayer Brown, to the Subcommittee, PSI-Chevy_ChaseCL000003. Several Chevy Chase managers then handled these accounts. Chevy Case Box 1, JD_000227-28 and , 

241-42. See also 8/18/04 internal Chevy Chase email discussing account, JD_004176. 

1135 See Chevy Chase Bank Signature Card, GF_000001. 1136 Id. 1137 Copy of Douglas personal check for $250,000, GF_000002-03; Chevy Chase account statement, GF_000006. 11385/8/07 letter from Chevy Chase Bank’s legal counsel, Mayer Brown, to the Subcommittee, PSI-Chevy_ChaseCL000001-05, at 05. 
205 

either from offshore corporations or the suspect Siemens wire transfers. From 2002 to 2008, the 

account paid out a total of about $215,000, with the largest single expenditure, about $75,000, 

for a fundraising event at a hotel. 

This chart identifies seven transactions involving $50,000 or more involving the Gede 

Foundation account at Chevy Chase Bank.1139 After 2003, none of the wire transfers into or out 

of the account exceeded $50,000. 

Gede Foundation Account at Chevy Chase Bank

Date Amount Originator Beneficiary Bates

2/1/02 $250,000 Check from Douglas personal

checking account at Citibank Gede Foundation GF_000002‐03

9/15/03 $50,000 Wire from Gede Foundation

Citibank 17581366 Gede Foundation Chevy Chase GF_000016‐17

9/17/03 $50,000 Wire from Gede Foundation

Citibank 17581366 Gede Foundation Chevy Chase GF_000018‐19

9/18/03 $60,000 Wire from Gede Foundation

Citibank 17581366 Gede Foundation Chevy Chase GF_000020‐21

9/29/03 $75,000 Check from Gede Foundation

Chevy Chase Marriott Wardman Park Hotel GF_000026‐27

10/08/03 $50,000 Wire from Gede Foundation

Citibank 17581366 Gede Foundation Chevy Chase GF_000022‐23

TOTAL: $535,000 SOURCE: Chevy Chase Bank

Chart created by Subcommittee

$400,000 Loan. In early 2004, Ms. Douglas transferred $400,000 from the JDA Family 

Trust account to her personal checking account at Citibank, describing it as a “loan” needed to 

fund charitable work in Nigeria. Ms. Douglas alerted the bank to her plans for the loan in a 

December 10, 2003 email sent to the Chevy Chase Trust Company: 

“Just want to alert you of a possible withdrawal on the account. I am trying to open a 

HIV/AIDs center (that would incorporate testing, counseling, and HIV/AIDS awareness 

education) in Nigeria. ... I have applied to my bank for the loan. They have not turned me 

down but in the event they do, I will have to withdraw the sum of $400,000 (four hundred 

thousand) to buy the equipments needed for the center. The monies will be returned as 

well.” 1140 

At first, Chevy Chase Trust Company expressed concern that the loan would be contrary 

to the terms of the JDA Family Trust. In a December 12, 2003 email, Chevy Chase wrote to Ms. 

Douglas: 

“There are some issues I believe we should discuss regarding this matter. As you know, the 

JDA Family Trust was established to provide benefits for you and your family. The purpose 

of the withdrawal, as I understand it, is to fund a foundation to help people in need outside of 

your family. As wonderful a goal as that is, there are legal restrictions on the use of trust 

 

1139 See 4/9/07 Chevy Chase wire transfer receipts, GF_000028-39; GF_000040-209. 1140 12/10/03 email from Ms. Douglas to Chevy Chase Trust, JD_000255. 
206 

funds that may prevent us from making such a distribution. I am reviewing the trust 

language now to see what it says in that regard.”1141 

Ms. Douglas responded: “The money is a loan to me and I have a right to request that. I 

could have equally said that I need it to make a purchase for something. ... Kindly send the 

money to the account that I have suggested and consider it a loan to be repaid back.”1142 She 

further stated that the money is for an “HIV/AIDS center (that would incorporate testing, 

counseling, and HIV/AIDS awareness education) in Nigeria. I need certain equipments for the 

center. While we have gotten over a million in funding, we need extra money to buy our 

equipments, until other promised funding comes in”).1143 

Chevy Chase ultimately allowed the loan and provided Ms. Douglas with the funds. 

Chevy Chase noted that “the terms of the JDA Family Trust entitle Ms. Douglas-Abubakar to 

request the distribution of funds that are in her best interest,” and allow “a distribution ‘to 

acquire, begin or operate a business or to engage in a profession.’”1144 Chevy Chase reported 

that because Ms. Douglas-Abubakar’s “stated purpose for borrowing from the trust was to 

support a center she was running ... [a] loan for this purpose met the conditions of the trust.”1145

On January 10, 2004, Chevy Chase authorized the $400,000 loan from the JDA Family 

Trust to Ms. Douglas.1146 On January 12, 2004, Ms. Douglas signed a promissory note 

promising to repay the loan.1147 On January 14, 2004, Chevy Chase sold funds from the trust 

investments, and then wire transferred $400,000 from the JDA Family Trust account to Ms. 

Douglas’ personal checking account at Citibank. The $400,000 was sent to her Citibank 

Account No. 52096374 in two installments, one transfer of $280,000 on January 14, 2004,1148

and another for $120,000 on January 21, 2004.1149 Ms. Douglas then transferred the funds from 

her account to the Gede Foundation account at Citibank, Account No. 17581366, with $260,000 

on January 15,1150 and $120,000 January 21.1151 It is unclear why she failed to transfer the loan 

proceeds directly from the JDA Family Trust account to the Gede Foundation account, and 

instead routed the funds first through her personal account. 

Soon after receiving the funds, the Gede Foundation account at Citibank subsequently 

dispersed them by international wire transfer and check. On January 16, 2004, the Gede 

Citibank account wired out $72,223, on January 22nd the account wired $63,985.85, on January 

26th the account wired $81,208.07 and on January 26th the account wrote a check for 

$135,981.1152

 

1141 12/12/03 email from Chevy Chase Trust to Ms. Douglas, JD_000253. 1142 12/12/03 email from Ms. Douglas to Chevy Chase Trust, JD_000257. 1143 12/10/03 email from Ms. Douglas to Chevy Chase Trust, JD_000256. 1144 9/5/08 letter from Chevy Chase Bank’s legal counsel, Mayer Brown, to the Subcommittee, PSI-Chevy_Chase06-0006. 

1145 Id. 1146 1/10/04 Citibank loan authorization agreement from the JDA Family Trust, JD_000283. 1147 12/12/04 “Non Negotiable Promissory Note,” JD_0000267-68. 1148 January 2004 Citibank account statement, B 00007129. 

1149 1/21/04 Citibank transaction record, B00000853. 1150 1/15/04 Citibank transaction record, B00000854. 1151 1/21/04 Citibank transaction record, B00000853. 1152 January 2004 Citibank Gede Account Statement, B00006040 
207 

Ten months later, in October 2004, Chevy Chase asked about the loan which had not 

been repaid. Ms. Douglas responded that she was “forcing to see about the repayment from the 

foundation for the loan they were given. Some of their grants didn’t come through yet because 

the studies will start next year so the grants are still on hold by the funding organization. But, it 

will be paid back.”1153 As of 2008, the loan had not yet been repaid.1154 

 

PEP Status. For the first three years her accounts were open, from 2001 to 2004, Chevy 

Chase did not know that Ms. Douglas was a PEP client and did not provide enhanced monitoring 

of her accounts, in part because the Patriot Act’s PEP requirements were not in effect when the 

account was opened. When they did take effect in 2002, Chevy Chase initially rated the JDA 

Family Trust account as a “low risk account” that did not warrant enhanced monitoring, because 

the bank viewed irrevocable trusts as presenting few money laundering risks and no new funds 

were being added to the trust.1155 

During the summer of 2004, a Chevy Chase associate general counsel asked several 

questions about the trust and requested biographical information for Mr. Abubakar.1156 

Apparently, the bank quickly learned that Mr. Abubakar was then Vice President of Nigeria. In 

an August 18, 2004 memorandum, a Chevy Chase compliance officer wrote: “The Abubakar’s 

are PEPs, and with the exception of this account, no other account relationships exist with the 

Bank. This account is considered high risk.”1157 The memorandum did not mention the Gede 

Foundation account, because the bank had not realized at that point Ms. Douglas’ connection to 

that account.1158 The memorandum called for enhanced monitoring of the JDA Family Trust 

accounts “to ensure activity is normal and commensurate with the type of activity expected for 

the Trust. Source of funds should be clearly identified and evaluated for reasonableness.”1159 

Later that same month, the bank officially designated Ms. Douglas, her children, and the JDA 

Family Trust as PEP clients due to their “association with a foreign political official,”1160 and 

assigned a “high risk” rating to the trust accounts.1161 

 

1153 10/20/04 email from Ms. Douglas to Chevy Chase Bank, JD_000316. 1154 Subcommittee interview of Chevy Chase Bank officials, 7/18/08. 1155 9/5/08 letter from Chevy Chase Bank’s legal counsel, Mayer Brown, to the Subcommittee, PSI-Chevy_Chase06-0002. Chevy Chase noted that the Patriot Act regulations on Customer Identification Procedures, including with 

respect to trusts, did not go into effect until October 2003. 

1156 Id., at PSI-Chevy_Chase-06-0004. 1157 8/18/04 internal Chevy Chase Bank memorandum, JD_004350. 1158 Chevy Chase told the Subcommittee: “The fact that Ms. Douglas-Abubakar used two different names prevented 

Chevy Chase Bank from tying the Gede Foundation account to the JDA Family Trust Account at Chevy Chase 

Trust.” 9/5/08 letter from Chevy Chase Bank’s legal counsel, Mayer Brown, to the Subcommittee, PSIChevy_Chase-06-0004. 1159 8/18/04 internal Chevy Chase Bank memorandum, JD_004350. 1160 9/5/08 letter from Chevy Chase Bank’s legal counsel, Mayer Brown, to the Subcommittee, PSI-Chevy_Chase06-0003; see also PSI-Chevy_Chase-06-0001 (“Jennifer Douglas-Abubakar was identified as a PEP because she is 

the wife of Alhaji Atiku Abubakar, then Vice President of Nigeria.”). 1161 5/8/07 letter from Chevy Chase Bank’s legal counsel, Mayer Brown, to the Subcommittee, PSI-Chevy_ChaseCL000004. 
208 

According to Chevy Chase, the accounts were then subjected to monthly monitoring to 

ensure the account activity was “normal and commensurate with that expected for the trust.”1162 

The first review took place in September 2004, with monthly reviews and reports to the Chevy 

Chase Trust Committee thereafter.1163

Account Concerns. For the next year, from 2004 to 2005, Chevy Chase Bank conducted 

enhanced monitoring of the JDA Family Trust account without incident. In late 2005, however, 

media reports began mentioning Mr. Abubakar in connection with the ongoing criminal 

investigation of Congressman Jefferson. After learning of these media reports, the trust 

company decided to resign as trustee from the JDA Family Trust and close the trust accounts. 

An internal Chevy Chase Trust Company memorandum dated January 30, 2006, 

recommended resigning from the JDA Family Trust for the following reasons: 

“ 1) Mr. Abubakar’s source of wealth is impractical to verify. Under the US PATRIOT 

Act, Chevy Chase Trust is obligated to conduct enhanced due diligence on its high 

risk accounts. Since Politically Exposed Persons (PEPs) are high risk, Chevy Chase 

Trust must develop a reasonable belief that the source of funds is not derived from 

illegal activities. Obtaining sufficient proof in Mr. Abubakar’s situation may not be 

possible. Failure to adequately document the source of funds for this relationship 

would increase the regulatory risk to the Trust Company.

2) The ongoing criminal investigation of Rep. William Jefferson could spread to 

Mr. Abubakar and his wife. If she were to be indicted, Chevy Chase Trust would be 

serving as co-trustee with person involved in suspected bribery of a US public 

official. Given the high degree of media that these cases are receiving currently, 

Chevy Chase Trust could be at increased reputation risk.”1164

With regard to the source of the trust funds, Chevy Chase noted that it “understood that 

Abubakar family wealth, principally that of Alhaji Atiku Abubakar, was the source of funds for 

the JDA Family Trust when it was established at Merrill Lynch.”1165 Chevy Chase noted that the 

trust had been fully funded prior to its coming to the bank, and thus Chevy Chase “did not 

undertake additional efforts to identify the source of funds in the account.”1166 The 

memorandum also noted: 

“Prior to becoming Vice President, Mr. Abubakar was the chairman of seven Nigerian 

companies involved in oil services, insurance, pharmaceuticals, agriculture and the print 

media. From 1969 to 1989, he served in the Nigerian Customs and Excise service. 

 

1162 Id. 1163 9/5/08 letter from Chevy Chase Bank’s legal counsel, Mayer Brown, to the Subcommittee, PSI-Chevy_Chase06-0003. 

1164 1/30/06 internal Chevy Chase Trust memorandum, JD_004360-61; see also 5/8/07 letter from Chevy Chase 

Bank’s legal counsel, Mayer Brown, to the Subcommittee, PSI-Chevy_Chase-CL000004; 1/30/06 internal Chevy 

Chase Trust memorandum, JD_000208-10. 

1165 9/5/08 letter from Chevy Chase Bank’s legal counsel, Mayer Brown, to the Subcommittee, PSI-Chevy_Chase06-0003. 

1166 Id. 
209 

Given the business practices that existed in Nigeria over this timeframe, the ability of the 

[Chevy Chase] Trust company to determine that his wealth was achieved through legal 

means is suspect.”1167

On January 20, 2006, Chevy Chase sent a letter to Ms. Douglas’ legal counsel, Edward 

Weidenfeld, resigning from the trust. The letter stated: “It is with sincere regret that I advise 

you, as we discussed on the phone this morning, that we must resign as Trustee of the JDA 

Family Trust. As I discussed the new regulatory obligations imposed on the Bank by the federal 

government are so onerous that the Bank has chosen not to continue the relationship.” The letter 

offered “a reasonable time to you to locate a successor and work with the successor to effect a 

smooth transition” 1168

Five months later, in May 2006, Chevy Chase Bank also became concerned about the 

Gede Foundation account. By then, the bank had made the connection between the Foundation 

and Ms. Douglas.1169 Chevy Chase Bank told the Subcommittee that one of the Trust 

Department’s compliance officers read news accounts of the FBI search of Congressman 

Jefferson’s home and offices, found a copy of the search warrant, and noticed that it referenced 

possible use of a charitable foundation in the wrongdoing: 

 

“While Chevy Chase Trust’s monthly monitoring continued to show no unusual activity in 

the JDA Family Trust accounts, the Trust Compliance Officer, through online searching was 

able to obtain a redacted copy of the search warrant. According to the search warrant, a 

confidential witness revealed that Representative Jefferson intended to funnel monetary 

bribes to the confidential witness, and ultimately to Nigerian officials through a charitable 

foundation. The Trust Compliance Officer became concerned that that [sic] the charitable 

foundation in question could have been the Gede Foundation and the JDA Family trust loan 

to Jennifer Douglas Abubakar could have been connected to the scheme. However, a review 

of account activity, monthly statements, and checks issued by the Gede Foundation showed 

no activity that indicated that the Gede Foundation was the recipient of the loan funds issued 

by the JDA Family Trust or that distributions were made from the Gede Foundation to 

Representative Jefferson or to other parties listed on the Subpoena. All disbursements and 

other transactions of $50,000 or more reflected in the JDA Trust Account records are 

associated with securities purchases or sales, or are consistent with Chevy Chase Trust’s role 

under the Trust agreement.”1170

Closing the Accounts. Chevy Chase told the Subcommittee that, even though the Gede 

Foundation account “did not trigger any alerts for unusual activity” and “had no indications of 

improper activity,” the bank decided to close the account in May 2007.1171 Mr. Weidenfeld told 

 

1167 1/30/06 internal Chevy Chase Trust memorandum, JD_004359. 1168 1/20/06 letter from Chevy Chase Bank to Mr. Weidenfeld, JD_000205. 

1169 Chevy Chase Bank told the Subcommittee that it did not make this connection until receiving a Subcommittee 

inquiry about both the Foundation and Ms. Douglas in 2007, but the 2006 bank documents show that at least some 

bank officials had made the connection a year earlier. 

1170 5/8/07 letter from Chevy Chase’s legal counsel to the Subcommittee, PSI-Chevy_Chase-000003-05. 1171 9/5/08 letter from Chevy Chase Bank’s legal counsel, Mayer Brown, to the Subcommittee, PSI-Chevy_Chase06-0004 
210 

the Subcommittee that he surmised the Gede Foundation account was closed due to its 

association with Ms. Douglas.1172

Chevy Chase told the Subcommittee that it tendered its resignation from the JDA Family 

Trust in January 2006, and intended to close the account soon after, but Mr. Weidenfeld had 

informed Chevy Chase that he was having a difficult time finding a replacement trustee.1173 

Mr. Weidenfeld told the Subcommittee that he contacted the following institutions which 

declined to take the trust: PNC Bank, Ashbridge Investments, J.P. Morgan Private Bank, 

Samson Capital in New York, Neville Rody and Shaw, and Papamarkou Asset Management in 

New York City, before finding a company that would take the trust.1174 An internal Chevy Chase 

email noted: “At least five foreign financial institutions with no presence in the United States 

have refused to take this business.”1175 Chevy Chase told the Subcommittee: “Under principles 

of trust law, Chevy Chase Trust had a duty to continue as the corporate trustee until a 

replacement trustee was found or Jennifer Douglas Abubakar and Francis Iwenjiora exercised 

their powers under the trust to remove Chevy Chase Trust.”1176

$500,000 Wire Transfer to Faibros Investments. More than a year and a half after 

Chevy Chase tendered its resignation from the JDA Family Trust and while the search for a new 

trustee continued, a JDA Family Trust request for a $500,000 wire transfer raised new concerns 

at the bank. In September 2007, the JDA Family Trust requested a wire transfer of $500,000 to 

Faibros Investments FZ-LLC in Dubai, one of the United Arab Emirates.1177 In a September 17, 

2007 letter to Ms. Douglas’ legal counsel, the Chevy Chase Trust Company declined to complete 

the wire transfer. The Trust Company wrote: 

“[O]ur primary business is the investment management of individual’s wealth. We do have 

trust powers and serve as a fiduciary primarily for our clients for whom we manage their 

investments. In a few limited circumstances we serve as directed trustee where another 

entity, well known to us, is the investment manager.”1178 

 

1172 11/13/09 letter from Mr. Weidenfeld’s legal counsel, London & Mead, to the Subcommittee, PSIAbubakar_&_Weidenfeld-01-0030 

1173 9/5/08 letter from Chevy Chase’s legal counsel to the Subcommittee, PSI-Chevy_Chase-06-0001-07, at 05. 

Mr. Weidenfeld’s legal counsel also told the Subcommittee: “With the Citibank account closing, a replacement 

facility was urgently required. At approximately the same time, Chevy Chase Bank gave notice it would no longer 

serve as trustee for the Jennifer Douglas Family Trust (‘the JDA trust’), and the money manager for the JDA trust 

announced their intention to resign. The Abubakars requested that Mr. Weidenfeld find a new money manager, as 

well as a new trustee to replace Chevy Chase.” 11/13/09 letter from Mr. Weidenfeld’s legal counsel, London & 

Mead, to the Subcommittee, PSI-Abubakar_&_Weidenfeld-01-0023. 

1174 11/13/09 letter from Mr. Weidenfeld’s legal counsel, London & Mead, to the Subcommittee, PSIAbubakar_&_Weidenfeld-01-0024. 

1175 11/29/07 email among Chevy Chase officials, JD_005785-86. 1176 9/5/08 letter from Chevy Chase’s legal counsel to the Subcommittee, PSI-Chevy_Chase-06-0005; see also 

5/8/07 letter from Chevy Chase’s legal counsel to the Subcommittee, PSI-Chevy_Chase-CL000004; 10/10/00 JDA 

Family Trust instrument, JD_000012. 

1177 See JD_005474-75 for letter from Francis Iwonjora and Jennifer Ms. Douglas Abubakar requesting that 

$500,000 be transferred from the trust to Fabros Investments FZ LLC in Dubai UAE. Iwonjora is Douglas’ brother. 

11/13/09 letter from Mr. Weidenfeld’s legal counsel, London & Mead, to the Subcommittee, PSIAbubakar_&_Weidenfeld -01-0019. 

1178 9/14/07 letter from Chevy Chase Bank to Mr. Weidenfeld, JD_005476-77. 
211 

In response, on September 18, 2007, Ms. Douglas and her brother, Mr. Iwenjiora, sent a 

letter to Chevy Chase removing it as trustee, appointing Mr. Iwenjiora as the sole trustee, and 

authorizing the $500,000 transfer to Faibros Investments.1179 An internal email shows that 

Chevy Chase personnel considered the transfer suspicious: 

“a) The investment is to an offshore investment with no public information available, and b) 

The investment appears to be inconsistent with the purpose of the trust. The trust is designed 

to be a nest-egg to protect an American citizen and her children. To have an illiquid, 

offshore investment that makes up approximately 7% of the trust would be unusual for a 

relationship this size and it is not consistent with the prior history of this relationship.”1180

Despite these concerns, on September 27, 2007, Chevy Chase wire transferred the $500,000 to 

Faibros Investments and continued to maintain the trust account.1181 

When asked about this transfer, Ms. Douglas told the Subcommittee through legal 

counsel that she was the beneficial owner of Faibros Investments, that the company had been 

created to invest in property, and the $500,000 transfer was to fund an investment.1182 

Mr. Weidenfeld’s legal counsel told the Subcommittee that “he understood that the transfer was 

for the purpose of funding an investment, and he believes, though he is not certain, that he 

understood that the investment was in Dubai. In general, he recalls strongly urging Chevy Chase 

to make the transfer because he believed Mrs. Abubakar was being unfairly treated as a result of 

the Jefferson investigation.”1183 The Subcommittee understands that Ms. Douglas now resides 

primarily in Sharjah, a UAE emirate adjoining Dubai, where she works as a professor at 

American University of Sharjah. 

Six months later, in May of 2008, Lynx Investment Services in Washington D.C. 

apparently agreed to serve as a trustee of the JDA Family Trust.1184 In June 2008, the JDA 

Family Trust was transferred to Fidelity Investments.1185 Chevy Chase told the Subcommittee 

that, at the time of transfer, the $400,000 loan made four years earlier, in 2004, had still not been 

repaid.1186 

(3) Wachovia Bank 

After Chevy Chase Bank and Chevy Chase Trust Company indicated, in January 2006 

and mid-2007, that they would close the JDA Family Trust and Gede Foundation accounts and, 

in the summer of 2007, Citibank indicated it would close all of its Douglas-related accounts, Ms. 

Douglas used the assistance of her legal counsel, Mr. Weidenfeld, to open six new accounts at 

 

1179 9/18/07 letter from Ms. Douglas and Mr. Iwonjora to Chevy Chase Bank, JD_005483-84. 1180 9/25/07 internal Chevy Chase Bank email, JD_005703-06. 1181 9/27/07 email from Chevy Chase Bank to Mr. Weidenfeld, JD_005471, and 9/20/07 email from Chevy Chase 

Bank to Mr. Weidenfeld, JD_005473. 

1182 11/13/09 letter from Mr. Weidenfeld’s legal counsel, London & Mead, to the Subcommittee, PSIAbubakar_&_Weidenfeld-01-0019. 

1183 Id., at 29. 1184 Id., at 23. 1185 Subcommittee interview of Chevy Chase Bank officials, July 18, 2008. See also PSI-Chevy_Chase-06-0005. 1186 Subcommittee interview of Chevy Chase Bank officials, July 18, 2008. 
212 

Wachovia Bank in Potomac, Maryland. She went to Wachovia Bank in part because American 

University was a longstanding client at the bank, and Mr. Weidenfeld was well known to bank 

officials and willing to speak on her behalf. In July 2007, Ms. Douglas was able to open two 

personal checking accounts, two checking accounts for the Gede Foundation, one checking 

account for AUN, and a personal money market account. 

Wachovia opened all of the Douglas-related accounts without designating her as a PEP 

client, even though Mr. Weidenfeld had described her husband as the recent vice president of 

Nigeria, and the bank itself had conducted multiple PEP screenings. Over a seven-month period 

from July 2007 to February 2008, Ms. Douglas used the Wachovia accounts to bring $4.2 million 

in suspect funds into the United States from the same offshore corporations that caused her 

accounts to be closed at Citibank. The Guernsey Trust Company, for example, wire transferred 

$2.4 million into Ms. Douglas’ personal checking account at Wachovia, while LetsGo wire 

transferred $1.8 million into the AUN account at Wachovia. After detecting the wire transfers, 

raising concerns about the source of the funds, and concluding that the accounts were involved in 

suspicious transactions, Wachovia closed the accounts seven months after they were opened. 

Weidenfeld Assistance. Mr. Weidenfeld, made the initial contact with Wachovia Bank 

regarding opening accounts for Ms. Douglas. In early May, he telephoned the head of 

Wachovia DC Wealth Management office and informed him that Ms. Douglas was seeking to 

open accounts at the bank.1187 Notes taken by the DC wealth manager regarding the 

conversation show that Mr. Weidenfeld explicitly disclosed that Ms. Douglas was married to 

Atiku Abubakar, who was then in the process of leaving office as Vice President of Nigeria.1188 

The notes also contain a reference to “money in the freezer.” The Wachovia DC wealth manager 

indicated that he did not recall why he wrote that phrase,1189 but it suggests that Mr. Weidenfeld 

discussed the ongoing criminal investigation of Congressman Jefferson, news reports indicating 

that cash had been found in his freezer, and news reports linking the Congressman to 

Mr. Abubakar and his wife. In addition, the notes indicate that Mr. Weidenfeld told the bank 

that Ms. Douglas would like to open an account for her family trust and move the trust’s assets, 

then about $7 million, from Chevy Chase Bank to Wachovia. 

After the conversation, Mr. Weidenfeld sent a letter to Wachovia on behalf of Ms. 

Douglas, attesting to her character and recommending that Wachovia open accounts for her.1190 

Mr. Weidenfeld wrote: “Mrs. Abubakar received her doctorate degree from American 

University two weeks ago and has received a fellowship at AU for the fall. She is a United 

States citizen married to a non-resident named Atiku Abubakar. Atiku Abubakar is also a friend. 

Until last month he was the Vice President of Nigeria.”1191

Account Opening. Soon after speaking with Mr. Weidenfeld, the Wachovia DC wealth 

manager initiated the process of opening an account for Ms. Douglas. He assigned to an 

 

1187 Subcommittee interview of Wachovia officials, September 8, 2008; 6/8/07 email from Mr. Weidenfeld to 

Wachovia, JD-A-00026. 1188 Subcommittee interview of Wachovia officials, September 8, 2008. 

1189 Id. 

1190 6/8/07 letter from Mr. Weidenfeld to Wachovia, JD-A-00026-27.

1191 Id. 
213 

assistant the task of entering her information into the Wachovia record keeping system. He also 

contacted a Wachovia compliance officer about the account, relayed the fact that Ms. Douglas 

was married to former Vice-President Abubakar, and asked whether Wachovia would be able to 

open the account.1192 He indicated that the compliance officer said she was unsure and would 

look into it. The compliance officer confirmed that she spoke with the DC wealth manager 

regarding whether or not the account should be opened, but undertook no additional due 

diligence prior to the opening of the account.1193 

Although Mr. Weidenfeld told the bank orally and in writing that Ms. Douglas was 

married to the former vice president of Nigeria, the bank did not classify her as a PEP client in 

the account opening documentation. According to Wachovia, the DC wealth manager claimed 

that he had informed his assistant about her marriage to Mr. Abubakar, while the assistant 

claimed that he did not recall being told of any connection between Ms. Douglas and 

Mr. Abubakar.1194 When completing the account opening documentation, the assistant checked 

“none of the above” in the PEP profile portion of the form, and checked “Medium Priority” 

rather than “High Risk” in the Risk Assessment portion of the form.1195 Wachovia told the 

Subcommittee that the assistant should have entered Ms. Douglas into its system as a PEP 

client.1196

Once the account opening forms were completed, the next step in the process was for 

Wachovia to conduct a due diligence review of Ms. Douglas. According to Wachovia, the 

Wealth Management Group employed a third party vendor, CDC, to perform due diligence 

reviews of all its prospective clients. Among other steps, CDC screens potential clients against a 

Factiva database, which includes a list of political figures, to determine whether or not a 

potential customer is a PEP or PEP associate. On May 7, 2007, the assistant completed a 

Request for Enhanced Due Diligence form for Ms. Douglas,1197 and CDC crosschecked her name 

against the Factiva database, but failed to identify her as a PEP. 

Wachovia told the Subcommittee that when it later asked CDC why it had failed to 

identify Ms. Douglas as a PEP, CDC indicated that it had been identifying individuals as PEPs 

only if an individual was the primary focus of a press article, and Ms. Douglas had not met that 

criterion.1198 As a result of the Douglas incident, Wachovia told the Subcommittee that CDC had 

changed its policy and is now identifying individuals as PEPs even if an individual is not the 

primary focus but is mentioned in a press article. In addition, according to Wachovia, CDC did 

not conduct a search for negative press articles with regard to Ms. Douglas when it performed its 

due diligence review and so did not find the articles linking her to the investigation of 

 

1192 Subcommittee interview Wachovia officials, September 8, 2008. 

1193 Undated JDA Family Trust Documentation, JD_000001. 

1194 Subcommittee interview of Wachovia officials, September 8, 2008. 

1195 Contacts Rolodex screen, JD-A-00013. 

1196 Wachovia told the Subcommittee that, as a result of Ms. Douglas not being initially identified as a PEP by the 

Wachovia Wealth Management Group, the DC wealth manager was held responsible for the actions of the DC 

Wealth Management office, received a written warning, lost his position as head of the office, and may be penalized 

monetarily. Wachovia also reported that DC Wealth Management office personnel would be given additional 

training. Subcommittee interview of Wachovia officials, September 8, 2008. 

1197 5/07/07 Wachovia Request for Enhanced Due Diligence, JD-A-00016. 

1198 Subcommittee interview of Wachovia officials, September 8, 2008. 
214 

Congressman Jefferson. Wachovia told the Subcommittee that problem had been corrected, and 

such a search was now done on a routine basis for all clients undergoing a CDC due diligence 

review. 

Personal Checking Accounts. On May 11, 2007, Ms. Douglas met in person with the 

DC wealth manager at a Wachovia branch in Potomac, Maryland.1199 According to Wachovia, 

she indicated interest in opening several accounts, including a personal checking account, an 

account for a family trust with $3 to $6 million in assets, and a checking account for the Gede 

Foundation. 

As a first step, in accordance with Ms. Douglas’ request, Wachovia opened a personal 

checking account for her on that day, May 11, 2007, Account No. 1010122288618.1200 

Wachovia opened a second personal checking account for her a few days later on May 14, 2007, 

Account No. 1010122288621.1201 Both accounts were opened through the General Bank Group 

(GBG) at Wachovia, which handles checking and savings accounts, rather than the Wealth 

Management Group which handles trust accounts. 

When it opened the two accounts, the General Bank Group conducted an additional due 

diligence review of Ms. Douglas. It required Ms. Douglas to complete account opening 

documentation in which she described her employment as “housewife.”1202 The documentation 

did not identify her as a PEP client. Wachovia told the Subcommittee that the DC wealth 

manager claimed he had told the Potomac branch regional manager that Ms. Douglas was 

married to Mr. Abubakar, but the bank was unable to confirm that claim because the manager 

had left the bank.1203 GBG also routinely subjected new accounts to a third party vendor, 

Bridger Insight, which screened client names against a Bridger Insight database that included 

FBI, CIA, and Interpol lists of foreign officials, but not lists of foreign officials’ family 

members.1204 That screening, like the Factiva screening by the DC Wealth Management office, 

failed to identify Ms. Douglas as a PEP. Her checking accounts were thus not subjected to any 

enhanced monitoring. 

Ms. Douglas funded the first checking account with an initial cash deposit of $100.1205 

She opened the second with a zero balance and, two weeks later, deposited a Citibank cashiers 

check with the funds from several of her closed Citibank accounts totaling nearly $182,000.1206 

Over the next seven months, the Guernsey Trust Company wire transferred about $1.8 million 

into the first personal checking account.1207

 

1199 Id. 1200 5/11/07 Wachovia Customer Access Agreement, GF-F-00026. 1201 See 5/14/07-6/07/07 Wachovia Account Statement, JD-D-00022. 1202 Contacts Rolodex screen, JD-A-00013. 1203 Subcommittee interview of Wachovia officials, September 8, 2008. 1204 Id. 1205 5/11/07-6/11/07 Wachovia Account Statement, JD-D-00001. 1206 See 5/14/07-6/07/07 Wachovia Account Statement, JD-D-00022; copy of Citibank Official Check deposited into 

Douglas account on June 1, 2007, JD-F-00082. 

1207 See below for a chart that details these wire transfers. 
215 

Gede Foundation. A month after opening her personal checking accounts, on June 11, 

2007, Ms. Douglas opened two checking accounts in the name of the Gede Foundation with the 

DC Wachovia Wealth Management office. The first was designated Gede Foundation Expense 

Account No. 2000024527130, and the second as Gede Foundation Donation Account No. 

2000024527143.1208 

On the account opening documentation, Ms. Douglas was listed as the President, Cynthia 

J. Ticao was listed as the Executive Director, and Yoku Shaw-Taylor was listed as the 

Director.1209 These three individuals were also signatories for the account.1210 A 2007 Wachovia 

know-your-customer form estimated that the Gede Foundation then had total assets of $5 to $10 

million, which came from “tax deductible contributions from individuals and businesses as well 

as corporate grants.” It also stated that the account’s initial funding came from a Gede 

Foundation account at Citibank.1211

On June 5, 2007, prior to opening the account, Wachovia’s DC Wealth Management 

office submitted an Enhanced Due Diligence request to its third party vendor, CDC, for the Gede 

Foundation.1212 The CDC crosschecked the names of the three signatories against its Factiva 

database but, once again, did not identify any as a PEP and did not report any negative news with 

regard to any of the three individuals or the Gede Foundation itself.1213 

Wachovia opened the two checking accounts, and, on June 11, 2007, Ms. Douglas funded 

both accounts primarily using a Citibank cashiers check for $66,800.45, which deposited funds 

from the closed Gede Foundation account at Citibank. She deposited about $56,000 into the 

Expense Account and about $13,000 into the Donation Account.1214 

AUN Account. A month after opening the Gede Foundation accounts, on July 23, 2007, 

Ms. Douglas opened a fifth account at Wachovia, this one in the name of the American 

University of Nigeria (AUN), Checking Account No. 2000028808282.1215 The account opening 

documentation listed two signatories: Ms. Douglas Abubakar and Edward Weidenfeld. The 

account address was that of the Weidenfeld law firm.1216 By this point, Mr. Weidenfeld was 

providing legal representation to AUN as well as the Abubakars.1217 

 

1208 See 6/11/07-6/29/07Gede Foundation Expense Account summary, GF-D-00001; 6/11/07-6/29/07 Gede 

Foundation Donation Account summary, GF-D-00017. 

1209 6/1/07 Wachovia Deposit Account Application, GF-F-00054. 1210 6/1/07 Wachovia Depository Authorization and Agreement Certificate, GF A 00040. 1211 Undated Wachovia form entitled, “Contact Source of Wealth,” GF-A-00005. 1212 6/5/07 Request for Enhanced Due Diligence on Gede Foundation, GF-F-00282-85. 1213 6/6/07 Gede Foundation Enhanced Due Diligence results, GF-A-00008 (no negative news reported); 6/6/07 

Gede Foundation EDD results for all associated contacts (Jennifer Douglas, Yoku Shaw-Taylor, Cynthia Ticao), 

GF-A-00042-44, (no PEP identified, no negative news). 

1214 See copy of Citibank Original Check, GF-A-00041; 6/11/07-6/29/07 Gede Foundation Expense Account 

summary, GF-D-00001; 6/11/07-6/29/07 Gede Foundation Donation Account summary, GF-D-00017. 

1215 AUN Account Opening Application, JD-F-00426. 1216 7/25/07 Wachovia Deposit Account Application, JD-F-00426. 1217 See 11/13/09 letter from Weidenfeld legal counsel to Subcommittee; 8/12/08 letter from American University to 

the Subcommittee, no bates. Mr. Weidenfeld also provided Wachovia with a copy of a June 2007 resolution by the 

AUN board of directors authorizing AUN to open a U.S. checking account, and authorizing Mr. Weidenfeld to act 

as a signatory on that account when directed to act by an officer or director of AUN in writing. See also June 2007 
216 

Prior to opening the account, Wachovia obtained information on both AUN and how the 

account would be used. A Wachovia banker, in an internal document, gave the following 

“business reason” for opening the account: 

“AU of Nigeria is affiliated through a management consultancy contract to American 

University in Washington DC[,] a long time client of Wachovia. AU/US provides 

curriculum[,] professors and senior management staff to AUN through the contract. The 

purpose of the account at Wachovia is for payment of salaries for AU professors who are 

US citizens, teaching at AUN. AUN is represented in the US by Ed Weidenfeld, a 

respected DC attorney, and a person well known to the bank.” 1218 

On July 5, 2007, the DC wealth manager wrote to Mr. Weidenfeld requesting 

documentation to support the new AUN account: “Our compliance department is requesting a 

copy of the management consultancy agreement between American University, US, and ABTI 

American University of Nigeria.”1219 Mr. Weidenfeld provided the agreement which showed 

that, as of December 2003, AUN had entered into a five-year licensing agreement with American 

University, under which AU agreed to provide professionals to AUN and advise AUN on 

establishing AUN’s academic and administrative infrastructure.1220 On July 10, 2007, American 

University sent a letter to the Director of the Wachovia GBG International & High Risk 

Customer Governance, stating: “You asked how much funding is likely to pass through the AUN 

account. At the current moment, the amount is roughly $200,000 per month, largely for the 

salaries of expatriates who are teaching or working at AUN, or $2.4 million per year, but I can 

anticipate that it might rise to $250,000 per month or roughly $3 million per year.”1221 On July 

11, 2007, the Wachovia Director responded: “Wachovia will move forward with underwriting 

for ABTI-American University of Nigeria’s requested deposit account. Please note that because 

of Bank Secrecy Act and USA Patriot Act obligations for which the bank is subject, account[s] 

owned by offshore entities must be underwritten prior to establishment. However, that process 

has now commenced.”1222 

Wachovia told the Subcommittee that, generally, it does not open accounts for foreign 

charitable organizations or foreign governmental entities, but has a process whereby an 

exception can be made if approved by the Wachovia exception committee.1223 Wachovia told 

the Subcommittee that, in this case, its exception committee granted an exception for AUN, in 

part due to Wachovia’s banking relationship with American University. 

The Wachovia Deposit Account Underwriting International (DAU) group actually 

opened and handled the AUN account. Prior to opening the account, DAU asked CDC to 

perform a due diligence review of AUN, Ms. Douglas, and Mr. Weidenfeld. As in previous 

 Consent of the Board of Directors of the American University of Nigeria, JD-F-00433; Authority to be Signatory 

between AUN and Mr. Weidenfeld, JD-F-00434. 

1218 6/26/07 internal Wachovia document, JD-F-00439.

1219 7/5/07 email from Wachovia to Mr. Weidenfeld, PAU024525. 1220 3/31/03 Management Consultancy Agreement between AUN and American University. Washington D.C., 

PAU030660-72. 

1221 7/10/07 email from American University to Wachovia, PAU024453. 1222 7/11/07 email from Wachovia to American University, PAU024470. 1223 Subcommittee interview of Wachovia officials, September 8, 2008. 
217 

screenings, CDC’s August 21, 2007 screening did not identify Ms. Douglas or Mr. Weidenfeld 

as a PEP client. Wachovia told the Subcommittee that it also spoke with CDC about this 

incident, and CDC has taken steps to strengthen its PEP screenings. 

 

The AUN account was opened on July 23, 2007, and immediately began receiving and 

disbursing funds. Over the next few months, the Guernsey Trust Company wire transferred a 

total of about $1.8 million into the AUN account.1224 

Money Market Account. A month after opening the AUN account, on August 21, 2007, 

Ms. Douglas opened a sixth and final account at Wachovia, this time a Personal High 

Performance Money Market Account No. 1010185917340.1225 She initially funded the account 

by transferring $20,000 from her second personal checking account at Wachovia.1226 This 

account saw little activity before all six Douglas-related accounts were closed. 

Account Activity. Soon after opening the Wachovia accounts, Ms. Douglas began 

receiving substantial wire transfers from two offshore corporations, LetsGo and the Guernsey 

Trust Company, sent primarily through accounts at a small private bank in Switzerland called 

Wegelin & Co. Over a six-month period, the Guernsey Trust Company wire transfers sent $2.45 

million to her personal checking account, while the LetsGo wire transfers sent $1.8 million to the 

AUN account. 

The following chart lists the Guernsey Trust Company wire transfers to Ms. Douglas’ 

first personal checking account at Wachovia, Account No. 1010122288618, totaling $2.45 

million. 

Wire Transfers from Guernsey Trust Company to

Douglas Personal Checking Account at Wachovia:  1010122288618

Date Amount Originator Bates

7/5/07 $300,000 Wegelin & Co., Private Bankers, Switzerland JD‐D‐00004

7/10/07 $350,000 Wegelin & Co., Private Bankers, Switzerland   JD‐D‐00004

7/26/07 $300,000 Wegelin & Co., Private Bankers, Switzerland   JD‐D‐00008

9/4/07 $300,000 Wegelin & Co., Private Bankers, Switzerland   JD‐D‐00013

9/27/07 $300,000 Wegelin & Co., Private Bankers, Switzerland   JD‐D‐00017

10/29/07 $300,000 Wegelin & Co., Private Bankers, Switzerland   JD‐D‐00059

12/3/07 $300,000 Wegelin & Co., Private Bankers, Switzerland   JD‐D‐00074

12/21/07 $300,000 Wegelin & Co., Private Bankers, Switzerland   JD‐D‐00074

TOTAL: $2,450,000 SOURCE: UBS

Chart prepared by Subcommittee

Over the same six-month period, LetsGo Ltd. wire transferred $300,000 every few 

months into the AUN account at Wachovia for a total of $2 million. These wire transfers also 

came from a Swiss bank account. This chart shows the key wire transfers. 

 

1224 See below for a chart detailing these wire transfers. 1225 Undated internal Wachovia document “Jennifer Douglas Abubakar: Summary of Account Relationships,” PSIWachovia-08-0001. 

1226 Id. 
218 

Wire Transfers from LetsGo Ltd. to  

AUN Account at Wachovia:  2000028808282

Date Amount Originator Bates

7/26/07 $300,000 Wegelin & Co., Private Bankers, Switzerland JD‐D‐00040

9/4/07 $300,000 Wegelin & Co., Private Bankers, Switzerland JD‐D‐00051

9/27/07 $200,000 Wegelin & Co., Private Bankers, Switzerland JD‐D‐00051

10/29/07 $300,000 Wegelin & Co., Private Bankers, Switzerland JD‐D‐00059

12/3/07 $300,000 Wegelin & Co., Private Bankers, Switzerland JD‐D‐00074

12/21/07 $300,000 Wegelin & Co., Private Bankers, Switzerland JD‐D‐00074

1/22/08 $300,000 Wegelin & Co., Private Bankers, Switzerland JD‐D‐00081

TOTAL: $2,000,000 SOURCE: Wachovia

Chart prepared by Subcommittee  

During the six months the Wachovia accounts were open, Ms. Douglas used the $2.45 

million sent to her personal checking account to pay for living expenses, including large credit 

card bills. In addition, she transferred about $73,000 to AUN accounts at other banks. This 

chart lists the transfers she made to AUN accounts. 

Wire transfers from Wachovia Douglas Account No. 1010122288618

to AUN Accounts

Date Amount Bates

7/30/07   $13,029.50 sent to AUN account at

Platinum Habib Bank Ltd. JD‐D‐00010

8/7/07        $26,244.20 sent to AUN account at

Platinum Habib Bank Ltd. JD‐D‐00010

8/29/07     $26,244.20 sent to AUN account at

Zenith International Bank Ltd.

JD‐D‐00014;

JD‐F‐00076‐77

10/31/07    $8,185.50 sent to AUN account at

Guaranty Trust Bank JD‐F‐00256‐257

TOTAL: $73,713.40 SOURCE: Wachovia

     Chart prepared by Subcommittee

Account Concerns. By September of 2007, Wachovia began to have concerns about the 

Douglas-related accounts. On September 5, 2007, a Wachovia banker filed a “suspicious 

internal referral” report concerning a $9,500 check drawn on Ms. Douglas’ personal checking 

account which was presented for payment by an individual without signatory authority on the 

account.1227 The banker wrote: “A non customer [redacted by the Subcommittee] presented a 

check to negotiate at the Pine Crest financial CTR. I reviewed our customer’s account and [there 

are] frequent transfers between her three accounts that [were] opened four months ago. Also 

large auto debits to Neiman Marcus and American Express along with wires in and out. Most 

recent for 300K from Nigeria.”1228 

In response to the suspicious internal referral report, a senior anti-money laundering 

(AML) investigator at Wachovia was assigned to examine the Douglas accounts. The AML 

investigator examined account activity involving Ms. Douglas’ personal checking accounts and 

 

1227 9/5/07 check for $9,500 made out to individual by Ms. Douglas, JD-F-00053. 1228 9/5/07 Suspicious Internal Referral filed by Coralett James, JD-F-00005. 
219 

the AUN account, but not the Gede accounts. He determined that some of the account activity 

appeared suspicious. With regard to Ms. Douglas’ first personal checking account, he wrote: 

“[A] review of DDA#1010122288618 between dates of 07/01/07-10/11/07 revealed this 

account was opened on 05112007. The account is funded by wire transfers and account 

transfers. There were seven account transfers observed between August and September 

that ranged in amounts from $19,000 to $50,000. Four of those transfers were during the 

month of August (DDA#8621-totaling $190,000)[.] During this review period there were 

seven wire transfers credited to this account ranging in amounts from $13,029.50 to 

$300,000. It was also observed that five of seven wires were sent from Guernsey Trust 

Company out of Nigeria (High Risk Country).”1229 

On October 11, 2007, the AML investigator contacted Ms. Douglas to obtain more 

information about the source of the funds in her accounts, and wrote the following: 

“I spoke with Jennifer E Douglas who advised she receives monthly wires in the amounts 

of $300,000 from her husband. She said those funds were generated from his business, 

Oil Logistics, in Nigeria [Guernsey Trust Company Nigeria] Jennifer said during the 

month of July her husband was in the process of opening a new account for the American 

University of Nigeria. She said there were two $300,000 wires posted to her account to 

hold until the University establishes a Wachovia account. She referred [me to] the 

attorney over the University’s account for further information [Edward Weidenfeld]. All 

outgoing funds were used to pay professors/instructors, school tuitions, and other living 

expenses. Jennifer also stated that wired funds in the amount of $26,224.20 and 

$100,0001230 that were sent to Dubai Islamic Bank Limited were used for the purchase of 

a home in Dubai.”1231 

The AML investigator conducted additional research into the Guernsey Trust Company, 

LetsGo, and Oil Logistics. He described LetsGo as located in a “high risk country-Panama,”1232

but said he was unable to find additional information about any of the three companies. He 

wrote: “The profile of the customer in question does not appear to substantiate the aggregated 

fund transfers wired in and out of the account.”1233 

In addition, on November, 6, 2007, a Wealth Management Group compliance officer 

wrote to the Group’s regional supervisor as follows: 

“Hi, need your assistance. Please order the last 3 months of banks statements for the 

DDAs (5 total) in the names of Jennifer E. Douglas RRN 069695366 and Gede 

Foundation RRN 054721695. Send those to me along with a copy of the KYC file for 

 

1229Wachovia internal review document, JD-F-00006. 1230 See transfer summary of Douglas checking account #1010122288618, JD-F-00034, showing two wire transfers 

sent to Dubai Islamic Bank Limited for the purchase of a home in Dubai; 10/09/07 wire transfer form, JD-F-00066-

67. 

1231 9/5/07 Suspicious Internal Referral filed by Coralett James, JD-F-00007. 1232 Id. 1233 Id. 
220 

Gede. This request comes from the Corporate AML office so I would appreciate your 

immediate attention.”1234

In November 2007, Wachovia received an inquiry from the Subcommittee regarding Ms. 

Douglas, Mr. Abubakar, and related entities. In response, on November 14, 2007, a Wachovia 

AML investigator began examining the Douglas-related accounts. He examined all six accounts, 

and reviewed the materials from the earlier AML investigator. This AML investigator quickly 

identified Ms. Douglas as a PEP and found several negative news articles about her. On 

November 19, 2007, six months after her first Wachovia account was opened, Ms. Douglas was 

officially added to the Wachovia PEP list. Mr. Weidenfeld was classified as a PEP Associate, 

and AUN was classified as a PEP Entity.

1235

The AML investigator again looked at the offshore corporations sending funds to the 

Douglas-related accounts. He found that the LetsGo website was “under construction.”1236 He 

also compared AUN wire transfers naming specific AUN faculty members to an AUN payroll 

ledger, and found that the two contained corresponding amounts, but was unable to confirm that 

the payments were actually salary-related.1237 

In December 2007, the AML investigator recommended closing the Douglas-related 

accounts due to the large volume of offshore transactions, discovery of negative news regarding 

Ms. Douglas, the Subcommittee’s investigation, and Ms. Douglas’ identification as a PEP. 

Wachovia told the Subcommittee there were no objections to that recommendation, and 

Wachovia decided to close all six Douglas-related accounts, even though it did not identify 

account activity that showed a definite Bank Secrecy Act violation. 

Closing the Accounts. On December 14, 2007, Wachovia notified Mr. Weidenfeld that 

the Douglas-related accounts would be closed.1238 On January 3, 2008, Mr. Weidenfeld 

telephoned the bank and asked whether the accounts were being closed based upon Ms. Douglas’ 

husband or due to money laundering activities. Wachovia informed him that the bank had “made 

a business decision” to exit the relationship and that all accounts would be closed by January 

28th.1239 Wachovia notes indicate that Mr. Weidenfeld stated that, with respect to the AUN 

account, Ms. Douglas “was willing to remove her name from this account if there was the 

possibility of it being left open.”1240 The bank indicated that the account would not be kept open 

even without her name. 

 

1234 11/06/07 internal Wachovia email, GF-A-00078-79. 1235 11/19/07 internal Wachovia document, JD-F-00543-44. 1236 Email screenshot of AML investigator’s 12/10/07 internet search results for LetsGo Limited, Inc., JD-F-00468-

69. 

1237 See undated Wachovia transaction record, JD-F-00440-43; 9/28/07 Wachovia Wire Detail Page, JD-F-00128. 1238 See also December 14, 2007 letter from Wachovia to AUN advising that account 2000028808282 will be 

closed, JD-F-00452. 

1239 11/19/07 internal Wachovia report, JD-F-00543-44. The Stassi investigation report cites explanation of account 

closure as well as screening results. 

1240 Id. See also 11/13/09 letter from Mr. Weidenfeld’s legal counsel, London & Mead, to the Subcommittee , PSIAbubakar_&_Weidenfeld-01-0024 (Mr. Weidenfeld told the Subcommittee that he “does not have a specific 

recollection of suggesting that Mrs. Abubakar could be removed as a signatory on this account. If he made that 

suggestion, he believes that he would have done so because he thought that her signatory authority created an issue 

for the bank as a result of her unfair association with the Congressman Jefferson investigation. It would have been 
221 

Mr. Weidenfeld told the Subcommittee that he believed the Wachovia accounts were 

closed, “because of their association with the Abubakars, and because the AUN accounts were 

transferring money abroad to accounts in the names of foreigners. ... The unfair allegations 

against the Abubakars from the Congressman Jefferson investigation, coupled with 

Mr. Abubakar's status as a Nigerian politician, caused the banks to close the accounts.”1241

On January 31, 2008, the AUN and Gede Foundation accounts were closed. Wachovia 

provided AUN with a check for the remaining balance, and that check was later deposited into 

the Weidenfeld law firm account at Suntrust Bank.1242 Wachovia provided a second check with 

the balance from the two Gede Foundation accounts, and that check was later deposited into a 

new Gede account at Eagle Bank.1243 On February 7, 2008, Ms. Douglas’ second personal 

checking account was closed with no balance owing. On February 11, 2008, her initial personal 

checking account was closed, and Wachovia provided a check with the remaining balance, which 

was mailed to Mr. Weidenfeld and later deposited into an account at PNC Bank.1244 On 

February 20, 2008, Ms. Douglas’ money market account was closed with a zero balance. 

(4) Eagle Bank 

Ms. Douglas did not wait for her accounts at Chevy Chase and Wachovia to close before 

opening another account at another U.S. bank. In July 2008, she opened a personal checking 

account at Eagle Bank; in 2009, she opened two more accounts: a money market account and a 

home equity line.1245 Eagle Bank is a small state-chartered bank in Maryland with 14 offices in 

the Washington area. It caters to embassy accounts and promotes its international banking 

capability. 

Soon after opening the initial account, as at prior banks, Ms. Douglas began to receive 

large wire transfers from offshore accounts belonging to the Guernsey Trust Company. Most of 

these wire transfers were for $100,000. Within one year, from October 2008 to September 2009, 

Ms. Douglas brought over $1 million in suspect funds into the United States from the Guernsey 

Trust Company. She also received about $189,000 in wire transfers from her brother, Francis 

Iwenjiora. 

 logical for Mr. Weidenfeld to believe that because the account was maintained for the benefit of AUN, Jennifer did 

not have to be a signatory on the account, and that if her name was removed, the bank might retain the account.) 1241 11/13/09 letter from Mr. Weidenfeld’s legal counsel, London & Mead, to the Subcommittee, PSIAbubakar_&_Weidenfeld-01-0025. 

1242 Copy of the official check issued to American University of Nigeria in the amount of $33,570.90, dated 2/1/08, 

JD-A-00275. 

1243 Copy of the official check issued to Gede Foundation in the amount of $3616.07, dated 1/11/08, GF-A-00085. 1244 Copy of the official check issued to Jennifer Douglas in the amount of $4036.78, dated 2/1/08, JD-A-00033. 1245 Information provided by Ms. Douglas’ legal counsel, January 18, 2010. 
222 

This chart lists the key wire transfers into Ms. Douglas’ account at Eagle Bank over the past 

year, which together exceed $1.2 million. 

Select Wire Transfers into Douglas Account at Eagle Bank

Date Amount Sender Bates

10/10/2008 $   99,950.00 Guernsey Trust Company, Nigeria PSI‐JDA‐000009

11/03/2008 $   99,950.00 Guernsey Trust Company, Nigeria PSI‐JDA‐000012

12/1/2008 $ 100,000.00 Guernsey Trust Company, Nigeria PSI‐JDA‐000014

12/19/2008 $ 100,000.00 Guernsey Trust Company, Nigeria PSI‐JDA‐000017

1/30/2009 $ 100,000.00 Guernsey Trust Company, Nigeria PSI‐JDA‐000020

3/3/2009 $   99,950.00 Guernsey Trust Company, Nigeria PSI‐JDA‐000024

4/1/2009 $   99,950.00 Guernsey Trust Company, Nigeria PSI‐JDA‐000027

5/1/2009 $   99,950.00 Guernsey Trust Company, Nigeria PSI‐JDA‐000029

5/22/2009 $ 161,000.00 Francis Iwenjiora Trustee PSI‐JDA‐000032

5/28/2009 $   28,000.00 Francis Iwenjiora Trustee PSI‐JDA‐000033

8/4/2009 $   99,950.00 Guernsey Trust Company, Nigeria PSI‐JDA‐000039

8/28/2009 $   90,000.00 Guernsey Trust Company, Nigeria PSI‐JDA‐000041

9/29/2009 $ 100,000.00 Guernsey Trust Company, Nigeria PSI‐JDA‐000044

TOTAL: $1,278,700.00 SOURCE: Weidenfeld

       Chart prepared by Subcommittee

(5) Suntrust Bank 

In 2008, AUN received assistance from Mr. Weidenfeld to open an additional U.S. bank 

account. On January 28, 2008, a new AUN account was opened at a Washington, D.C. branch of 

Suntrust Bank, a large U.S. bank with over 1,700 branches.1246 Mr. Weidenfeld’s legal counsel 

told the Subcommittee that he facilitated the opening of this account.1247 The Subcommittee was 

told that Mr. Weidenfeld’s law firm was a longstanding customer of Suntrust Bank, and he 

decided to use that bank after his law firm was hired by AUN in January 2008, to act as an 

escrow agent for its U.S. funds. His legal counsel told the Subcommittee that Mr. Weidenfeld 

spoke with the Suntrust branch manager where his law firm did its banking, told her AUN 

wished to open a checking account to pay its bills, and was able to open an account affiliated 

with his law firm, entitled AUN Special Account No. [xxxxxx]28. 

 Bank records indicate that Mr. Weidenfeld initially funded the AUN account by 

transferring funds from his law firm account at Suntrust. His legal counsel said the funds he 

used had come from the AUN account at Wachovia which, when it closed, had transferred its 

funds to his law firm account at Suntrust. Over the next eight months, bank records show that 

the Guernsey Trust Company made multiple large wire transfers from its Swiss account at 

 

1246 8/28/08 internal Weidenfeld office email, PAU100307. 1247 See 11/13/09 letter from Weidenfeld’s legal counsel to the Subcommittee, PSI-Abubakar & Weidenfeld-01-

0024. That letter stated: “In January 2008, the Weidenfeld law firm and AUN entered into an escrow agreement, 

appointing the Weidenfeld law firm as escrow agent for the American University of Nigeria. To fulfill his role as 

escrow agent, Mr. Weidenfeld used a Weidenfeld law firm account with Sun Trust Bank. The account was named 

AUN Special Account, No. [xxxxxx]28. He believes that he informed ... the branch manager of SunTrust at 17th & 

Eye Streets, N.W., that the purpose of the account was to pay obligations of the American University of Nigeria. On 

January 28, 2008, the funds remaining in the Wachovia American University of Nigeria account were transferred to 

the Weidenfeld law firm American University of Nigeria account at SunTrust. As escrow agent, Mr. Weidenfeld 

directed the payment of expatriate salaries and expenses out of the account at the direction of AUN.” 
223 

Wegelin & Co. into both the AUN and Weidenfeld law firm accounts at Suntrust. From January 

to July 2008, the Weidenfeld law firm received about $1.3 million from the Guernsey Trust 

Company, while the AUN account received about $800,000. Another $1.2 million in wire 

transfers were sent to the AUN account with wire transfers that did not identify the originator, 

but likely came from the Guernsey Trust Company as well. 

This chart shows the $3.4 million in offshore wire transfers sent to the AUN and 

Weidenfeld law firm accounts at Suntrust Bank. The chart includes four wire transfers totaling 

$1.2 million which were sent to the AUN account in documents that did not identify the 

originator, but were likely also sent by the Guernsey Trust Company. 

Offshore Wire Transfers to  

Weidenfeld Law Firm and AUN Accounts at Suntrust Bank

Date Recipient Account Amount Originator Bates

2/5/08 Weidenfeld Law Firm Account $  150,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

2/29/08 Weidenfeld Law Firm Account $   50,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

3/31/08 Weidenfeld Law Firm Account $   50,000 Guernsey Trust Co.   PSI‐Abubakar&

Weidenfeld‐03‐0013

4/30/08 Weidenfeld Law Firm Account $  100,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

6/26/08 Weidenfeld Law Firm Account $   50,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

7/25/08 Weidenfeld Law Firm Account $   49,980 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

8/25/08 Weidenfeld Law Firm Account $   50,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

9/29/08 Weidenfeld Law Firm Account $  100,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

10/31/08 Weidenfeld Law Firm Account $   50,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

11/28/08 Weidenfeld Law Firm Account $   50,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

12/22/08 Weidenfeld Law Firm Account $   50,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

1/27/09 Weidenfeld Law Firm Account $   50,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

2/26/09 Weidenfeld Law Firm Account $   50,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

3/23/09 Weidenfeld Law Firm Account $   50,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

4/27/09 Weidenfeld Law Firm Account $   50,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

5/27/09 Weidenfeld Law Firm Account $   50,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

6/19/09 Weidenfeld Law Firm Account $   50,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

7/31/09 Weidenfeld Law Firm Account $  100,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013
224 

8/28/09 Weidenfeld Law Firm Account $   50,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

9/28/09 Weidenfeld Law Firm Account $   50,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

10/30/09 Weidenfeld Law Firm Account $  100,000 Guernsey Trust Co. PSI‐Abubakar&

Weidenfeld‐03‐0013

                       WEIDENFELD LAW FIRM TOTAL $1,349,980    

2/28/08 Weidenfeld Law Firm Account

‐AUN Special Account $  300,000 Unknown   PSI‐Abubakar&Weidenfeld‐03‐0010

3/31/08 Weidenfeld Law Firm Account

‐AUN Special Account $  275,000 Guernsey Trust Co.   PSI‐Abubakar&

Weidenfeld‐03‐0010

4/30/08 Weidenfeld Law Firm Account

‐AUN Special Account $  300,000 Unknown   PSI‐Abubakar&Weidenfeld‐03‐0010

5/28/08 Weidenfeld Law Firm Account

‐AUN Special Account $  300,000 Guernsey Trust Co.   PSI‐Abubakar&

Weidenfeld‐03‐0010

6/26/08 Weidenfeld Law Firm Account

‐AUN Special Account $  300,000 Unknown   PSI‐Abubakar&Weidenfeld‐03‐0010

7/25/08 Weidenfeld Law Firm Account

‐AUN Special Account $  300,000 Unknown PSI‐Abubakar&Weidenfeld‐03‐0010

8/25/08 Weidenfeld Law Firm Account

‐AUN Special Account $  300,000 Guernsey Trust Co. PSI‐Abubakar&Weidenfeld‐03‐0010

AUN ACCOUNT TOTAL $2,075,000 

 

                                              TOTAL                               $3,424,980                                      SOURCE: Weidenfeld

Chart created by Subcommittee  

When asked about these wire transfers, Mr. Weidenfeld’s legal counsel told the 

Subcommittee that the offshore funds were being used to pay the legal and consulting fees 

incurred by the Abubakars personally as well as AUN salaries and other expenses: 

“Mr. Weidenfeld maintained a separate AUN account for the purpose of disbursing 

money to pay AUN expatriate salaries and expenses. He continued to accept deposits into 

his law firm accounts after the AUN account was created to pay his fees and the fees of 

other counsel and consultants acting at Mr. Weidenfeld’s direction or on behalf of the 

Abubakars. In sum, the purpose of accepting funds into the AUN account was to pay 

AUN expenses; the purpose of accepting funds into Weidenfeld law firm accounts was to 

pay Mr. Weidenfeld’s fees and the fees of others. Mr. Weidenfeld understood that 

Jennifer and Atiku Abubakar were the source of all these funds, and that Atiku Abubakar 

was the source of Jennifer Abubakar’s funds.”1248

When asked what due diligence Mr. Weidenfeld or his law firm performed prior to 

accepting multiple large wire transfers from the Guernsey Trust Company, Mr. Weidenfeld’s 

legal counsel responded as follows: 

“As a small firm lawyer, Mr. Weidenfeld did not perform formal due diligence, but he 

got to know his clients, there was public information in the press indicating a legitimate 

 

1248 11/13/09 letter from Mr. Weidenfeld’s legal counsel, London & Mead, to the Subcommittee, PSIAbubakar_&_Weidenfeld-01-0028. 
225 

source of income, he understood that Atiku Abubakar had directed the payments, and it 

was not a surprise or a concern to him that Mr. Abubakar would have business 

relationships with various corporations. ... Mr. Weidenfeld does not believe that he paid 

any attention to the names of the corporate entities that transferred money to the 

accounts, because he understood that Mr. Abubakar was the ultimate source of the 

funds.”1249 

Mr. Weidenfeld’s legal counsel continued: 

“As a result of his work related to Nigerian politics and Mr. Abubakar’s candidacy for the 

Presidency, he became aware of press articles and other information indicating that it was 

known in Nigeria that Mr. Abubakar had an ownership interest in the Intels family of 

operating companies that performed oil logistics services in West Africa, and that Intels 

was a substantial company. He was also aware that the Abubakars were contributing 

millions of dollars to fund AUN. As a matter of common sense, it seems absurd to 

Mr. Weidenfeld that Mr. Abubakar would run proceeds of illegal activity through 

American banks in order to fund a charitable enterprise, though he does not recall even 

considering that possibility at the time. ... 

Mr. Weidenfeld became personally convinced that Congressman Jefferson’s statements 

about the Abubakars and the Gede Foundation were lies designed to get more money out 

of Lori Mody. Mr. Weidenfeld also knew the Abubakars personally. He liked and 

respected them. They did not conceal their involvement in AUN's affairs. 

Mr. Weidenfeld did not hide their involvement from AU or any banks. It never occurred 

to Mr. Weidenfeld that he should have any concern about accepting Atiku Abubakar’s 

money to fund a U.S.-style university in the predominantly Muslim Northern region of 

Nigeria. Mr. Weidenfeld is the unpaid co-Chair of the Board of Visitors of the National 

Defense University. He considered AUN to be an institution that furthered the national 

interests of the United States, as well as the interests of Nigeria. ... 

As a result of this investigation, Mr. Weidenfeld has come to understand the 

Subcommittee’s ongoing concern with the use of shell corporations to conceal the 

ownership and source of funds in certain foreign transactions. That concern is entirely 

understandable and legitimate. Mr. Weidenfeld understands that legislation may be 

appropriate to address this issue. However, in these unique circumstances, 

Mr. Weidenfeld did not believe that Atiku Abubakar was concealing his role by using 

these corporations.”1250

Mr. Weidenfeld told the Subcommittee that, on September 3, 2008, AUN opened 

additional accounts at Standard Chartered Bank in London.1251 The Subcommittee was told that 

the Standard Chartered accounts would be used “to cover the expenses of ex Pat salary 

payments.”1252 Mr. Weidenfeld’s legal counsel told the Subcommittee: 

 

1249 Id. 1250 Id. 1251 9/3/08 email from Mr. Weidenfeld to Standard Chartered Bank, PAU100348. 1252 9/3/08 email from Mr. Weidenfeld, PAU100348. 
226 

“In April 2008, AUN applied for an account with Standard Chartered Bank in the UK. 

Standard Chartered opened the account on August 23, 2008. ... AUN now pays all 

expatriate staff and faculty from this account. Mr. Weidenfeld remains a signatory, but an 

orderly transition to the AUN financial office in Yola is underway.”1253

Still another AUN account appears to have been opened at Oceanic Bank in Yola, 

Nigeria where AUN is located; this account appears to have paid the AUN July 2008 payroll.1254 

(6) Overview of Offshore Funds 

During the eight-year period, 2000 to 2008, Ms. Douglas brought nearly $25 million in 

suspect funds into the United States through accounts she opened at Citibank, Chevy Chase 

Bank, Wachovia Bank, and Eagle Bank. In addition, during the first six months of 2008, another 

$3.4 million was deposited into AUN and Weidenfeld law firm accounts at Suntrust Bank. 

These funds, which exceed $27 million, were supplied primarily by five offshore corporations: 

Siemens AG, a major German firm which sent funds from a bank account in London; Guernsey 

Trust Company Nigeria Ltd., which is incorporated and has bank accounts in Nigeria; LetsGo 

Ltd. Inc., a Panamanian firm which sent funds from bank accounts in Switzerland; Sima Holding 

Ltd. which is incorporated in the British Virgin Islands and sent funds from a bank account in 

Switzerland; and China Castle Investments, Inc. which sent funds from a bank account in 

Switzerland, but whose base of incorporation is unknown. 

To trace the flow of funds into and out of these accounts, the Subcommittee requested 

copies of monthly bank statements, generally going back five years for each account.1255 In a 

few cases, the Subcommittee obtained records of earlier transactions and, in a few cases, the 

records did not stretch back five years. The bank records reviewed by the Subcommittee show 

that, for the period 2003 to 2008, LetsGo provided the most offshore funds, wire transferring a 

total of nearly $17 million to Douglas-related accounts from 2003 to 2008. The Guernsey Trust 

Company provided the next highest amount, $10 million, which includes nearly $7 million to 

Douglas-related accounts from 2006 to 2009. Siemens AG provided four wire transfers in 2001 

and 2002, before the five-year time period generally examined by the Subcommittee, for a total 

of $1.7 million sent to the Douglas account at Citibank. Sima Holding sent four wire transfers 

in 2004 and 2005, for a total of nearly $700,000. Finally, China Castle Investments sent a single 

wire transfer in 2003, for a total of $500,000. 

 

1253 11/13/09 letter from Mr. Weidenfeld’s legal counsel to PSI, PSI-Abubakar_&_Weidenfeld-01-0024. 1254 9/6/08 email from Mr. Weidenfeld’s counsel and himself, PAU100417. 1255 The Subcommittee also obtained accounting opening and closing documentation for all of the accounts. 
227 

This chart summarizes the total amounts of offshore wire transfers sent to the relevant 

accounts at Citibank, Wachovia, Eagle, and Suntrust banks.1256

Total Wire Transfers Sent By Offshore Corporations

To U.S. Bank Accounts

Originator Dates Sent Total

Received Recipient Account

Siemens AG 4//01‐1/02 $ 1,772,644 Douglas personal account at Citi: 52096374

China Castle

Investments 1/30/03 $    500,000 Douglas personal account at Citi: 52096374

LetsGo Ltd. Inc. 4/03 ‐ 10/06 $  7,424,620 Douglas personal account at Citi: 52096374

LetsGo Ltd. Inc. 5/05 ‐ 5/07 $  5,550,000 Douglas/AUN account at Citi: 1209739556

Guernsey Trust Co. 6/06 ‐ 5/07 $  3,049,940 Douglas personal account at Citi: 52096374

Guernsey Trust Co. 7/07 ‐ 12/07 $  2,450,000 Douglas personal account at Wachovia: 1010122288618

Guernsey Trust Co. 10/08 ‐ 9/09 $  1,089,700 Douglas personal account at Eagle Bank

Sima Holding Ltd. 7/07‐ 12/07 $    699,965 Douglas personal account and Douglas/AUN account at Citi:

52096374 and 1209739556

LetsGo Ltd. Inc. 7/07‐1/08 $ 1,800,000 Douglas/AUN account at Wachovia: 2000028808282

Guernsey Trust Co. 1/08‐7/08 $     800,0001257 AUN account at Suntrust

Guernsey Trust Co. 1/08‐7/08 $  1,300,000 Weidenfeld law firm account at Suntrust

TOTAL: $26,436,869 SOURCE: Multiple

Chart prepared by Subcommittee

Ms. Douglas told bank officials that all of the funds sent to her accounts were supplied by 

her husband, Mr. Abubakar, and that she was unfamiliar with the particular offshore corporations 

that sent her wire transfers. She told one bank that she believed the funds were from “her 

husband’s oil company, Oil Logistics.”1258 When the Subcommittee asked her about LetsGo, 

Guernsey Trust Company, Sima Holding, and China Castle Investments, Ms. Douglas responded 

through her legal counsel that she “has no personal knowledge of these entities. To the extent 

that any of these entities were the source of deposits into her accounts or the AUN account, she 

understood that all such deposits came from her husband.”1259 

Mr. Weidenfeld provided a similar response, through legal counsel, when asked about the 

funds sent to his law firm account and the AUN account he opened at Suntrust Bank – that he 

believed all the funds came from Mr. Abubakar and that he paid no attention to and performed 

no due diligence regarding the specific offshore corporations that actually sent the funds. 

Information reviewed by the Subcommittee raise a number of questions about the source 

of the offshore funds. The $1.7 million in wire transfers supplied by Siemens AG is the most 

troubling, in light of the SEC’s description of those transfers as “bribe payments” routed through 

 

1256 No wire transfers are shown for Chevy Chase Bank accounts, because no wire transfers added new funds to the 

$5 million transferred from Merrill Lynch for the JDA Family Trust accounts, and all of the funds sent to the Gede 

Foundation account came from the Douglas or Gede Foundation accounts already identified in the chart. 

1257 The AUN account at Suntrust received four additional wire transfers totaling $900,000 with documentation that 

did not identify the originator, but which may be the Guernsey Trust Company. 1258 10/11/07 report from Wachovia investigator, JD-F-00006-8. 

1259 11/13/09 letter from Ms. Douglas’ legal counsel, London & Mead, to the Subcommittee, PSI 

Abubakar_&_Weidenfeld-01-0003. 
228 

Ms. Douglas’ personal checking account for “[t]he purpose of ... brib[ing] government officials” 

in Nigeria.1260 The $500,000 from China Castle Investments is also troubling since the 

Subcommittee was unable to find out anything about this company, and Ms. Douglas says she 

has no personal knowledge about why it sent her half a million dollars. 

The $10 million sent into the United States by the Guernsey Trust Company, including 

$7 million to Douglas-related accounts at Citibank, Wachovia and Eagle Bank; $900,000 to 

American University accounts; and $2.1 million to AUN and Weidenfeld accounts at Suntrust 

Bank, also raises questions. Concerns include why this company, formed in Nigeria, uses 

“Guernsey” in its name when it has no connection to that jurisdiction; why it did not inform Ms. 

Douglas in 2003, that it was the trustee of the Abubakar Blind Trust so that she could 

communicate that information to her U.S. banks; why the trustees of the Abubakar Blind Trust 

were not independent financial institutions but corporations beneficially owned in part by 

Mr. Abubakar’s trusted friend and business partner, Gabriele Volpi; and why the trustees had no 

direct interactions with the recipients of its funds. Still another question is how the trust’s sole 

asset – Intels shares from 1999 to 2003, and then Orlean shares from 2003 to the present – 

translated into the millions of dollars sent from the account to the United States. 

In addition, Mr. Abubakar has been active in business ventures other than the oil 

industry, but it is not clear whether or to what extent revenues from those other business ventures 

were included within the Blind Trust. Moreover, as Chevy Chase Bank noted internally: 

“Mr. Abubakar’s source of wealth is impractical to verify.” That bank noted further: 

“Prior to becoming Vice President, Mr. Abubakar was the chairman of seven Nigerian 

companies involved in oil services, insurance, pharmaceuticals, agriculture and the print 

media. From 1969 to 1989, he served in the Nigerian Customs and Excise service. 

Given the business practices that existed in Nigeria over this timeframe, the ability of the 

[Chevy Chase] Trust company to determine that his wealth was achieved through legal 

means is suspect.”1261

Still another set of questions involves LetsGo and Sima Holdings, which together sent 

more than $27 million in offshore funds into the United States, including $8 million to the 

Douglas-related accounts, $5.5 million to AUN accounts, and another $13.1 million to American 

University accounts, as discussed below. Ms. Douglas told the Subcommittee that she was not 

familiar with either corporation, but simply assumed they were sending funds supplied by her 

husband. She also told at least one bank that LetsGo was owned by her husband.1262 

Mr. Abubakar does not, however, have any ownership interest in either company, both of which 

are beneficially owned by members of the Volpi family. Mr. Volpi has told the Subcommittee 

that he sent funds to Ms. Douglas as part of a “moral agreement” acknowledging Mr. Abubakar’s 

financial interest in Intels, after his shares were seized by General Abacha, and pursuant to lines 

of credit LetsGo had extended to the Abubakar Blind Trust. These revenues, however, provided 

 

1260 SEC v. Siemens Aktiengesellschaft, (USDC DC), Case No. 1:08-cv-02167-RJL (December 12, 2008), 

Complaint, at paragraph 50. 

1261 1/30/06 internal Chevy Chase Bank memorandum, JD_004359-61, at 60. 1262 See 4/16/07 internal Citibank email from Citibank compliance officer regarding “Account Close-out ExtensionJennifer Douglas,” B00008535. 
229 

her with funds outside of the very Blind Trust that was established by Mr. Abubakar to isolate 

his interests in the oil industry while he was in public office. How these payments were 

calculated and how they relate to the revenues generated by the shares held by the Blind Trust 

remain unclear. 

The five U.S. banks that accepted substantial wire transfers from LetsGo or Sima 

Holdings for deposit into the Douglas-related accounts were unable to provide any information 

about either company to the Subcommittee. A bank that processed many of the wire transfers 

sent by those companies through its correspondent accounts, however, did have some 

information. The wire transfer documentation showed that both LetsGo and Sima Holdings sent 

funds to the United States from accounts at a small, private Swiss bank, Wegelin & Co., which 

routed the payments through its correspondent account at UBS. LetsGo also used an account at 

another Swiss bank, Banca Del Gottardo, which routed its wire transfers to the United States 

through its correspondent account at UBS. When the Subcommittee subpoenaed records from 

UBS regarding these wire transfers, it learned that on several occasions from 2005 to 2008, UBS 

had pressed Wegelin & Co. for more information about both companies. 

UBS began asking questions about LetsGo when, on June 2, 2005, Sonangol, the stateowned oil company in Angola, wire transferred $30 million from an account at Banco Africano 

Investimentos to the LetsGo account at Wegelin & Co., through Wegelin’s UBS correspondent 

account.1263 The LetsGo account had received funds from Sonangol on other occasions as well, 

as shown by this chart. 

UBS Wire Transfers from Sonangol to LetsGo Ltd.  

10/8/04 ‐ 6/2/05

Date Amount Ordering Bank Beneficiary

10/08/04 $377,515.65 Barclays Bank PLC LetsGo Ltd. Inc. account at

Bipielle Bank‐Suisse,  Chile

03/14/05 $189,453.05 Barclays Bank PLC LetsGo Ltd. Inc. account at

Wegelin & Co., Switzerland

06/02/05 $30,000,000.00 Banco Africano

Investimentos, in Angola

LetsGo Ltd. Inc. account at

Wegelin & Co., Switzerland

       TOTAL: $30,566,968.70 SOURCE: UBS1264

             Chart prepared by Subcommittee   

UBS also asked Wegelin & Co. questions about a number of 2005 wire transfers totaling 

$1.8 million that had been sent from a Sima Holding account at Wegelin & Co. through UBS to 

various other accounts, including $1.3 million in wire transfers later identified as paying for 

expenses related to AUN, as shown in the chart below.1265 

On October 5, 2005, a UBS banker sent an email to Urs Buff at Wegelin & Co. 

requesting information about LetsGo, specifically “the nature of this company’s business, the 

length of time which you have maintained a relationship with this company, that the transactions 

 

1263 UBS wire transfer records, UBS: LETSGO 00005. 1264 UBS Spreadsheet, Guernsey Trust and Letsgo LTD.xls. 1265 11/17/05 email from UBS to Wegelin & Co., UBS: LETSGO 00003-04; 11/10/08 Subcommittee interview of 

UBS officials. 
230 

fit within your customer’s profile, etc.”1266 The email requested “the same information” for Sima 

Holdings. 

 

More than a month later, on November 17, 2005, Debora Sager from Wegelin & Co. 

replied: “The transfer of USD 30 mil in favor of Letsgo Limited Inc. Panama is due to the 

selling of a 20% participation in an oil services company.”1267 With regard to Sima, Ms. Sager 

wrote: “The father of the beneficial owners of Sima is the sponsor of an university in Africa. 

They got the aim and objective of being one of the finest universities in Africa. He became 

Member of the Board of Trustees to run the affairs of the university.”1268 Ms. Sager stated that 

the June 2005 transfers were related to the university project “either for material supply or 

consultancy fees.” She identified other wire transfers from Sima Holding as $335,000 in 

payments related to the father’s yacht, $65,000 for watches, and $100,000 for other personal 

expenses.1269

This chart identifies the $1.8 million in wire transfers from Sima Holdings to LetsGo as 

discussed in the Wegelin email, showing the Wegelin banker’s explanation for each such 

transfer. 

UBS Wire Transfers from Sima Holdings

Date Amount Description Bates

12/23/04 $    80,000 Yacht Expenses UBS: LETSGO 00003‐04

1/25/05 $      5,000 Yacht Expenses UBS: LETSGO 00003‐04

1/25/05 $  100,000 Yacht Expenses UBS: LETSGO 00003‐04

1/25/05 $    50,000 Yacht Expenses UBS: LETSGO 00003‐04

3/23/05 $    65,000 Watch purchases UBS: LETSGO 00003‐04

5/11/05 $  100,000 Yacht Expenses UBS: LETSGO 00003‐04

5/15/05 $  100,000 Personal Expenses UBS: LETSGO 00003‐04

6/7/05 $  500,000 AUN Expenses UBS: LETSGO 00003‐04

6/7/05 $  200,000 AUN Expenses UBS: LETSGO 00003‐04

6/8/05 $  100,000 AUN Expenses UBS: LETSGO 00003‐04

6/8/05 $  250,000 AUN Expenses UBS: LETSGO 00003‐04

6/8/05 $  250,000 AUN Expenses UBS: LETSGO 00003‐04

           TOTAL:                   $1,800,000;  

           AUN SUBTOTAL:  $1,300,000

SOURCE: UBS

      Chart prepared by Subcommittee1270

Upon receiving the November 2005 email from the Wegelin banker, the UBS banker 

replied the same day, identifying additional LetsGo wire transfers that had raised questions and 

requesting additional information about the company.1271 Ms. Sager at Wegelin & Co. 

responded, again more than one month later on January 3, 2006: “The concerned payments are 

 

1266 10/5/05 email from UBS to Wegelin & Co., UBS: LETSGO 00004. 1267 11/17/05 email from Wegelin & Co. to UBS, UBS: LETSGO 00003. 1268 Id. 

1269 Id. 1270 One of the listed wire transfers, sending $100,000 for AUN expenses on June 8, 2005, corresponds to a wire 

transfer sent by Sima Holdings to Ms. Douglas’ personal checking account at Citibank. The remaining wire 

transfers, totaling $1.2 million, were apparently sent to other AUN accounts for which the Subcommittee does not 

have records.

1271 11/17/05 email from UBS to Wegelin & Co., UBS: LETSGO 00003. 
231 

in favor of an other company, which is in charge of all personal expenses of the beneficial owner 

of Letsgo Ltd.,” including salaries, administrative costs, insurance and travel expenses.1272 She 

also wrote: “Beneficiaries of the transferred money are in particular people working for the 

beneficial owner of Letsgo Ltd. and their names and bank details are known by the General 

Partner of Wegelin & Co. which is managing this relationship.” The UBS banker forwarded the 

Wegelin response to her superiors the same day.1273 

Two days later, on January 5, 2006, UBS assigned a compliance officer to review the 

LetsGo and Sima Holdings transactions.1274 The UBS compliance officer noted in an email to 

the UBS banker that, “although you asked twice, Wegelin has never answered the following 

questions: ‘the nature of this company’s business, the length of time which you have maintained 

a relationship with this company, that the transactions fit within your customer’s profile, 

etc.’”1275 

UBS continued to press Wegelin for information. As a result, on February 10, 2006, the 

UBS banker reported to the UBS compliance officer the following: 

“One of the partners of Wegelin called me yesterday to discuss this case. Apparently, 

both Letsgo and Sima are owned by a wealthy Italian family which is active in the oil 

business. In other words, the beneficial owners of Letsgo and Sima are the same family. 

The profits of their business activities go either into Letsgo which is owned by the 

parents or into Sima which is owned by the two sons. They then distribute their earnings 

as already explained in previous emails. Two partners of Wegelin personally know the 

beneficial owners for many years and have a complete understanding of their 

activities.”1276 

On February 14, 2006, the UBS compliance officer prepared an “AML Investigation 

Report” which included the information from the email exchanges and provided additional 

analysis.1277 The AML Investigation Report stated: 

“The father of one of the beneficial owners of SIMA is on the Board of Trustees of a 

university in Africa and from the transactions I determined the name of the university is 

ABTI-American University. It is a joint venture with American University in DC .... 

The name of the father of the SIMA BO [Beneficial Owner] is not provided but I ran all 

trustees, as listed on the site for ABTI, and there were no significant hits on WorldCheck. ... What is the business of SIMA Holdings that they are transferring this amount 

of money to ABTI? Is it the father’s money held in an account at SIMA? If so, shouldn’t 

he be listed as the Order Party? Otherwise, the actual party to the transfer is disguised 

and we do not really know the parties with whom we are dealing in such a transaction. 

 

1272 1/3/06 email from Wegelin & Co. to UBS, UBS: LETSGO 00002-03. 1273 Id. 1274 1/5/06 internal UBS email, UBS: LETSGO 00002. 1275 1/5/06 internal UBS email, UBS: LETSGO 00001-02. 1276 2/10/06 internal UBS email, UBS: LETGO 00001-02. 1277 2/13/06 AML Investigation Report, UBS: LETSGO 00041-44. 
232 

... I think we are concerned that we are guessing they [Sima Holdings] manage the 

father’s money. I am not sure anyone from Wegelin ever say[s] it.”1278 

Despite these concerns, the UBS AML Investigation Report concluded that its questions about 

LetsGo and Sima Holdings were satisfied, because: “Two partners of Wegelin personally know 

the beneficial owners for many years and have a complete understanding of their activities. All 

transactions are in line with their profiles.”1279 The AML Investigative Report concluded that no 

Suspicious Activity Report would be filed with respect to either company or any of the wire 

transfers.1280 

The information in the UBS email exchanges with Wegelin & Co. and in the AML 

Investigation Report indicate that the key person associated with both LetsGo and Sima Holdings 

is the father of a family from Italy; has two sons; is involved with ABTI-American University, 

now known as American University of Nigeria (AUN); and sits on the AUN Board of Trustees. 

Together, that information confirms the information provided to the Subcommittee in a letter 

from Mr. Volpi’s legal counsel, that Gabriele Volpi is the key beneficial owner of both LetsGo 

and Sima Holdings.1281 Mr. Volpi is also a beneficial owner of Orlean Invest Holding Ltd.1282

which served as the initial trustee of the Abubakar Blind Trust from 1999 to 2003, as well as one 

of the three beneficial owners of the Guernsey Trust Company which replaced Orlean as the 

trustee of the Abubakar Blind Trust from 2003 to the present. The documentation indicates that 

through his associations with LetsGo, Sima Holdings, Guernsey Trust Company, Orlean, Intels, 

and the Abubakar Blind Trust, Mr. Volpi was involved, directly or indirectly, with many, if not 

most, of the wire transfers of offshore funds into the Douglas-related accounts. Ms. Douglas and 

Mr. Abubakar’s legal counsel, Edward Weidenfeld, have described Mr. Volpi as Mr. Abubakar’s 

“trusted friend and business partner.”1283 

 In 2008, UBS again contacted Wegelin & Co. for more information about LetsGo, Sima 

Holdings, and other entities associated with wire transfers sent to the Douglas accounts in the 

United States.1284 Based upon its 2008 investigation, UBS told the Subcommittee that, in the fall 

of 2008, it determined that the reviewed wire transfers involved suspicious transactions, and that 

it would no longer facilitate wire transfers sent by LetsGo, the Guernsey Trust Company, or 

Mr. Abubakar, but would block their passage through the bank’s wire transfer system.1285 

 

1278 Id. at UBS: LETSGO 00043. 

1279 Id. 1280 Id. 1281 The letter from Mr. Volpi’s legal counsel indicates that LetsGo Ltd. Inc. is beneficially owned by Mr. Volpi and 

his wife, while Sima Holdings is beneficially owned by the Volpi Family Trust, and accordingly by Mr. Volpi, his 

wife, and their sons. PSI-Volpi-02-0001-6, at 2 and 5. 

1282 12/22/09 Volpi letter at 3. As explained earlier, Orlean Invest Holding Ltd. is headquartered in London, is a 

shareholder of Intels, and provides oil services at ports in Nigeria, Angola, Ivory Coast, and the Congo. See Orlean 

Invest Holding Co. website, www.orlean-invest.com. 

1283 11/13/09 letter from Ms. Douglas’ legal counsel, London & Mead, to the Subcommittee, PSIAbubakar_&_Weidenfeld-01-0031; 11/13/09 letter from Ms. Douglas’ legal counsel, London & Mead, to the 

Subcommittee, PSI-Abubakar_&_Weidenfeld-01-0020.

1284 Subcommittee interview of UBS officials, 4/22/09. 1285 Id. UBS representatives noted that it did not officially block wire transfers from Sima Holding, because there 

had been so few wires coming from that company. 
233 

C. American University and AUN 

This case history has discussed the nearly $25 million in offshore funds sent to the 

Douglas-related accounts at Citibank, Wachovia, and Eagle Bank, and the $2.1 million sent to 

the AUN and Weidenfeld law firm accounts at Suntrust Bank. This section of the Report 

discusses the $14 million in offshore funds wire transferred to U.S. bank accounts belonging to 

American University to pay consulting fees related to American University of Nigeria (AUN). 

When asked about these funds, American University told the Subcommittee that, over 

five years, wire transfers sent by LetsGo Ltd. Inc. totaled about $13.1 million, while wire 

transfers sent by the Guernsey Trust Company totaled about $900,000. American University 

told the Subcommittee that it “had no dealings with these companies” other than receipt of the 

funds and had no further information about them.1286 AU indicated that it had understood 

Mr. Abubakar had supplied the funds and, prior to the Subcommittee’s inquiry, saw no reason to 

question why the funds had been sent by particular offshore corporations.1287 Under current law, 

American University has no legal obligation to examine the source of funds provided to the 

university and does not do so. 

As mentioned earlier, AUN was founded by Mr. Abubakar in 2003, to bring a United 

States-style university to northern Nigeria where he was born. At the request of Mr. Abubakar 

and Ms. Douglas, American University became a partner in the AUN project, providing logistics 

and educational advice, and even linking its name and reputation to the new school. Originally 

called ABTI University, the school changed its name in September of 2004, to ABTI American 

University of Nigeria, and again in May 2007, to American University of Nigeria.1288 The 

university is located in Yola, which is the capital of Adamawa State in Northern Nigeria. It 

opened its doors to 110 students in September 2005, and saw its first graduates in 2009.1289

Documents show that Ms. Douglas played an active role in encouraging American 

University to assist in the building, staffing, and operation of AUN. According to her legal 

counsel, Ms. Douglas was tasked by her husband to work with AU to provide management 

services for AUN.1290 As part of that effort, she provided information to American University 

about AUN, and relayed messages from AU officials to her husband. Ms. Douglas’ legal 

counsel told the Subcommittee that “Mr. Abubakar also tasked his wife with maintaining a U.S. 

bank account for convenience in paying certain expenses associated with AUN, including paying 

some employees of AUN who preferred to be paid in dollars,” and that her husband “arranged to 

 

1286 7/22/08 letter from American University’s legal counsel to the Subcommittee, PSI-American_University-01-

0005.

1287 Id. 1288 5/28/07 Nigerian Corporate Affairs Commission, Certificate of Incorporation of a Company, JD-F-00430; 

9/29/04 letter from the Nigerian National Universities Commission to AUN, JD-F-00431. Mr. Abubakar had earlier 

established other schools in Nigeria under the name ABTI, including ABTI Nursery and Primary School and ABTI 

Academy in Yola, Nigeria. Atiku Biography, at 131. “ABTI” apparently referred to two of his children, Abba and 

Atiku Junior. Id. 

1289 8/27/05 email from American University to AUN, PAU101922; Subcommittee interview of American 

University officials, July 13, 2009. 

1290 11/13/09 letter from Ms. Douglas’ legal counsel, London & Mead, to the Subcommittee, PSIAbubakar_&_Weidenfeld-01-0001. 
234 

have money deposited into the account, and Mrs. Abubakar made payments out of the account to 

cover AUN expenses.”1291

When the Subcommittee asked AU why Ms. Douglas was paying the salaries of AUN 

professors working at AUN out of her checking account at Citibank, AU officials expressed 

surprise and concern about an AUN trustee paying university salaries and expenses from her own 

bank account.1292 Beginning in 2009, AU has instructed AUN that it will no longer accept funds 

from third parties, but only from AUN accounts. 

American University cooperated with the Subcommitte’s investigation by producing 

documents and participating in interviews. 

Creation of AUN. Ms. Douglas was a doctoral student at American University from 

about 2000 to 2007. In 2002, she approached the AU Dean of the School of International 

Service about founding a private university in Nigeria, in part because American University had 

experience with opening a school in another country, the American University of Sharjah in the 

United Arab Emirates. According to AU, “Mr. Abubakar informed American that he was 

investing his personal funds into the creation of a private autonomous university in Yola, 

Nigeria. Given American’s international expertise, Mr. Abubakar sought our advice on 

establishing a university.”1293 

The Dean brought the idea to the AU president, Benjamin Ladner. Robert Pastor, AU 

Vice President of International Affairs, agreed to spearhead the project and later, in 2007, served 

one term on the AUN Board of Trustees.1294 

 

 American University told the Subcommittee that it performed several site visits to 

Nigeria in 2002 and 2003, to determine the feasibility of the project. One of the team members 

then outlined a series of “positives” and “negatives” with regard to moving forward with the 

project.1295 The “Positives” included: “Proprietor has deep pockets, is committed to the project, 

and appears willing to agree to AU stipulations.”1296 When asked what those stipulations were, 

Mr. Pastor stated that “the budget process must be completely transparent.”1297 In terms of 

“Negatives,” the team member listed the following: “Political factor. Project is completely 

dependent on power, authority, commitment, financial support of one person with current 

political clout. What of the future? ... Khashoggi factor. Is there a risk to AU[’]s reputation? 

Role of rampant corruption and graft in Nigeria is unclear.”1298 

 

1291 Id. at PSI-Abubakar_&_Weidenfeld-01-0002. 

1292 Subcommittee interview of American University officials, August 7, 2008. 

1293 7/22/08 letter from American University’s legal counsel to the Subcommittee, PSI-American_University-01-

0001. 

1294 Mr. Pastor told the Subcommittee that he left the board of trustees in October 2008 after one term. He noted that 

the AU president thought he might have a conflict of interest in serving on the board, but when asked to describe 

that conflict, Mr. Pastor said that he didn’t know. Subcommittee interview of Robert Pastor, April 14, 2009. 

1295 6/11/03 internal American University report “ABTI University Project – Nigeria,” PAU000839. 

1296 Id. 

1297 Subcommittee interview of Robert Pastor, April 14, 2009. 

1298 6/11/03 internal American University report “ABTI University Project – Nigeria,” PAU000839. 
235 

Mr. Pastor told the Subcommittee that he was very sensitive to Nigeria’s reputation for 

corruption and explicitly addressed that issue before AU agreed to partner with AUN. Before 

entering into the project, he said AU personnel consulted with a number of organizations and 

persons including the EFCC in Nigeria, and were encouraged to move forward. In an email 

dated June 11, 2007, Mr. Pastor wrote: 

“On the alleged corruption of Atiku. We were certainly aware of the different reports 

about Atiku when he first approached us about helping build the university. [We] sought 

out all sources, including the US Ambassador and the intelligence community. The US 

Ambassador said he had never seen anything beyond a rumor, and that was confirmed by 

other sources. Recently, there are two charges that have been made about his corruption 

– on Jefferson and by Obasanjo and the EFCC.”1299

In 2003, Mr. Pastor presented the project to the American University “cabinet,” which 

consists of AU’s various vice presidents, and recommended partnering with AUN to establish the 

new university in Yola, Nigeria. The AU cabinet approved the proposal, and the AU president 

made the final decision to support the project.1300 AUN was established on May 21, 2003.1301 In 

July 2003, Ms. Douglas-Abubakar gave $1 million to the American University School of 

International Service Building fund.1302 

Consultancy Agreement. In December 2003, AU entered into a consultancy agreement 

with AUN to develop the new school. AU told the Subcommittee: 

“On December 31, 2003, American entered into a five year management consultancy 

agreement (‘2003 Agreement’) to provide assistance in recruiting AUN’s management 

team and faculty, developing the curriculum, and advising on architectural drawings and 

design of the campus master plan.”1303 

The consultancy agreement included a fee schedule. The AU General Counsel told the 

Subcommittee that AU was concerned as to whether AUN could afford, not only the consulting 

 

1299 Atiku Abubakar profile, PAU024731. See also AU newspaper describing the AUN project: “In May, a 

committee comprised of top University administrators and faculty members traveled to Nigeria, skeptical that 

establishing a university would be in AU’s best interest. Among their concerns was the country’s history of 

instability and corruption as well as ethnic and religious violence, Pastor said. Upon their return to the United States, 

however, they unanimously recommended that AU proceed.” The Eagle “AU May Establish in Nigeria,” November 

11, 2003. http://media.www.theeagleonline.com/media/storage/paper666/news/2003/11/10/News/ 

Au.May.Establish.In.Nigeria-553139.shtml. 1300 Subcommittee interview of American University officials, August 7, 2008. 1301 6/15/05 internal American University email, PAU027604. 1302 See 11/21/03 American University Gift Agreement, PAU02615-19 (gift was given on July 9, 2003, but the Gift 

Agreement to apply the funds to a new School of International Service was signed on November 21, 2003; the 

Agreement provided Ms. Abubakar with “a naming opportunity within the new School of International Service 

facility”) American University told the Subcommittee that, from 1999 to 2004, the Abubakars donated $1,026,110 to 

American’s School of International Service. See 10/10/08 American University’s written responses to 

Subcommittee questions, PSI American University 05-0008. 

1303 7/22/08 letter from American University’s legal counsel to the Subcommittee, PSI-American University 01-

0001-02. 
236 

fees, but also the costs of establishing a new university.1304 According to AU, the capital costs 

over ten years to build AUN were estimated to be approximately $400 million.1305 AU told the 

Subcommittee that, from the inception of the AUN project, it was understood that Mr. Abubakar 

would provide the needed funding for the school. Mr. Pastor told the Subcommittee that he 

personally asked Mr. Abubakar whether he had the approximately $75 - $400 million necessary 

to fund the school properly, and Mr. Abubakar responded that he could fund it.1306 According to 

Mr. Abubakar’s attorney, Mr. Abubakar has spent about $150 million in personal funds to 

establish and operate AUN from 2003 to the present.1307

Under current law, universities have no legal obligation to examine or inquire into the 

source of funds provided by a donor.1308 AU told the Subcommittee that it did not know the 

source of Mr. Abubakar’s personal funds and did not inquire. One university official told the 

Subcommittee that he knew Mr. Abubakar was a businessman with multiple businesses, 

including Intels Nigeria, a profitable oil services firm. Another told the Subcommittee that both 

the current and past presidents of AU also met with Mr. Abubakar to discuss the AUN 

project.1309 Mr. Pastor told the Subcommittee that he felt the AUN undertaking was a bigger 

financial risk to Mr. Abubakar than to AU, due to the amount of funding required.1310 

AU Services. Once the consultancy agreement was signed in December 2003, American 

University told the Subcommittee that AU’s “involvement was continuous” with regard to 

AUN’s development, and that AU advised AUN on “everything.”1311 American University 

provided the following examples of work it performed to assist AUN: 

- AU helped AUN advertise for and hire university officials. 

- AU helped AUN establish a governance structure and provided trustee 

recommendations. 

- AU helped AUN create a budget and worked with AUN to show it what an appropriate 

budget should look like. 

- AU helped AUN with IT issues like selecting software. 

- AU helped AUN set up major academic units, student programs, and residence halls. 

- AU helped AUN set up a human resources department and recruit staff. 

- AU helped AUN hire faculty and provide them with on-site training. 

- AU helped develop student marketing plans. 

- AU helped AUN set up classrooms, buy textbooks, and purchase laboratory equipment. 

- AU helped AUN set up its library. 

 

1304 Subcommittee interview of American University officials, August 7, 2008. 1305 In addition, AUN has had the following benefactors: the International Food Policy Research Institute, the 

MacArthur Foundation, Mr. Kekere-Akum, and the Oracle Corporation. See 10/10/08 American University’s 

written responses to Subcommittee questions, PSI American University 05-0007. 

1306 Subcommittee interview of Mr. Pastor, April 14, 2009. 1307 Subcommittee interview of Mr. Abubakar’s legal counsel, April 1, 2009. 1308 The American Council of Education told the Subcommittee that it was unaware of any law, regulation, or 

guidance regarding a university’s responsibility to conduct due diligence of gifts or transfers of funds to the 

university. Subcommittee interview of American Council of Education officials, January 11, 2010. 

1309 Subcommittee interview of American University officials, August 7, 2008. 1310 Subcommittee interview of Mr. Pastor, April 14, 2009. 1311 Id. 
237 

- AU helped AUN monitor its academic collections to make sure AUN is accredited. 

- AU helped AUN set up cultural programs.1312

 

American University told the Subcommittee that AU’s role was to help AUN become a fully 

operating, accredited educational institution. More than one year after the consultancy 

agreement was signed, AUN opened its doors in September 2005, with 110 students.1313 

Abubakar Control of AUN Funding. Documents reviewed by the Subcommittee 

indicate that, from the inception of the university, it has experienced problems establishing 

reliable funding and a transparent, accurate budget structure due to the level of control exercised 

by Mr. Abubakar over the university’s funding, construction, and expenses. A 2006 audit 

commissioned by Mr. Abubakar found, for example, that AUN had “no good accounting and 

Internal Control Systems that would allow complete and accurate reporting of the financial 

transactions of the University.”1314

 One key issue was that Mr. Abubakar apparently insisted on providing funding to AUN 

on a month-to-month basis and did not deposit funds into AUN bank accounts under the control 

of university officials.1315 Minutes from an October 2006 AUN board meeting described the 

situation as follows: 

“Up until this Board meeting, the Chief Financial Officer (CFO) of the University would 

seek funding from the Founder [Mr. Abubakar] on a month-by-month basis and also on 

special cases. At the same time, the Project Manager would work directly with the 

Founder on the major capital projects. Lately, this relationship had become dysfunctional 

both because of the strains that occurred because of a specific affair and because of the 

diminished capacity of the Founder to fund the institution at the same level as before.”1316 

A 2005 email from the AUN president also expressed concerns about diminishing 

funding for the university from Mr. Abubakar: 

“[T]here is a feeling among some that the flow of revenue to the University will slow 

dramatically if Atiku’s political fortunes continue to wane. The concerns were not eased 

by the recent effort to reduce the November transfer from the needed N28 million to N20 

million, even though we are well under budget even with the larger figure. Construction 

deferrals/delays have also raised fears that the prospects for the University are inexorably 

linked to Atiku’s political success.”1317

 

1312 Subcommittee interview of American University officials, August 7, 2008. 1313 8/27/05 email from American University to AUN, PAU101922. 1314 9/14/06 Special Audit Report on Investigation of Financial Improprietary in the Accounts of the University, 

PAU017743. This audit was commissioned by Atiku Abubkar and performed by Tom Satimehin and Co., 

Mr. Pastor told the Subcommittee that the AUN President and Vice-President disputed this audit. Subcommittee 

interview of Robert Pastor, April 14, 2009.

1315 Id. 1316 10/23/06 Robert Pastor’s Memorandum “Results of the Board of Trustees Meeting, October 19-20, 2006 and 

Follow Up,” PAU102137. 1317 11/11/06 internal American University email, PAU010272. 
238 

Still another concern was that AUN funding for expenses often came from third party 

accounts unrelated to the university and outside of its control, making it difficult for AUN to 

track or control expenses. A February 2007 email from the AUN president to AU, when asked 

about its funding and expenses over the prior two years, is instructive: 

“Most of the operating expense and almost all of the building capital expense did not pass 

through AAUN accounts. Management had no role in the tender process, the process of 

negotiation with contractors, or the approval of contracts, This was done by the Founder 

directly – or by Phil Osadtsuk, who reports directly to the Founder. Through a process he 

characterizes as ‘forensic accounting,’ George has done the best he can to reconstruct the 

spending so that the Board will have as complete a picture as we can present. As you 

know, we have had the discussion in the past with both the Board and the Founder about 

the advantages of having funds designated for AAUN pass through AAUN accounts. 

However, this is ultimately the Founder’s decision. My understanding is that most of the 

construction funds did not come from Atiku himself, but from other donors. I have heard 

informally where some of the funds have originated, but I do not have full information 

regarding who contributed what. If the Board feels that it needs that information, I think 

that Chairman Joda should approach the Founder directly on that question.”1318 

Mr. Abubakar seems to have exercised the same level of control over the Douglas 

accounts used to pay AUN expenses, sending funds on a monthly basis to enable Ms. Douglas to 

pay a variety of AUN bills, including the latest payroll expenses for AU professors teaching on 

the AUN campus. In a December 15, 2006 email, for example, Ms. Douglas wrote to AU 

officials that her account: 

“functions as a ‘pay as you go account’ in that monies are sent in as it is requested for 

paying either salaries or purchases the founder approved and asked me to pay. When he 

was putting together the budget last year, I gave him all the information for all 

expenditures that I handled up to the end of last year. The only outstanding information 

is this year’s transactions which he at least has the salary information since he provided 

those. I paid the vendors, but that information too he should have since he negotiates the 

contracts.”1319

Documents reviewed by the Subcommittee indicate that Mr. Abubakar was actively 

involved in funding and expenditure decisions involving AUN, including determining what 

expenses would be paid from Douglas and AUN accounts in the United States. The documents 

reviewed by the Subcommittee do not show any involvement by the trustees of the Abubakar 

Blind Trust in the decisionmaking process, even though they were nominally in control of 

disbursements from the Abubakar Blind Trust and the Guernsey Trust Company provided 

millions of dollars to pay AUN expenses. LetsGo provided additional millions of dollars, which 

Mr. Volpi told the Subcommittee reflected his personal donations and extensions of credit to 

 

1318 2/13/07 email from AUN to American University, PAU033157. “George” refers to George Peterson was the 

Vice President of Finance and Administration for AUN. 9/21/06 internal American University memorandum, 

PAU0108924. 

1319 12/15/06 email from Ms. Douglas to American University, PAU015995. 
239 

AUN. Neither Ms. Douglas nor American University were aware of Mr. Volpi’s role, however, 

instead insisting that all of the funds sent to AU and AUN had come from Mr. Abubakar. 

AUN Accounts in the United States. For a four-year period, from 2003 to 2007, Ms. 

Douglas used her personal checking accounts at Citibank to pay AUN expenses, including, 

beginning in 2005, paying the salaries of AUN professors who were teaching at AUN in Nigeria 

but seeking to be paid in U.S. dollars. When the Subcommittee asked AU why Ms. Douglas was 

paying AUN expenses from her personal accounts, AU expressed concern about this 

arrangement, in particular because Ms. Douglas was also an AUN trustee. The AU General 

Counsel told the Subcommittee that “a trustee shouldn’t have a role in the finances at all.”1320 

AU summarized the issue as follows: 

“In 2005, AUN made American aware that Mrs. Abubakar, on behalf of AUN, paid the 

salaries of AUN faculty from her U.S. bank account. American was aware that this 

continued for a two-year period ending in 2007. The reason explained to American as to 

why Mrs. Abubakar paid AUN faculty and staff from her personal bank account was that 

AUN was not at that time able to open its own account, yet expatriate staff and faculty 

still needed to have their salaries wired to their own foreign accounts outside Nigeria.”1321 

As early as 2005, AU knew AUN was unable to open accounts in its own name at U.S. 

banks due to questions about the source of its funding. On August 22, 2005, for example, an 

outside attorney from Gurne Porter & Baulig, which had been hired by AU, wrote to AU 

officials and the AUN president that she was unable to open an AUN account at Bank of 

America or Citibank, because: 

“They wanted to know where [AUN] was getting the money. My response that the 

money would likely come from student tuition and other traditional university funding 

sources did not satisfy them. They indicated that they would need to be able to prove that 

the money came from tuition or other legitimate sources.”1322 

Ms. Douglas also alerted AU officials in 2007, when Citibank informed her that it 

intended to close her accounts at the bank, including two accounts used to pay AUN expenses. 

On June 3, 2007, for example, Ms. Douglas sent AU officials an email stating: “Just a reminder 

again that Citibank AAUN salary account will be closed on June 23.”1323 Mr. Weidenfeld also 

told the Subcommittee that after learning that the Citibank AUN accounts would be closed and 

“without this or a similar account, the ability of AUN to retain and recruit non-Nigerian staff 

would be severely limited,” he “engaged in intensive discussions urging AU to provide [a] 

payment facility for expatriate staff and faculty,” but “American University’s financial office 

 

1320 Subcommittee interview of AU General Counsel, August 7, 2008. Ms. Douglas was a trustee of AUN. 3/1/04 

memorandum from AUN to American University, PAU033007. Other trustees of AUN as of 2004 were: 

Ambassador Andrew Young, Alhaji Ahmed Joda, Gabriele Volpi, Mike Adenuga, Manuel Vicente, Peter Okocha, 

Jackie Chanrai, Adamu Abubakar, Benjamin Lardner, Robert Pastor, and William Jacobs. 

1321 10/10/08 American University’s written responses to Subcommittee questions, PSI-American_University-05-

0008. 

1322 8/22/05 email from Gurne Porter & Baulig to American University, PAU0109008. 1323 6/3/07 email from Ms. Douglas to American University, PAU026491. 
240 

would not open such an account because AU wanted to maintain the separate identities of each 

institution.”1324 

After the Citibank accounts closed, Ms. Douglas and Mr. Weidenfeld opened an AUN 

account at Wachovia Bank, where AU banked, but Wachovia closed that account after seven 

months due in part to incoming large wire transfers from unfamiliar offshore corporations. 

Mr. Weidenfeld then used his law firm to open an AUN account at Suntrust Bank. Despite the 

closure of the Citibank and Wachovia accounts, AU apparently did not have any concerns about 

the source of funding of the AUN accounts or how their accounts were functioning. 

 

AU Receipt of Offshore Funds. Over the same time period from 2003 to 2007, AU 

itself was receiving wire transfers from two offshore corporations, LetsGo and Guernsey Trust 

Company, to pay for consulting fees incurred in connection with AUN. According to a July 22, 

2008 letter from AU to the Subcommittee: 

“Mr. Abubakar made payments, through Letsgo Ltd and Guernsey Trust Company, on 

behalf of AUN for the services American rendered pursuant to the 2003 Agreement. 

American received payments from Letsgo totaling $13,149,758 and the Guernsey Trust 

Company amounting to $900,000. American [University] has had no [other] dealings 

with these companies.”1325 

AU documents show that when some of these wire transfers arrived, the AU treasury 

operations office noted their unusual origin and had to research their purpose. In September 

2004, for example, a member of the treasury operations office sent an internal email stating: 

“Received a wire today for $100K from Northern Int’l Bank [in] Lugano, Chile .... Originator is 

SIMA Holding Company LTD. Expecting a gift?” Two weeks later, his colleague asked: “did 

we ever find out what this was for ...?” Two weeks after that he was told: “The wire ... was 

sent by ABTI.”1326 In 2007, a treasury operations officer noted: “we recvd $499,980 incoming 

wire from Letsgo Ltd FBO ABTI.” Her colleague asked: “where do these wires originate 

....what country?” She responded: “This wire originated from Panama.”1327

When asked if AU was concerned about receiving $14 million from unfamiliar offshore 

corporations, the AU General Counsel stated that we “weren’t concerned until we got the letter 

from you and now we’ve put everything on hold.”1328 AU officials told the Subcommittee that 

the university knew LetsGo was a Panamanian company, but had no further details about the 

corporation, including why it was wire transferring the funds for the AUN consulting work to 

AU.1329 AU officials also said they had no information about the Guernsey Trust Company. The 

documents also show no evidence that the trustees of the Blind Trust had any formal or informal 

involvement in releasing Abubakar trust funds to pay AU fees. 

 

1324 11/13/09 letter from Ms. Douglas’ legal counsel, London & Mead, to the Subcommittee, PSI-Abubakar 

&Weidenfeld-01-0023; Subcommittee interview of American University officials, August 7, 2008. 1325 7/22/08 letter from American University’s legal counsel to the Subcommittee, PSI-American University 01-

0005. 

1326 September and October 2004 internal AU emails, PAU020271-72. 1327 July 2007 internal AU emails, PAU019408-09. 1328 Subcommittee interview of American University officials, August 7, 2008. 

1329 Id., April 14, 2009. 
241 

AU told the Subcommittee that the University had asked Mr. Abubakar or his assistant 

about the source of the payments for the consulting fees, and were informed that all of the funds 

provided to AU in connection with the AUN came from Mr. Abubakar.1330 AU officials 

indicated that they were comfortable with that information and had no legal obligation to inquire 

into the source of Mr. Abubakar’s wealth or the source of the specific funds sent to the 

university. American University indicated that it did not believe it was the recipient of suspect 

funds in the AUN matter. American University also expressed pride in having assisted in the 

creation of American University of Nigeria. 

 To prevent future concerns about receiving payments from unfamiliar third parties, 

American University told the Subcommittee that, in December 2008, it had entered into a new 

one year consultancy agreement with AUN and, as part of that agreement, required all future 

payments to AU to be made exclusively from AUN bank accounts.1331

Disclosure Reports. Although universities have no legal obligation to inquire into the 

source of funds provided through a gift or transfer, current law does require universities to 

publicly disclose gifts and contracts from a foreign source if the value is in excess of $250,000, 

by filing online disclosures with the U.S. Secretary of Education.1332 American University told 

the Subcommittee that, although it had filed these disclosures in the past, and several had been 

filed with respect to its consulting work for AUN, it had not filed all of the required reports.1333 

When the Subcommittee requested copies of the public disclosures related to AU’s consulting 

work for AUN, American University discovered that it had inadvertently failed to file the 

required disclosures since 2006. On January 25, 2010, American University filed the missing 

public disclosures required by law, reporting more than $11 million in additional foreign 

payments related to its consulting work for AUN.1334 The public disclosures do not require 

American University to identify the source of the foreign payments, so the reports make no 

reference to Mr. Abubakar, Ms. Douglas, LetsGo, or the Guernsey Trust Company. 

 D. Conclusion 

 

 This case history demonstrates how, over an eight-year period from 2000 to 2008, Ms. 

Douglas and Mr. Abubakar were able to bring over $40 million in suspect funds into the United 

States, primarily through wire transfers sent by offshore corporations. Over this time period, Ms. 

Douglas opened over 30 accounts at U.S. banks, most of which were unaware of her PEP status 

 

1330 Id., July 13, 2009. 1331 Id. See also AU/AUN consultancy agreement, PSI-American_University-12-0007. 1332 See Section 1209 of the Higher Education Act of 1965, codified at 20 U.S.C. §1011f. This disclosure 

requirement was first enacted in 1986, as part of a reauthorization of the Higher Education Act. The House 

Committee report on the legislation explains that the law was “intended to promote clarity of academic purpose by 

avoiding the distortion that may occur in an academic program when large gifts are given to the institution from a 

foreign entity without public knowledge of that gift.” House Committee on Education and Labor Report on H.R. 

3700, Higher Education Amendments of 1985, Rep. 99-383 (November 20, 1985), at 87. 

1333 American University had filed disclosures related to its consulting work for AUN from 2002 to 2005, disclosing 

a total of about $6.3 million in foreign payments related to Nigeria. 

1334 The AU disclosures now on file with the Department of Education cover all payments related to its consulting 

work for AUN from 2002 to 2009, totaling in excess of $17.5 million. This total is higher than the $14 million 

discussed in this Report, because it includes payments of more than $3.6 million made during 2008 and 2009, which 

occurred outside the scope of the information requests made by the Subcommittee. 
242 

due to incomplete PEP lists maintained by third party vendors and inadequate due diligence 

procedures. In one case, a bank failed to document her PEP status even after being told of her 

marriage to the former Vice President of Nigeria. In two instances, Ms. Douglas used her U.S. 

legal counsel, Mr. Weidenfeld, to help convince a bank to open an account. At each bank where 

she opened an account, she described herself as unemployed or a student, soon began receiving 

large wire transfers from offshore corporations, and explained when asked that she had little or 

no information about the companies sending her money, but believed the funds were being sent 

by her husband. At first, U.S. banks accepted this explanation and allowed Ms. Douglas to bring 

nearly $25 million over eight years into the United States. Over the last year, Mr. Weidenfeld 

accepted at least another $2.1 million in wire transfers from an unfamiliar offshore corporation, 

with no questions asked. Over five years, American University accepted $14 million. 

In each case, the bank, law firm, or university was told it was receiving funds from 

Mr. Abubakar. Mr. Abubakar is a complex figure in Nigerian politics. His 20-year career in the 

Nigerian Customs Service, 10-year stint as a private businessman, and 8-year tenure as Vice 

President of Nigeria, are difficult to evaluate, especially in a country plagued by corruption. His 

founding of Intels while a Customs official, the company’s association with powerful 

government officials, and its increasing economic profile, raise questions about the basis for the 

company’s success. Mr. Abubakar’s quiet exchange of Intels shares for Orlean shares in 2003; 

his use of Orlean and then a shell company associated with Mr. Volpi to run his allegedly Blind 

Trust; and the millions of dollars sent by corporations associated with Mr. Volpi to Douglasrelated accounts in the United States, raise a host of questions about the nature and source of 

Mr. Abubakar’s wealth. An allegation by the SEC that Ms. Douglas received over $2 million in 

bribe payments from Siemens AG, intended in part for her husband, also cannot be dismissed. 

Mr. Abubakar and Ms. Douglas convinced U.S. banks, a U.S. law firm, and even a 

university to accept millions of dollars from unfamiliar offshore corporations to advance their 

interests. U.S. AML and PEP safeguards require further strengthening to prevent offshore 

corporations from sending millions of dollars of suspect funds into the U.S. financial system. 
243 

 VI. ANGOLA CASE STUDY: EXPLOITING POOR 

 PEP CONTROLS 

Angola, an oil producing country on the coast of western Africa, is known for an ongoing 

corruption problem, weak anti-money laundering (AML) controls, and a cash-intensive banking 

system. This case history examines three Angolan PEP accounts, involving an Angolan arms 

dealer, an Angolan government official, and an Angolan private bank that caters to PEP clients, 

in which the accountholder gained access to the U.S. financial system and exploited poor U.S. 

AML and PEP controls. 

Pierre Falcone is a notorious arms dealer, known for selling weapons to Angola during its 

civil war and for his close association with Angolan President Jose Eduardo dos Santos. He has 

long been the subject of criminal investigations in France, was imprisoned for one year 

beginning in 2000, was a fugitive from a 2004 French global arrest warrant, was convicted in 

France in 2007 and again in 2009 on charges of illegal arms dealing, tax fraud, and money 

laundering, and is now serving a six-year prison sentence. Yet for 18 years, from 1989 to 2007, 

he and his relatives were able to make use of nearly 30 accounts at Bank of America in 

Scottsdale, Arizona. Mr. Falcone used personal, family, and U.S. shell company accounts at the 

bank to bring millions of dollars in suspect funds into the United States and move those funds 

among a worldwide network of accounts. Although aware of his status as an arms dealer, Bank 

of America did not treat Mr. Falcone as a PEP, did not designate his accounts as high risk, and 

maintained the Falcone accounts with few questions asked. In 2007, after receiving a 

Subcommittee inquiry about the Falcone accounts, the bank conducted a new due diligence 

review, closed the accounts, and expressed regret at providing Mr. Falcone with banking services 

for years. 

Dr. Aguinaldo Jaime, a senior Angolan government official, was head of Banco Nacional 

de Angola (BNA), the Angolan Central Bank, when he attempted, on two occasions in 2002, to 

transfer $50 million in state funds to a private account in the United States, only to have the 

transfers reversed by the U.S. financial institutions involved. Dr. Jaime invoked his authority as 

BNA Governor to wire transfer the funds to a private bank account during the first attempt and, 

during the second attempt, to purchase $50 million in U.S. Treasury bills for transfer to a private 

securities account. Both transfers were initially allowed, then reversed by bank or securities firm 

personnel who became suspicious of the transactions despite the reputation of the foreign official 

involved. Partly as a result of those transfers and the corruption concerns they raised, in 2003, 

Citibank closed not only the accounts it had maintained for BNA, but all other Citibank accounts 

for Angolan entities. 

Banco Africano de Investimentos (BAI) is a $7 billion private bank whose largest 

shareholder is Sonangol, the Angolan state-owned oil company, and which caters to Angolans in 

the oil and diamond industries and government. Over the last ten years, BAI gained entry to the 

U.S. financial system through accounts at HSBC in New York, using HSBC wire transfer 

services, foreign currency exchange, and U.S. dollar credit cards for BAI clients, despite refusing 

to fully disclose its owners or provide a copy of its AML procedures. BAI’s resistance to HSBC 

oversight, weak AML controls, vulnerability to corruption, and PEP clientele, indicate that BAI 
244 

ought to be subject to tough U.S. AML and PEP controls, but HSBC has failed even to designate 

BAI as a high risk client warranting enhanced monitoring. 

Together, these accounts demonstrate, again, the need for U.S. financial institutions to 

strengthen their AML and PEP controls to keep foreign corruption out of the Unite States. 

 

A. Background 

Angola. Angola is located on the west coast of Africa, with a landmass slightly less than 

twice the size of Texas.1335 Its official language is Portuguese, and it has a population of roughly 

13 million. 

Angola gained its independence from Portugal on November 11, 1975.1336 From its 

inception, the country was engulfed in a civil war, initially among three factions, the Popular 

Movement for the Liberation of Angola (MPLA), the National Front for the Liberation of 

Angola (FNLA), and the National Union for Total Independence of Angola (UNITA). Under the 

1991 Biscesse Accord, the MPLA and UNITA agreed to a ceasefire and to hold elections. When 

the MPLA won a plurality of the vote, UNITA rejected the results, and the country returned to 

war. The 1994 Lusaka Protocol brought about another ceasefire, but localized fighting spread, 

and war continued until 2002. The civil war resulted in the death of as many as 1.5 million 

Angolans and the displacement of 4 million.1337 

Angola held its first presidential election in 1992, during the first ceasefire. Jose Eduardo 

dos Santos of the MPLA won a plurality of the vote and assumed the office of President of 

Angola. UNITA rejected the results and returned to war, while MPLA, by default, became the 

recognized government. UNITA’s insurgency effort was condemned by the United Nations and 

United States. In 1993, President Clinton issued Executive Order 12865 which declared a 

national emergency related to Angola and stated that UNITA constituted a “threat to 

international peace and security.”1338 The Executive Order prohibited the sale or supply from the 

United States of any arms, related material, petroleum, and petroleum products to Angola. The 

order also specifically prohibited the sale or supply of such commodities to UNITA. 

Additional sanctions followed, further tightening United States-Angola trade and 

targeting UNITA. Executive Order 13069, issued December 12, 1997, closed all UNITA offices 

in the United States and restricted the sale or supply of aircraft or aircraft parts and related 

services. Executive Order 13098, issued August 18, 1998, prohibited the supply of equipment 

used in mining, motorized vehicles, watercraft, spare parts for motorized vehicles or watercraft, 

mining services, and ground or waterborne transportation services. Each Executive Order was 

issued in conjunction with U.N. resolutions.1339

 

1335 CIA World Factbook, https://www.cia.gov/library/publications/the-world-factbook/geos/ao.html. 1336 Id. 1337 Id. 1338 Executive Order 12865 of September 26, 1993: “Prohibiting Certain Transactions Involving UNITA,” Federal 

Register Vol. 58, No. 18. 

1339See, e.g., UN Security Council Resolutions 864 (September 15, 1993), 976 (February 8, 1995), 1064 (July 11, 

1996), 1127 (August 28, 1997), 1130 (September 29, 1997), 1173 (June 12, 1998), and 1176 (June 24, 1998), 

http://www.un.org.
245 

 In 1998, the United Nations took action to block trade in Angolan diamonds.1340 These 

trade sanctions again targeted UNITA which controlled diamond producing territory and was 

using the proceeds from diamond sales to purchase arms and continue the armed conflict in 

Angola. The sanctions made it more difficult to trade in Angolan “conflict diamonds,”1341 but 

smuggling schemes ensued, followed by high-profile scandals involving arms-for-diamonds 

trades.1342

 In 2002, UNITA leader Joseph Savimbi was killed in action, effectively ending UNITA’s 

insurgency and the civil war. On May 6, 2003, President George W. Bush issued Executive 

Order 13298 lifting the prior sanctions. President dos Santos was still in office then and remains 

in office today, nearly 18 years after his initial election. During those 18 years, he has not 

allowed any new election for the presidency, although a presidential election has tentatively been 

scheduled for 2012. 

 Angola’s economy today is largely reliant on two extractive industries, oil and diamonds. 

Angola is currently one of Africa’s largest oil producers,1343 and oil accounts for over 90% of 

Angola’s exports.1344 Sonangol is the state-owned company that helps to produce and sell 

Angolan oil. Since 2004, China, through Sinopec and other companies, has become a key 

developer and purchaser of Angolan oil.1345 Angola is now believed to be China’s main supplier 

of oil.1346 In addition to oil, Angola has major diamond reserves, located in its northeastern 

region, and is among the world’s leading diamond producers.1347 Diamonds are Angola’s second 

largest export. Endiama is the state-owned company that helps produce and sell Angolan 

diamonds. 

 

1340 See UN Security Council Resolution 1173 (June 12, 1998), http://www.un.org; UN Security Council Press 

Resolution, “Council Decides Previously Specified Measures Against UNITA Shall Come Into Force on 1 July, 

Instead of 25 June,” June 24, 1998, http://www.un.org/News/Press/docs/1998/19980624.sc6534.html. 1341 “Conflict diamonds are diamonds that originate from areas controlled by forces or factions opposed to legitimate 

and internationally recognized governments, and are used to fund military action in opposition to those 

governments, or in contravention of the decisions of the Security Council.” United Nations website, 

http://www.un.org/peace/africa/Diamond.html. 1342 See, e.g., The Independent, “UN sanctions ineffective against UNITA rebels,” April 19, 2001, 

http://www.independent.co.uk/news/world/africa/un-sanctions-ineffective-against-unita-rebels-753578.html; The 

Independent, “Angola Calls for UN Sanctions Over Arms Violation Nations,” February 23, 2001, 

http://www.independent.co.uk/news/world/africa/angola-calls-for-un-sanctions-over-arms-violation-nations692922.html. 

1343 See Embassy of Angola website, http://www.angola.org/economy.html (“As independence was proclaimed in 

1975, Angola ranked third on the list of Africa’s most important oil producing countries after Nigeria and Gabon. 

Angola is currently the second oil producer with 1 million b/d output, and it is expected that by next year it will 

overtake Nigeria, with a current output of 2.3 million b/d.”).

1344 Embassy of Angola: Economy; http://www.angola.org/economy.html (“Oil is the backbone of the Angola’s 

economy. This sector makes up over 90% of the Country’s exports.”). 

1345 CNNMoney.com, “China’s appetite for African oil grows,” February 15, 2006, 

http://money.cnn.com/2006/02/08/news/international/africa_fortune/index.htm. 

1346 The Heritage Foundation, “Into Africa: China’s Grab for Influence and Oil,” February 9, 2007, 

http://www.heritage.org/research/africa/HL1006.CFM. 

1347 Embassy of Angola: Economy, http://www.angola.org/economy.html. 
246 

Despite its oil and diamond reserves, Angola ranks among the world’s worst performing 

countries in life expectancy and infant mortality rates.1348 The average Angola citizen can expect 

to live to only 41.7 years, one of the lowest rates in the world. Almost half of Angolans do not 

have access to safe drinking water.1349 The country is also known for human rights abuses. The 

U.S. Department of State’s 2008 Human Rights Report stated: “[T]he government’s human 

rights record remained poor, and there were numerous, serious problems.”1350 The report cited 

the following problems:

 “Government security forces tortured, beat, and otherwise abused persons.”

 “Police often extorted bribes.”

 “The constitution provides for an independent judiciary; however, the judiciary remained 

understaffed, inefficient, corrupt, and subject to executive and political influence.” 

 “Authorities arrested, harassed, and intimidated journalists.”

 

 Corruption. Angola has long had a problem with corruption. In 2002, an International 

Monetary Fund (IMF) report found that nearly $1 billion had disappeared from the Angolan 

treasury in 2001, and over the prior five years, more than $4 billion remained unaccounted 

for.1351 On November 9, 2006, Angolan police arrested over 100 protestors who marched in the 

capital city of Luanda to protest corruption in government.1352 The protestors handed out flyers 

accusing Angolan officials of siphoning funds from the Angola people to accounts in France. 

Shortly afterwards, on November 15, 2006, the IMF urged Angola “to tackle deep-rooted 

governance and corruption issues in the extractive sectors and expressed serious concern that 

progress on these issues is stalled.”1353

 In 2008, Transparency International ranked Angola 158th out of 180 countries on its 

annual Corruption Perceptions Index.1354 The U.S. State Department’s 2008 Human Rights 

Report characterized corruption in Angola as “widespread” yet noted “there were no public 

investigations or prosecutions of government officials during the year.”1355 The State 

Department also noted serious transparency concerns related to Angola’s two major state 

entities, Sonangol and Endiama.1356

 

1348 CIA World Fact Book, Country Comparisons – GDP Per Capita; https://www.cia.gov/library/publications/theworld-factbook/rankorder/2004rank.html; The United Nations World Population Prospects: The 2008 Revision. 

1349 UNDP Human Development Index Statistics, http:// hdrstats.undp.org/countries/country_fact_sheets/cty 

_fs_AGO.html. 

1350 U.S. Department of State, “2008 Human Rights Report: Angola,” February 25, 2009, 

http://www.state.gov/g/drl/rls/hrrpt/2008/af/118985.htm. 1351 International Monetary Fund, “IMF Report: Angola Staff Report for the 2002 Article IV Consultation,” March 

18, 2002, at 9. 

1352 Human Rights Watch, “Angola: New OPEC Member Should Tackle Corruption Not Critics,” December 14, 

2006, http://www.hrw.org/en/news/2006/12/14/angola-new-opec-member-should-tackle-corruption-not-critics. 1353 IMF press release, “IMF Executive Board Concludes 2006 Article IV Consultation with Angola,”

Public Information Notice No. 06/133, November 15, 2006, http://www.imf.org/external/np/sec/pn/2006/ 

pn06133.htm .

1354 Transparency International, 2008 Corruption Perception Index, http://www.transparency.org/policy_research/ 

surveys_indices/cpi/2008. 1355 U.S. Department of State, “2008 Human Rights Report: Angola,” February 25, 2009, 

http://www.state.gov/g/drl/rls/hrrpt/2008/af/118985.htm. 1356 Id. 
247 

 In addition, Angola has long been known for weak anti-money laundering and anticorruption controls. In 2008, the U.S. State Department’s International Narcotics Control 

Strategy Report described the country as follows: 

“Angola currently has no comprehensive laws, regulations, or other procedures to detect 

money laundering and financial crimes. Other provisions of the criminal code do address 

some related crimes. The various ministries with responsibility for detection and 

enforcement are revising a draft anti-money laundering law drawn up with help from the 

World Bank. ... The Central Bank has the authority to freeze assets, but Angola does not 

presently have an effective system for identifying, tracing, or seizing assets. ... Angola’s 

high rate of cash flow makes its financial system an attractive site for money laundering. 

... These massive cash flows occur in a banking system ill-equipped to detect and report 

suspicious activity. The Central Bank has no workable data management system and 

only rudimentary analytic capability. Corruption pervades Angolan society and 

commerce and extends across all levels of government.”1357

Given Angola’s turbulent history, corruption problem, and weak AML and anti-corruption 

controls, some U.S. financial institutions have decided to subject Angolan accounts to enhanced 

due diligence and monitoring; some have decided not to open such accounts at all. 

 B. An Angolan PEP: Moving Millions of Dollars For An Arms Dealer 

 

Pierre Joseph Falcone is a notorious arms dealer, known for selling weapons to Angola 

during its civil war and for his close association with Angolan President Jose Eduardo dos 

Santos. He has long been the subject of criminal investigations in France, was imprisoned for 

one year beginning in 2000, became a fugitive from a 2004 French global arrest warrant, was 

convicted in France in 2007 and in 2009, on charges of illegal arms dealing, tax fraud, and other 

financial crimes, and is now serving a six-year prison sentence. Yet for 18 years, from 1989 to 

2007, Mr. Falcone and his relatives used 29 accounts at Bank of America in Scottsdale, Arizona, 

to bring millions of dollars in suspect funds into the United States to advance their business 

interests. In the last eight years the Falcone accounts were open, from 1999 to 2007, the 

Subcommittee was able to trace over $60 million in suspect account activity that either passed 

through U.S. correspondent accounts or ended up in U.S. bank accounts. 

 

When the accounts were initially opened in 1989, U.S. anti-money laundering laws were 

limited, and the Falcones had to provide only minimal information to gain entry to a U.S. bank. 

In 2001, enactment of the Patriot Act tightened AML requirements for accounts held by foreign 

senior political figures, their relatives, and close associates, a group of persons now known as 

Politically Exposed Persons (PEPs), and made handling foreign corruption proceeds a U.S. 

money laundering offense. Despite those new legal requirements, and a burst of publicity about 

Mr. Falcone after his imprisonment in France, Bank of America failed to identify him as a PEP 

due either to his close association with President dos Santos or his own 2003 appointment as an 

Ambassador of Angola to UNESCO. In 2005, when routine monitoring did flag certain 

 

1357 U.S. Department of State, “2008 International Narcotics Control Strategy Report, Volume II, Money Laundering 

and Financial Crimes,” March 2008, at 83-84. 
248 

transactions, Bank of America conducted a special review of the accounts and identified 

Mr. Falcone as an arms dealer, but failed to identify him as a PEP, determined that his account 

activity was “normal” despite multiple high-dollar international wire transfers, and failed even to 

designate the accounts as high risk. 

Bank records reviewed by the Subcommittee showed that the Falcone accounts at Bank 

of America engaged in numerous suspicious transactions over the last eight years they were 

open. For example, from 1999 to 2003, the accounts received multiple wire transfers totaling in 

excess of $6 million from unidentified “clients” in known secrecy jurisdictions such as the 

Cayman Islands, Luxembourg, Singapore, and Switzerland. From 2001 to 2003, an account 

opened by Mr. Falcone’s wife in the name of Monthigne Corp., an apparent shell company 

formed under the laws of Arizona, received numerous large wire transfers from obscure offshore 

corporations, including $2.46 million sent by AALL Trust and Banking Corp. Ltd., a bank in the 

Cayman Islands; nearly $855,000 from Culmen Investments using accounts in Israel; nearly 

$200,000 from Rego Holdings Ltd. using accounts in Israel; and nearly $250,000 from Valley 

Marketing Ltd. using Cayman accounts. After receipt of the funds, Ms. Falcone transferred large 

amounts to other Falcone-related accounts. 

The Falcone accounts also showed frequent large-dollar transfers from one Falconerelated account to another, at times across international lines. For example, from 2004 to 2007, 

Mr. Falcone sent wire transfers from bank accounts in South Africa, Angola, Portugal, and 

China, in amounts ranging from $100,000 to $550,000, to Falcone accounts at Bank of America 

in Arizona. From 2000 to 2002, Bank of America accounts belonging to Mr. Falcone’s wife, his 

mother, another apparent relative, Iris Montero Mendez, and Monthigne sent multiple wire 

transfers totaling nearly $1.2 million to a Utah bank account belonging to Essante Inc., a health 

and beauty business associated with Ms. Falcone. In addition, from 2001 to 2002, Ms. Mendez 

made multiple high-dollar transfers from her account to Ms. Falcone’s account at Bank of 

America, sending $100,000 to $175,000 at a time for a total of about $950,000. These frequent, 

high-dollar, offshore transactions failed to trigger any review. 

 Another set of questionable transactions involves large wire transfers from Companhia 

Angolana de Distribuicao Alimentar Inc. or CADA, an Angolan company controlled in part by 

Mr. Falcone. From 2000 to 2001, CADA wire transferred a total of $1.4 million to a joint 

Falcone account at Bank of America, as well as $9 million to a Swiss account in the name of 

Brenco International, another company beneficially owned by Mr. Falcone and involved in his 

illegal arms trade. Bank records from HSBC also show that, in July 2001, the CADA account at 

HSBC Equator Bank received over $20 million from the Angolan state oil company, Sonangol. 

HSBC records also show that, from 1997 to 2004, HSBC itself conducted a joint business 

venture in Angola with Mr. Falcone through joint ownership of Triang Ltd., a trucking operation 

that transported fuel for the Angolan diamond industry. 

Still another set of transactions raising red flags are numerous high-dollar transfers, 

involving from $50,000 to $549,000 at a time, between the Falcone accounts at Bank of America 

and the Beverly Loan Company, an upscale pawn shop in Beverly Hills, California. The 

Subcommittee learned that the Beverly Loan Company issues loans secured by fine jewelry, and 

since 2001, Ms. Falcone had obtained over $7.3 million in loans in her own name and the name 
249 

of her assistant. These loans were a frequent source of funds for the Falcone accounts from 2001 

to 2007. 

 Many of these transactions occurred prior to the special review of the Falcone accounts 

conducted by Bank of America in June 2005, yet the bank deemed the account activity as 

“normal,” and failed to designate the Falcone accounts as high risk or to require enhanced 

monitoring, even after learning he was an international arms dealer. The documents indicate that 

the bank also failed even to consider designating Mr. Falcone a PEP client. When asked about 

specific transactions, Bank of America told the Subcommittee that its 2005 review had looked at 

only 19 months of account activity and did not examine the wire transfers sent by unidentified 

clients. The bank also said that it did not collect specific information about the AALL Trust and 

Banking Corp., Cullen Investments, Rego Holdings, Valley Marketing, CADA, or Beverly Loan 

Company, and had not viewed the high-dollar transfers among Falcone accounts to be of 

concern. The bank also told the Subcommittee that it did not know Ms. Mendez’s relationship to 

the Falcones, despite her years as a banking customer and the high volume of transfers between 

the accounts belonging to her and the Falcones. In an interview with the Subcommittee, Bank of 

America expressed regret for providing years of banking services to a notorious arms dealer. In 

2007, Bank of America closed the Falcone accounts. 

(1) Background 

For many years, Pierre Falcone has been publicly associated with illegal arms trafficking, 

tax evasion, bribery, and other misconduct. He is most frequently associated with a massive 

scandal that broke in France in 2000, dubbed “Angolagate” by the media, involving illegal arms 

sales in Angola at exorbitant prices facilitated by millions of dollars in bribes paid to government 

officials.1358 

 During the 1990s, Mr. Falcone worked as a consultant to the French government agency, 

SOFREMI, which handles foreign arms sales. He helped arrange numerous arms sales to foreign 

countries, including Angola which was then in the midst of its civil war and subject to a UN 

arms embargo. Over the years, allegations mounted about his role in conducting illegal arms 

sales in Angola in violation of the embargo, as well as his alleged involvement with bribes paid 

to French and Angolan officials. He became the subject of multiple criminal investigations. 

In December 2000, Mr. Falcone was detained in a French jail pending an investigation 

into allegations of his involvement with tax fraud, influence peddling, and corruption of public 

officials associated with arms sales in Angola.1359 One year later, in December 2001, he was 

released from prison, after posting more than 100 million French francs (about $14 million) in 

 

1358 See, e.g., The Telegraph, “Angolagate ‘Arms for Oil’ Trial Pens in Paris,” October 6, 2008, 

http://www.telegraph.co.uk/news/worldnews/europe/france/3146113/Angolagate-arms-for-oil--trial-opens-inParis.html.; Third World Traveler, “The Influence Peddlers,” 2002, 

http://www.thirdworldtraveler.com/Weapons/Influence_Peddlers_MAK.html. 

1359 See Ordonnance De Renvor Devant le Tribunal Correctionnel Non-Lieu Partiel et Requalification, No. du 

Parquet: 0019292016, No. Instruction: 2076/00/40 (2007), at 4. See also In These Times, “The Arms Dealer Next 

Door,” December 22, 2001, http://www.inthesetimes.com/issue/26/04/feature4.shtml. 
250 

bail, surrendering his passport, and agreeing to other travel restrictions.1360 In 2002, French 

authorities initiated a new round of investigations into allegations of wrongdoing involving 

Mr. Falcone.1361 In June 2003, the Angolan government, under President dos Santos, appointed 

Mr. Falcone as the Angolan ambassador to UNESCO, and Mr. Falcone asserted diplomatic 

immunity from criminal prosecution.1362 He then left the country in September 2003, in 

violation of his bail restrictions.1363 French authorities eventually denied his claim on the ground 

that his arms trafficking activities were not a function of his diplomatic status.1364 In the 

meantime, a French magistrate issued two summons for Mr. Falcone to appear in October and 

November 2003.1365 When Mr. Falcone did not appear in response to either summons, on 

January 14, 2004, the magistrate issued a global warrant for his arrest.1366 That arrest warrant 

remained outstanding for several years. 

In addition to the French proceedings, in 2002, Swiss authorities also initiated an 

investigation into Mr. Falcone and the Angolagate scandal.1367 That investigation was suspended 

in 2004, however, by the Public Prosecutor of Geneva, Daniel Zappelli.1368 

About three years after he left, Mr. Falcone returned to France to face multiple charges 

related to his work for SOFREMI. In March 2007, he was one of 42 people indicted on charges 

related to illegal arms trafficking in Angola, including Jean-Christophe Mitterrand, son of the 

 

1360See Ordonnance De Renvor Devant le Tribunal Correctionnel Non-Lieu Partiel et Requalification, No. du 

Parquet: 0019292016, No. Instruction: 2076/00/40 (2007), at 4. See also In These Times, “The Arms Dealer Next 

Door,” December 22, 2001, http://www.inthesetimes.com/issue/26/04/feature4.shtml; see also, Le Monde, “PierreJoseph Falcone a été remis en liberté après un an de détention,” December 4, 2001; Third World Traveler, “The 

Influence Peddlers,” 2002, http://www.thirdworldtraveler.com/Weapons/Influence_Peddlers_MAK.html. 1361 See Ordonnance De Renvor Devant le Tribunal Correctionnel Non-Lieu Partiel et Requalification, No. du 

Parquet: 0019292016, No. Instruction: 2076/00/40 (2007), at 4. See also Amnesty International, “Undermining 

Global Security: the European Union’s arms exports,” International Action Network on Small Arms website, 

http://www.iansa.org/regions/europe/documents/undermining_security/brokering_transport.htm. 

1362 See, e.g., Le Monde, “Un mandat d'arrêt international a été délivré contre Pierre Falcone,” January 17, 2004; 

Amnesty International, “Undermining Global Security: the European Union’s arms exports,” International Action 

Network on Small Arms website, 

http://www.iansa.org/regions/europe/documents/undermining_security/brokering_transport.htm. 

1363 See, e.g., Le Monde, “Un mandat d’arrêt international a été délivré contre Pierre Falcone,” January 17, 2004; Le 

Monde, “Pierre Falcone a quitté la France grâce à son passeport diplomatique angolais, September 23, 2003. 1364 See Ordonnance De Soit Communique, Tribunal de Grande Instance de Paris, No. du Parquet: 0019292016, No. 

Instruction: 2076/00/40 (11/18/2003). See also, Amnesty International, “Undermining Global Security: the 

European Union’s arms exports,” International Action Network on Small Arms website, 

http://www.iansa.org/regions/europe/documents/undermining_security/brokering_transport.htm. 

1365 See Ordonnance De Renvor Devant le Tribunal Correctionnel Non-Lieu Partiel et Requalification, No. du 

Parquet: 0019292016, No. Instruction: 2076/00/40 (2007), at 7. See also Le Monde, “Un mandat d’arrêt 

international a été délivré contre Pierre Falcone,” January 17, 2004. 1366 See Ordonnance De Renvor Devant le Tribunal Correctionnel Non-Lieu Partiel et Requalification, No. du 

Parquet: 0019292016, No. Instruction: 2076/00/40 (2007), at 6. See also Le Monde, “Un mandat d’arrêt 

international a été délivré contre Pierre Falcone,” January 17, 2004. 1367 See, e.g., Le Monde, “Le volet suisse de l’enquête sur l’affaire Falcone pourrait être menace,” November 21, 

2002; Global Witness, “Time for Transparency: Coming clean on oil, mining and gas revenues”, March 2004, at 42-

45 (citing a February 2002 “Geneva-based investigation into the possible involvement of Pierre Falcone in ‘money 

laundering, support for a criminal organisation’ and ‘corruption of foreign public officials’”). 1368 See, e.g., Aktion Finanzplatz Schweiz, the Berne Declaration, and Global Witness, press release, “Geneva 

Prosecutor must revive Angola Oil Corruption Probe,” February 15, 2008. 
251 

former French President, and Charles Pasqua, former French interior minister.1369 Among other 

charges, Mr. Falcone and his business partner, Arkadi Gaydamak, were alleged to have sold 

170,000 land mines, 420 tanks, 12 helicopters, six warships, and other weapons to the dos Santos 

Administration during the Angolan civil war in violation of the UN arms embargo.1370 Brenco 

International, a company beneficially owned by Mr. Falcone and Mr. Gaydamak, allegedly 

brokered the arms sales, which were valued at $790 million.1371 In addition, Mr. Falcone was 

alleged to have ordered bank transfers in favor of Angolan officials that, between 1993 and 2000, 

totaled at least $54 million.1372 In October 2009, Mr. Falcone was convicted of illegal arms sales, 

tax fraud, money laundering, and embezzlement, and sentenced to six years in prison.1373 

Earlier, he had been convicted in two other cases on charges of tax fraud and misappropriation of 

public funds, and received prison terms of one and four years.1374 He is currently incarcerated in 

France. 

 

Despite Mr. Falcone’s notorious reputation and involvement in ongoing criminal 

investigations, he and his family were able to maintain a lavish lifestyle in Arizona since the 

1980s.1375 In 2000, Mr. Falcone purchased a mansion in Paradise Valley, Arizona, for a reputed 

$9.6 million, then the highest-value residential purchase in Arizona history.1376 The house is 

currently on sale for $14.5 million, and is described in a Southeby’s advertisement as having 

over 16,000 square feet of space, seven bedrooms, ten bathrooms, a pool, tennis court, and fivecar garage. 

 

 Mr. Falcone is married to Sonia Montero Falcone, a former Miss Bolivia International 

and president of Essante Inc., a Utah company specializing in health and beauty products.1377 On 

 

1369 See Ordonnance De Renvor Devant le Tribunal Correctionnel Non-Lieu Partiel et Requalification, No. du 

Parquet: 0019292016, No. Instruction: 2076/00/40 (2007). See also “Undue Diligence,” Global Witness, March 

2009, at 94, citing Angolagate indictment, 5 April 2007. 

1370 See Ordonnance De Renvor Devant le Tribunal Correctionnel Non-Lieu Partiel et Requalification, No. du 

Parquet: 0019292016, No. Instruction: 2076/00/40 (2007), at 49-50. See also IPS News, “No Angolans at 

‘Angolagate’ Trial,” October 15, 2009, http://ipsnews.net/news.asp?idnews=44276. 

1371 See Ordonnance De Renvor Devant le Tribunal Correctionnel Non-Lieu Partiel et Requalification, No. du 

Parquet: 0019292016, No. Instruction: 2076/00/40 (2007), at 29, 80. See also Wall Street Journal, “French 

Businessmen Are Sentenced for Arms Trade,” October 28, 2009; The Guardian, “French elite on trial in $791m 

Angola arms case,” October 7, 2007. 

1372 See Ordonnance De Renvor Devant le Tribunal Correctionnel Non-Lieu Partiel et Requalification, No. du 

Parquet: 0019292016, No. Instruction: 2076/00/40 (2007), at 58-59. 

1373 See New York Times, “French Power Elite Face a Fall From Grace,” October 27, 2009, 

http://www.nytimes.com/2009/10/28/world/europe/28iht-paris.html; see also Wall Street Journal, “French 

Businessmen Are Sentenced for Arms Trade,” October 28, 2009. 

1374 See, e.g., “Pierre Fralcone condamne a quatre ans de prison ferme pour fraude fiscale,” Le Monde, January 18, 

2008; Le Monde, “Pierre Falcone: quatre ans ferme pour fraude fiscal,” January 20, 2008; AFP, “Prison ferme pour 

le fils Pasqua et Pierre Falcone dans le dossier Sofremi,” December 11, 2007. 1375 See The Arizona Republic, “Jet-Setter’s Life Marked by Intrigue Arms-Deal Allegations Don’t Fit, Many Say,” 

January 12, 2001 (“Friends say Falcone, who has lived in the Valley for about 15 years, is the consummate 

internationalist. He is described as multilingual, constantly on his cell phone, circling the globe, hobnobbing with 

corporate kings and heads of state.”). 

1376 See undated BOA Global AML Operations report on Falcone accounts, BOA-PSI-04698-700; Arizona 

Republic, “Valley Socialite Jailed in African Weapons Case,” October. 27, 2009, and “Jet-Setter’s Life Larked by 

Intrigue,” January 12, 2001; “Angolan Can of Worms,” February 22, 2002. 1377 See, e.g., Business Wire HealthWire, “From Beauty Queen to Beauty Empire: Former Miss Bolivia Launches 

International Health and Beauty...,” September 28, 2000. 
252 

March 15, 2000, Ms. Falcone formed an Arizona company, Monthigne, Corp., and opened an 

account in the company’s name at Bank of America.1378 Publicly available information from the 

Arizona Corporation Commission describes the company as a “legal services” business.1379

Arizona State corporation documents also indicate that it was dissolved in 2005.1380 Bank of 

America was unable to tell the Subcommittee anything about this company which appears to 

have functioned as a shell corporation. 

 

 In January 2006, U.S. prosecutors indicted Ms. Falcone for immigration fraud, which was 

uncovered when she applied to become a U.S. citizen.1381 In March 2007, in an arrangement 

reached with prosecutors, she pled guilty to illegally hiring foreign workers at her Arizona 

residence and agreed to leave the country. In August 2007, the U.S. Government deported 

Ms. Falcone from the United States, and she reportedly left for China.1382 In March 2009, the 

Subcommittee attempted to contact Mr. Falcone, but received no response. 

(2) Falcone Accounts at Bank of America 

Mr. Falcone first opened an account at Bank of America in Scottsdale, Arizona in 1989. 

At the time, U.S. anti-money laundering laws were limited, and the bank opened the accounts 

with virtually no personal information about the Falcones other than their U.S. address. 

Falcone Accounts. From 1989 to 2005, Bank of America opened 29 accounts for the 

Falcones at its Scottsdale branch, including four for Mr. Falcone;1383 seven for Ms. Falcone;1384

ten for Mr. Falcone’s mother, Vincente Falcone, who lives in Canada;1385 one for Mr. Falcone’s 

 

1378 Arizona Corporation Commission State of Arizona Public Access System, annual reports for Monthigne, Corp. 

See also 8/15/02 BOA Corporate Signature Card and Certified Copy of Corporate Resolutions, BOA-PSI-03422-24 

(identifying Ms. Falcone as the president of Monthigne Corp.). 

1379 Arizona Corporation Commission State of Arizona Public Access System, annual reports for Monthigne, Corp. 1380 1/5/05 Arizona Corporation Commission Corporations Division, Certificate of Dissolution for Monthigne, Corp. 1381 United States v. Falcone, Case No. CR06-0015 PHX (USDC AZ), Indictment, January 10, 2006. See also 

Arizona Daily Sun, “Wife of Ambassador to UNESCO Arrested on Fraud Charges,” February 17, 2006. 

1382 See East Valley Tribune, “East Valley Philanthropist Deported in Plea Deal,” August 29, 2007, 

http://www.eastvalleytribune.com/story/96157.

1383 Account Nos. 7676-1391 (opened 3/89 and closed 7/07); 2-3951-3328 (opened 1/98 and closed 7/07); 2-7220-

7365 (opened 2/98 and closed 7/07); and 2-7220-7883 (opened 3/98 and closed 4/01). The final two accounts were 

joint accounts between Mr. Falcone and his business associate, Gasper Devita. Ms. Falcone was also a signatory on 

the 2-7220-7365 account. See account signature forms, BOA-PSI-00010, 12, 18-29. Mr. Devita had four other 

accounts at Bank of America as well. Chart of Falcone-related accounts prepared by Bank of America for the 

Subcommittee investigation, BAC-PSI 07505. 

1384 Account Nos. 8-4603-5538 (opened 9/94 and closed 7/07); 2-7245-0445 (opened 6/98 and closed 2/01); 2-5492-

3451 (opened 12/98 and closed 7/07); 2-5492-3478 (opened 12/98 and closed 4/00); 2-5492-3397 (opened 12/98 and 

closed 7/07); 2-7392-8383 (opened 1/99 and closed 1/03); and 2-5773-3203 (opened 7/99 and closed 7/07). Two of 

the accounts were joint accounts, one with Ms. Falcone and Perrine Falcone, and the other with Ms. Falcone and 

Eugenia Falcone. Chart of Falcone-related accounts prepared by Bank of America for the Subcommittee 

investigation, BAC-PSI 07505. 

1385 Account Nos. 7676-1391 (opened 3/89 and closed 7/07); 2-7477-6027 (opened 3/99 and closed 5/04); 2-7477-

6027 (opened 3/99 and closed 5/04); 46-7427-0385 (opened 1/01 and closed 10/03); 46-7076-9382 (opened 4/01 and 

closed 5/04); 4024-2120-1476-7987 (opened 4/01 and closed 8/07); 46-7748-2837 (opened 2/02 and closed 4/02); 

46-5167-0047 (opened 8/02 and closed 3/07); 4356-8800-1453-2789 (opened 5/04 and closed 7/07); and 46-5902-

3450 (opened 5/05 and closed 7/07). Chart of Falcone-related accounts prepared by Bank of America for the 

Subcommittee investigation, BAC-PSI 07505. 
253 

father, Pierre Falcone Sr;1386 six for Iris Mendez de Montero, a relative of Ms. Falcone;1387 and 

one for Monthigne Corp., the Arizona corporation formed by Ms. Falcone.1388 The Falcones also 

maintained four safe deposit boxes at the bank1389 and several credit card accounts.1390 The first 

two Falcone accounts were opened in March 1989; the last was opened in May 2005.1391

Eight of these accounts saw much of the activity reviewed below. They include a joint 

account for Mr. and Ms. Falcone, Checking Account No. 2-7220-7365, sometimes referred to as 

the “household account” and used to pay expenses related to the Arizona residence;1392 two 

accounts used by Mr. Falcone, Checking Account No. 2-7220-6530 and Savings Account No. 

76761391;1393 an account used by Ms. Falcone, Checking Account No. 8-4603-5538;1394 a 

corporate checking account used by Monthigne Corp., Account No. 4671882187;1395 two 

accounts used by Mr. Falcone’s mother, Vincente Falcone, Account No. 2-7477-6027 and 

Account No. 46-5902-3450; 1396 and the account primarily used by Ms. Mendez, Account No. 

46-7426-9956. 

2005 Account Review. For the first fifteen years they were open, the Falcone accounts 

were subjected solely to routine account monitoring and did not attract any detailed examination 

by Bank of America, even after enactment of the 2001 Patriot Act which tightened AML 

controls. 

 

1386 Account No. 2-7220-7883 (opened 3/98 and closed 4/01). Chart of Falcone-related accounts prepared by Bank 

of America for the Subcommittee investigation, BAC-PSI 07505. See also 3/31/98 BOA account opening form, 

BOA-PSI-00022-23. 

1387 Account Nos. 2-7245-0445 (opened 6/98 and closed 2/01); 65-2002-6080-0065 (opened 8/98 and closed 

11/02);46-7426-9956 (opened 12/00 and closed 4/09); 46-7509-4560 (opened 12/00 and closed 1/01); 91-0000-

3332-1545 (opened 1/01 and closed 2/01) and 46-7077-1642 (opened 2/01 and closed 3/01). Chart of Falconerelated accounts prepared by Bank of America for the Subcommittee investigation, BAC-PSI 07505. Bank of 

America told the Subcommittee that it did not know the precise familial relationship between Iris Montero and 

Ms. Falcone. 

1388 Account No. 46-7188-2187 (opened 4/00 and closed 6/06). Chart of Falcone-related accounts prepared by Bank 

of America for the Subcommittee investigation, BAC-PSI 07505. 

1389 Mr. and Ms. Falcone had one joint safe deposit box, 82-5643-2084. Safe Deposit Box Lease Agreement, BOAPSI-00038-39; AML Case No. 2007014988 report, BAC-PSI 07620-21. Ms. Falcone had two additional safe 

deposit boxes, Box Nos. 82-5602-8151 and 82-5643-2084. Vincente Falcone also had a safe deposit box, Box No. 

83-3701-3122. It is unclear whether she shared this box with Mr. Falcone or his father. Compare Chart of Falconerelated accounts prepared by Bank of America for the Subcommittee investigation, BAC-PSI 07505, with AML 

Case No. 2007014988 report, BAC-PSI 07620-21. 

1390 See undated BOA AML Case No. 2007025689, BAC-PSI 07624 (identifying two credit card accounts for Ms. 

Falcone). 

1391 See Chart of Falcone-related accounts prepared by Bank of America for the Subcommittee investigation, BACPSI 07505. One of the Falcone accounts for Iris Mendez was closed in April 2009. Id. 

1392 See 1998 BOA account opening form, BOA-PSI-00020-21; 1998 BOA Master Agreement and IRS Certification 

Statement, BOA-PSI-00010-13. Mr. Falcone and his business associate, Gasper Devita, appear to have been added 

as signatories to this account about a month after it was opened. BOA Master Agreement and IRS Certification 

Statement, BOA-PSI-00018-19. 

1393 See 1997 BOA Master Agreement and IRS Certification Statement, BOA-PSI-00004-05. 

1394 See 1994 BOA account opening form, BOA-PSI-00028-29. 

1395 See 2002 BOA account opening form, BOA-PSI-03422-23. 

1396 See 4/27/01 BOA account opening form, BOA-PSI-05705-06; 6/17/04 Bank of New York Details of Payment, 

BNY 009108. 
254 

In October 2004, a Bank of America branch banking center noticed that a Falcone family 

member went to two different branches and made four cash withdrawals on the same day that 

together totaled $10,800, and expressed concern about an attempt to avoid a Currency 

Transaction Report that must be filed when cash withdrawals reach $10,000.1397 As a result, 

Bank of America decided to conduct a review of the Falcone accounts. 

The review was not initiated until November 2004, a month after the initial 

allegations.1398 The review was conducted by a Bank of America AML investigator who 

summarized her findings in an internal memorandum.1399 The memorandum appears to have 

been completed in August 2005, ten months after the October 2004 incident that triggered the 

review. 

The memorandum began by noting that an Internet search located many listings for 

Mr. and Ms. Falcone. With respect to Mr. Falcone, the memorandum stated: 

“Mr. Falone [is] a recognized billionaire arms dealer with strong French connections. 

Falcone served as a consultant to the French agency SOFREMI that is in charge of 

exporting military equipment under ... the French Interior Ministry. ... Falcone 

reportedly brokered numerous deals with Africa and South America through a company 

named Gaydamark, a company owned by a wealthy Russian billionaire and Falcone’s 

business partner. ... Falcone developed a very close and tight relationship with the 

government of Angola, so much, that he was even granted citizenship. ... Falcone was 

brought before a French court on charges of corruption for which he was indicted and 

sentenced to one year in jail. Additional charges were brought against Falcone but none 

could be substantiated or proven. Falcone was released and now lives with his wife in 

the most expensive home ever sold in the state of Arizona.”1400

The memorandum implied that Mr. Falcone’s criminal proceedings were over, but at the time it 

was written, the 2004 French arrest warrant for Mr. Falcone remained outstanding. With respect 

to Ms. Falcone, the memorandum described her as a “former beauty queen” and “one of the most 

sought out socialites in Arizona.”1401

The memorandum said that the accounts for Mr. and Ms. Falcone and Monthigne Corp. 

had been reviewed for a 19-month period from December 17, 2003 to July 13, 2005, and the 

Falcone account activity during that period, including credits and debits, totaled about $17 

million.1402 The memorandum also noted numerous, large, incoming and outgoing wire transfers 

affecting the accounts: 

 

1397 See undated BOA Global AML Operations report on Falcone accounts, BOA-PSI-04698-701; Subcommittee 

interview of Bank of America officials, March 25, 2009. Bank of America officials did not recall which Falcone 

family member made the cash withdrawals. 

1398 Id. 

1399 Id. 1400 Id. 1401 Id. 1402 Id. According to Bank of America, the bank’s review process at the time was to look at only 13 months of past 

account activity, even though this memorandum reviewed 19 months. The bank reported that it had since changed 

its policy to require reviews to look at account records for the past 4-5 years. Bank of America officials also noted 
255 

“The account reflects numerous incoming wires originated in France from entities that 

are directly related to the Falcone’s. Incoming wires are also evident in what appears to 

be proceeds of real estate sales and from loans obtained through other financial 

institutions. Debits to the account also show outgoing wires, they were conducted to 

benefit the Beverly Loan Company, as well as individuals sharing the same last name as 

the Falcone’s. Checks from the account show numerous inter-account transfers that 

reference ‘house account’ or ‘expenses’.” 

The memorandum concluded: 

“The activity for the accounts of the Falcone’s is not unusual. Although Mr. Falcone 

appears to have been involved in the dealing and sale of Arms, the activity for the 

accounts at Bank of America shows activity that is normal for this type of high profile 

customer. The transaction reported by the branch banking center appears to have been a 

one-time event.”1403 

The memorandum did not express any concern about the large-dollar transfers into the 

Falcone accounts from offshore jurisdictions or from unfamiliar entities such as AALL Trust and 

Banking Corp. in the Cayman Islands. It did not view $17 million in account activity within a 

year and a half as unusual. It characterized the accounts’ movement of hundreds of thousands of 

dollars at a time among a network of Falcone related accounts as “normal,” “not unusual,” and 

related to house expenses. The memorandum did not express any concerns about Mr. Falcone’s 

conviction on corruption charges, imprisonment, illegal arms dealing, or the sources of his 

wealth. 

The AML investigator forwarded her report to her supervisor. Together, the two 

determined that none of the transactions was suspicious.1404 In addition, despite Mr. Falcone’s 

involvement in arms trafficking, the large volume of account activity, and numerous foreign wire 

transfers, the two Bank of America officials did not designate the account as high risk or call for 

enhanced monitoring. They apparently never considered whether Mr. Falcone should be 

designated as a PEP client due to his close association with the French Interior Ministry, close 

association with Angolan President dos Santos, or his 2003 appointment as an Angolan 

Ambassador to UNESCO. 

When asked about the 2005 special review, Bank of America told the Subcommittee that 

the decision not to treat any of the transactions as suspicious was likely due to a number of 

factors, including that the Falcones were longstanding customers and a prominent family; the 

accounts did not involve extensive cash transactions; and large account transactions were not 

unusual for that type of client.1405 Bank of America also said that the memorandum “probably 

should have been escalated” to more senior personnel, but bringing in more senior personnel was 

 that the $17 million figure in the memorandum was approximately double the amount moving through the Falcone 

accounts because it took into consideration both credits and debits to the accounts. Subcommittee interview of Bank 

of America officials, March 25, 2009. 

1403 Undated BOA Global AML Operations report on Falcone accounts, BOA-PSI-04699. 1404 Id.; Subcommittee interview of Bank of America officials, March 25, 2009. 1405 Subcommittee interview of Bank of America officials, March 25, 2009. 
256 

a “judgment call.”1406 The internal investigation was closed on August 9, 2005, with no 

recommendation for any action to be taken with respect to the Falcone accounts.1407 

Two years later, in 2007, after the Subcommittee inquired about the Falcone accounts, 

Bank of America initiated another review of the accounts.1408 The resulting AML Case report 

described the Falcone accounts as held by persons “that have been named in various news 

articles as being involved in: arms sales; diamond smuggling and other illegal activities.” It 

discussed Mr. Falcone’s involvement in the Angolagate scandal. The report also analyzed 

specific Falcone account transactions stretching over a number of years, such as: “from 

03/13/2003 to 04/04/2007 Sonia Falcone has received 22 wires that totaled $4,950,794.67”; 

“Monthigne Corporation ... a dissolved corporation ... [received] 20 incoming wires that totaled 

$4,424,750.00 from 03/04/2003 to 02/10/2005”; and “63 wire transfers that totaled 

$10,040,463.01 from 03/03/2003 to 04/04/2007 [went] to account owned and/or controlled by 

members of the Falcone family.” 

In July 2007, Bank of America decided to close the Falcone accounts.1409 Bank of 

America expressed regret to the Subcommittee at having maintained accounts for a known arms 

dealer who, by July 2007, was under multiple criminal indictments in France.1410 

Suspicious Transactions. To conduct its own review of the Falcone accounts, the 

Subcommittee subpoenaed Bank of America records for the accounts covering an eight-year 

period, 1999 to 2007. These records disclosed a high level of account activity, including a 

number of suspicious transactions involving high dollar amounts, transfers to or from offshore 

secrecy jurisdictions, or the quick movement of funds through multiple accounts in a classic 

money laundering tactic designed to make it difficult for investigators to follow a money trail. 

Because a number of the transactions referenced wire transfers at other banks, the Subcommittee 

also initiated a limited review of some of those wire transfers, in particular at HSBC Equator 

Bank. A number of the transactions reviewed by the Subcommittee, detailed in a chart below, 

raised concerns. 

 One of Our Clients. One striking set of transactions involves wire transfers from 

foreign bank accounts sending large sums of money into the Falcone accounts in which the party 

who sent the funds is identified in the wire transfer documentation solely as “one of our clients” 

or “un client.” Federal law requires U.S. financial institutions to identify the name and address 

of the originator of each wire transfer, in part as an AML safeguard.1411 Yet from 1999 to 2003, 

Bank of America allowed accounts for Pierre, Sonia, and Vincente Falcone to receive over $3.6 

 

1406 Id. 1407 BOA Master Case Information, BOA-PSI-07697. 1408 Undated BOA AML Case No. 2007014988 report and undated BOA AML Case No. 2007025689, BAC-PSI 

07620-26. 

1409 See Chart of Falcone-related accounts prepared by Bank of America for the Subcommittee investigation, BACPSI 07505. 

1410 Subcommittee interview of Bank of America officials, March 25, 2009. 1411 See funds transfer rule and travel rule at 31 CFR 103.33. See also 1/17/07 FinCEN Report to Congress, 

“Feasibility of a Cross-Border Electronic Funds Transfer Reporting System,” at 8 (“these rules require U.S. financial 

institutions to obtain and maintain information about certain funds transfers that identifies, at a minimum: the name 

and address of the originator ....”).
257 

million in wire transfers from unnamed clients using accounts in such known secrecy 

jurisdictions as the Cayman Islands, Luxembourg, and Switzerland.1412 From September 2001 to 

December 2003, the Monthigne account also received a series of payments from hidden 

“clients,” ranging from $100,000 to $400,000 at a time, most often from “one of our clients” 

using a UBS account in Singapore. In just over two years, the payments to Monthigne added up 

to nearly $2.5 million.1413 

After Monthigne received one of the UBS Singapore payments, Ms. Falcone, who 

opened the Monthigne account and was its sole signatory, typically transferred the funds within a 

day or two to another Falcone account which, at times, transferred it within Bank of America to 

still another Falcone account, in what appears to be a classic money laundering pattern designed 

to make it difficult to trace a money trail. For example, as shown on the chart below, on 

February 15, 2002, the hidden client at UBS in Singapore sent $299,985 to the Monthigne 

account, which on the same day transferred the same amount to an Iris Mendez account within 

the branch, and that account, in turn, transferred $211,000 to a Sonia Falcone account within the 

branch.1414 This pattern of internal bank transfers could have been used to conceal from persons 

outside of the bank which Falcone account ultimately received the incoming wire transfer. 

Altogether, from 1999 to 2003, the Falcone accounts received about $6.1 million in 

foreign wire transfers from unidentified “clients.” When asked about these transactions, Bank of 

America told the Subcommittee that transactions involving unidentified “clients” could be seen 

as a “red flag,” but that each transaction would have to be examined in detail to determine 

whether it should be deemed suspicious.1415

Offshore Wire Transfers. A second set of troubling transactions involves high-dollar 

wire transfers from unfamiliar offshore entities into the Monthigne account. These transfers 

were made by the AALL Trust and Banking Corp. Ltd. which sent funds from the Cayman 

Islands; Culmen Investments which sent funds from Israel; Rego Holdings Inc. which sent funds 

from Israel; and Valley Marketing Ltd. which sent funds from the Cayman Islands.1416 

Moreover, the AALL Trust and Banking Corp. Ltd., which is a Cayman Island bank, was 

sending money to the Monthigne account on behalf of still other entities, which usually were not 

named but on two occasions were referred to as Apollo LLC, the Valley Trust, and the Alley 

Trust.1417 In most cases, the funds deposited into the Monthigne account remained there for only 

a day or two, and were then transferred by Ms. Falcone into another Falcone related account. 

For example, on October 8, 2004, as shown in the chart below, the AALL Trust and Banking 

Corp. wire transferred $315,000 to the Monthigne account; and later on the same day, Ms. 

 

1412 See Subcommittee chart below, Select Transactions Involving the Falcone Accounts At Bank of America, 1999 

to 2007. 

1413 Id. 1414 Id. 1415 Subcommittee interview of Bank of America officials, March 25, 2009. 1416 See Subcommittee chart below, Select Transactions Involving the Falcone Accounts At Bank of America, 1999 

to 2007. 

1417 See, e.g., 10/4/08 wire transfer for $315,000 from AALL Trust and Banking Corp. through correspondent 

accounts at Bank of Butterfield in the Caymans and Bank of New York, to the Monthigne account at Bank of 

America, with references to “Apollo, LLC” and “Valley Trust,” BOA-PSI-04054-56. 
258 

Falcone wrote a $275,000 check sending the funds to her Checking Account No. 2-7220-7365. 

The check contained a notation that the funds were for “household expenses.”1418 

Altogether, from 2002 to 2005, the Monthigne account received over $2.46 million in 

wire transfers from the AALL Trust and Banking Corp.; nearly $950,000 from Culmen 

Investment; nearly $200,000 from Rego Holdings; and nearly $250,000 from Valley Marketing, 

for a grand total of nearly $3.77 million.1419 When asked, Bank of America told the 

Subcommittee that it did not have any additional information about these entities or the specific 

wire transfers they sent to the Falcone accounts. 

Falcone Transfers. A third set of transactions that raised concerns involves large 

transfers of funds from one Falcone-related account to another, often across international lines. 

For example, as shown in the chart below, from 2004 to 2007, Mr. Falcone, at times sending 

wire transfers using his initials PJF, sent funds ranging from $100,000 to $550,000 from 

accounts he held at banks in South Africa, Portugal, and China, to Falcone accounts at Bank of 

America in Arizona.1420 On July 8, 2004, for instance, he sent $255,000 from a Falcone account 

at Coutts & Co. in the United Kingdom to one of his accounts at Bank of America in Arizona. 

On November 17, 2005, he sent $300,000 from an account he held at Banco Sol in Angola to an 

account held by Ms. Falcone at Bank of America. On November 10, 2006, he sent $550,000 

from his account at Banco BPI in Lisbon to that same account at Bank of America. On August 

20, 2007, Mr. Falcone sent $250,000 from his account at Citic ka wah Bank Ltd. in Hong Kong 

to an Iris Mendez account at Bank of America. The reasons for these transfers are unclear. 

Similar questions apply to a series of wire transfers from the Falcone accounts in Arizona 

to a U.S. bank account in Utah opened in the name of Essante Inc., the health and beauty 

business associated with Ms. Falcone. From 2000 to 2002, Bank of America accounts belonging 

to Ms. Falcone, Vincente Falcone, Iris Mendez, and Monthigne sent multiple wire transfers to an 

Essante account at Zion’s First National Bank in Salt Lake City, Utah, together providing nearly 

$1.2 million to that account.1421 Bank of America was unable to explain why the Falcones sent 

those funds to the Utah company. 

Also raising questions are multiple high-dollar funding transfers between the Iris Mendez 

and Sonia Falcone accounts at Bank of America. As shown in the chart below, from January 

2001 to February 2002, Ms. Mendez made multiple high-dollar transfers from her account to 

Ms. Falcone’s account, in amounts ranging from $50,000 to $211,000.1422 For example, on 

January 24, 2001, the Mendez account sent $100,000 to the account belonging to Ms. Falcone. 

On May 25, 2001, the Mendez account sent her another $175,000. On February 15, 2002, she 

sent $211,000. Then these transfers stopped. Altogether, Ms. Mendez transferred about 

$950,000 to Ms. Falcone in just over a year. Bank of America told the Subcommittee that it 

could not explain why these transfers took place. 

 

1418 10/8/04 Monthigne check for $275,000, BOA-PSI-03828. 

1419 Undated BOA AML Case No. 2007014988 report, BAC-PSI 07621; Subcommittee chart below, Select 

Transactions Involving the Falcone Accounts At Bank of America, 1999 to 2007. 

1420 See Subcommittee chart below, Select Transactions Involving the Falcone Accounts At Bank of America, 1999 

to 2007. 

1421 Id. 1422 Id. 
259 

These transactions make it clear that the Falcones have an extensive network of bank 

accounts in the United States and around the world. Their Bank of America records show that 

they actively moved money throughout this network. The reasons for the high volume of 

funding transfers are unclear, and Bank of America did not ask or acquire an understanding of 

them. 

CADA Wire Transfers. A fourth set of troubling transactions involves large wire 

transfers to and from Companhia Angolana de Distribuicao Alimentar Inc., or CADA, an 

Angolan corporation which, according to the 2007 French Angolagate indictment, was an 

affiliate of the Brenco Group controlled by Mr. Falcone and Mr. Gaydamak and was involved in 

their wrongdoing.1423 

 CADA had an account at HSBC Equator Bank until 2001.1424 HSBC told the 

Subcommittee that the CADA account signatories were Mr. Falcone, Mr. Gaydamak, and Andre 

de Fiori, one of their business associates.1425 Bank of America records show that, in 2000, 

CADA wire transferred a total of $1,410,000 from its HSBC Equator Bank account to a Falcone 

account at Bank of America.1426 In addition, in November 2000, CADA wire transferred 

$9,030,000, in two installments, from its HSBC Equator Bank account to a Brenco account at 

Discount Bank and Trust account in Geneva, Switzerland.1427 In July 2001, the CADA account 

at HSBC Equator Bank received a wire transfer for more than $20.8 million from Sonangol, the 

Angolan state oil company, using an account at Lloyds Bank in London.1428

 Given CADA’s role in the Angolagate criminal prosecution, its transfers to the Falcones 

at Bank of America and the Falcone-related company Brenco raise concerns. So does the 

transfer of over $20 million from Sonangol, the Angolan state oil company, into CADA’s 

account. 

Beverly Loan Company. A fifth set of notable transactions involves the Beverly Loan 

Company. The Beverly Loan Company is an upscale pawn shop specializing in providing large 

loans secured by fine jewelry and watches.1429 It has been in business in Beverly Hills, 

 

1423 See Ordonnance De Renvor Devant le Tribunal Correctionnel Non-Lieu Partiel et Requalification, No. du 

Parquet: 0019292016, No. Instruction: 2076/00/40 (2007), at 101. HSBC told the Subcommittee that Brenco 

International was owned by the Atlantic Transangolan Corporation which, in turn, was owned by Pierre Falcone and 

Arcadi Gaydamak. Subcommittee interview of HSBC officials, June 13, 2007. 1424 Subcommittee interview of HSBC officials, May 7, 2008. HSBC purchased Equator Bank plc in London and 

for many years provided it with a correspondent account in New York. The Subcommittee subpoenaed Falconerelated wire transfer records associated with the Equator Bank account at HSBC. 1425 Subcommittee interview of HSBC officials, May 7, 2008. The Global Witness report states: “Companies House 

documents show that CADA Ltd. in London is located at 40 Queen Anne Street, London W1. CADA Ltd was 

established in 1996 and Andre de Fiori is listed as Director. The Company is listed as a subsidiary of a company 

called Copper Financial Inc. located in Tortola, British Virgin Islands, the latter having been established by Henry 

Guderley, who is also listed as Company Secretary of London-based CADA Ltd.” All The Presidents’ Men, Global 

Witness, at 20. 

1426 See HSBC Excel spreadsheet, Box 13, CADA, no bates number. 1427 Id. 1428 Id. 

1429 See www.beverlyloan.com. Loans from Beverly Loan Company work generally as follows. Customers bring to 

the Beverly Loan Company collateral to be pawned, at which time it is assessed by resident gemologists. Beverly 

Loan Company makes a determination of the maximum loan amount, based upon valuation of the product and 
260 

California since 1938. Bank documents reviewed by the Subcommittee, summarized in the chart 

below, show numerous transfers between the Beverly Loan Company and the Falcone accounts. 

For example, from May 2001 to June 2007, Beverly Loan Company made multiple wire transfers 

to Ms. Falcone, ranging in amounts from $50,000 to $550,000.1430 In the month of February 

2007, it sent her three wire transfers totaling $257,000. It also sent one wire transfer on May 25, 

2001, to Iris Mendez for $360,000, and one on July 19, 2001, to Mr. Falcone for $259,700. 

Ms. Falcone also sent numerous large wire transfers to the Beverly Loan Company in amounts 

ranging from $55,000 to $300,000. 

When asked about these transactions, the Beverly Loan Company informed the 

Subcommittee that Ms. Falcone had been a regular customer since at least 2001, and as of April 

2008, had ten outstanding loans in her name or that of her assistant, Elizabeth Kordek.1431 

According to the Beverly Loan Company, altogether since 2001, Ms. Falcone had borrowed over 

$3.2 million in her own name, and an additional $4.1 million in the name of her assistant, for a 

grand total of over $7.3 million, while paying interest charges on those loans in excess of 

$777,000.1432 The Subcommittee was told that, although one Beverly Loan Company check was 

made out to Mr. Falcone, no loans had been issued to him. The Beverly loans were a regular 

source of funds for the Falcone accounts from 2001 to 2007. 

Triang Business Venture. Finally, while examining the Falcone accounts and looking 

in particular at transactions involving Angola, the Subcommittee interviewed HSBC about a 

number of wire transfers involving HSBC Equator Bank and Falcone-related entities. As part of 

that process, the Subcommittee learned that for a seven-year period, from 1997 to 2004, an 

HSBC affiliate had participated in a joint business venture in Angola with Mr. Falcone through a 

company called Triang Ltd. According to HSBC, Triang Ltd. was incorporated in May 1997, in 

the Bahamas, and for the next seven years ran a trucking operation that transported fuel for the 

diamond industry in Angola.1433 HSBC told the Subcommittee that ownership of Triang was as 

follows: Brenco held a 30% ownership interest; Jose Recio, an Angolan businessman, held a 

35% ownership interest; and the final 35% ownership interest was held by Equator Bank Ltd., a 

Bahamas bank affiliated with HSBC Equator Bank plc in London.1434 HSBC told the 

Subcommittee that Brenco was owned by the Atlantic Transangolan Corporation which, in turn, 

 potential for liquidity in case the collateral is not redeemed and foreclosure is authorized. A police report is filed 

and the goods are checked to make sure they are not stolen. Customers are given a loan for a requested amount up to 

the maximum loan amount. The loan is typically disbursed by wire, cashiers check, or bank check. 

The initial loan contract is four months in length or roughly 120 days. For loans valued at less than $2,500, the 

interest rate is capped at 4% per month (48% APR) under California law. The interest rate on larger loans is 

discretionary. If the property is not redeemed within four months, Beverly Loan Company may foreclose on it, issue 

another four-month contract, write-off the loan amount, or roll a portion of the residual loan amount into a new loan 

on different collateral. Collateral may be redeemed by the customer when the loan is paid in full. Subcommittee 

interview of Beverly Loan Company officials, March 24, 2008; www.beverlyloan.com. 

1430 See Subcommittee chart below, Select Transactions Involving the Falcone Accounts At Bank of America, 1999 

to 2007. 

1431 Subcommittee interview of Beverly Loan Company officials, March 24, 2008. 1432 Note: the chart lists numerous payments to and from Beverly Loan Company but does not contain transactional 

information, because the Subcommittee does not possess all transactional data. 1433 Subcommittee interview of HSBC officials, June 13, 2007. 1434 Id. 
261 

was owned by Pierre Falcone and Arcadi Gaydamak.1435 HSBC indicated that Equator Bank 

Ltd. maintained its ownership interest in Triang until 2004, when it sold its interest to Jose 

Recio. HSBC told the Subcommittee that, during Equator Bank’s ownership of Triang, it also 

contributed $4 million to its operations, $3.9 million of which was in the form of a loan in 

1997.1436 

HSBC told the Subcommittee that it had conducted an investigation of Pierre Falcone 

during the period 2000 to 2001, and closed his accounts, but did not exit its business relationship 

with him until 2004.1437 As noted previously, Pierre Falcone was in jail in France from 

December 2000 to December 2001, under investigation for illegal arms trafficking, tax evasion, 

and other misconduct. 

(3) Analysis 

Each category of transactions just described raises questions about the purpose and 

source of funds that went through the Falcone accounts at Bank of America. These transactions 

included wire transfers from known secrecy jurisdictions, the quick movement of funds from one 

Falcone account to another, and transfers to and from obscure offshore corporations and 

unnamed clients. Yet none of these transactions, separately or collectively, triggered an account 

review by Bank of America officials. Even when some of the transactions were examined as 

part of a 2005 special review initiated for another reason, they were not viewed as raising 

sufficient red flags to have the account designated as high risk or warrant enhanced monitoring. 

Nor did they cause Bank of America to treat Mr. Falcone as a PEP client subject to enhanced 

monitoring. 

The following chart presents a selection of troubling transactions involving the Falcone 

accounts at Bank of America and a few Falcone-related wire transfers which, over an eight-year 

period, moved over $60 million in suspect funds into or through U.S. banks. These transactions 

provide concrete evidence that U.S. financial institutions need to establish better account 

monitoring tools to identify high-risk accounts and high-risk wire transfers. These transactions 

also demonstrate that U.S. financial institutions need to be on the lookout for PEP clients using 

retail accounts, in addition to accounts in the Private Bank established for wealthy clients. 

Select Transactions Involving the Falcone Accounts

At Bank of America, 1999 to 2007

Date Originator Beneficiary Amount Bates

11/16/99 “un Client” at Banque Intl. A

Luxembourg S.A

Vincente Falcone Account $       200,000.00 BNY 009108

11/24/99 “un client” at Banque

Internationale

Falcone Household Account

272207365 $       200,000.00 BOA‐PSI‐02426

2/11/00 Vincente Falcone Account  

274776027

Essante Account at  

Zions First National Bank $         70,000.00 BOA‐PSI‐06125

 

1435 Id. 1436 Subcommittee interview of HSBC officials, May 2, 2008. 1437 Id., May 7, 2008. HSBC reported that the reason for the three-year delay in exiting the business venture was 

because it had difficulty selling its shares in Triang. 
262 

2/28/00 Vincente Falcone Account  

274776027

Essante Account at  

Zions First National Bank $       300,000.00 BOA‐PSI‐06125

2/28/00

“one customer” at Discount

Bank and Trust in Geneva,

Switzerland

Sonia Falcone Account

846035538 $         79,975.00 BOA‐PSI‐02918

4/24/00 Pierre Falcone Account  

7676139 writes check Caesar’s Palace $         50,000.00 BOA‐PSI‐03746

6/02/00 Discount Bank and Trust at

Israel Discount Bank

Falcone Household Account  

272207365 $       179,985.00 BOA‐PSI‐02451

6/29/00 Companhia Angolana at HSBC

Equator Bank

Falcone Household Account

272207365 $       160,000.00 BOA‐PSI‐02458

7/14/00 Pierre Falcone Account

7676139 Steinway Hall $         50,000.00 BOA‐PSI‐03748

8/10/00

“one customer” at Discount

Bank Grand Cayman Ltd thru

Discount Bank and Trust

Company Luxembourg thru

Chase Manhattan bank

Sonia Falcone Account

846035538 $       119,982.00 BOA‐PSI‐07650

8/10/00 “one customer” at Chase

Manhattan Bank.

Falcone Household Account

272207365 $       169,982.00 BOA‐PSI‐02466

8/16/00 Pierre Falcone Account

7676139 writes check Bellagio $         70,500.00 BOA‐PSI‐03747

9/28/00 CADA at HSBC Equator Argo Particpacoes Ltd. at Bank Safra

Brasil $         80,000.00 Final_Version.xls,CADA tab (HSBC)

10/11/00 CADA at HSBC Andre de Fiori at Banque Safra $       100,000.00 Final_Version.xls,

CADA tab (HSBC)

10/12/00 “one customer” at Chase

Manhattan Bank

Falcone Household Account

272207365 $       189,982.50 BOA‐PSI‐02481

11/07/00

Companhia Angolana at HSBC

Equator

wire reference to “CADA pymt”

Falcone Household Account

272207365 $       340,000.00 BOA‐PSI‐02489

11/7/00 CADA at HSBC Equator Pierre Falcone Account $       170,000.00 Final_Version.xls,

CADA tab (HSBC)

11/7/00

CADA at HSBC Equator

Bank Sonia Falcone Account

846035538 $       250,000.00

BOA‐PSI‐07566,

Final_Version.xls,

CADA tab (HSBC)

11/7/00 CADA at HSBC Equator

Bank

Brenco Group at Discount Bank and

Trust Co. Geneva $  6,730,000.00 Final_Version.xls,CADA tab (HSBC)

11/16/00 CADA at HSBC Equator

Bank

Brenco Group at Discount Bank and

Trust Geneva $  2,300,000.00 Final_Version.xls,CADA tab (HSBC)

12/04/00

“one customer” at Discount

Bank (CI) Limited Grand Cayman

thru Discount Bank and Trust Co

Luxembourg (thru Chase

Manhattan)

Sonia Falcone Account

846035538 $    1,299,982.50 BOA‐PSI‐07572

12/4/00 “one customer” at Chase

Manhattan

Falcone Household Account

272207365 $       249,982.50 BOA‐PSI‐02497

12/14/00 CADA at HSBC Equator Pierre Joseph Falcone at Banco Safra,

Brazil $       490,000.00 Final_Version.xls,CADA tab (HSBC)

12/28/00 Sonia Falcone Account  

846035538 Used to purchase cashiers check $       404,920.00 BOA‐PSI‐04065

1/24/01 Iris Mendez Account

4674269956

Sonia Falcone Account

846035538 $       100,000.00 BOA‐PSI‐07540‐07555

1/24/01 Sonia Falcone Account  

846035538

Essante Account at

Zion’s First National Bank $       100,000.00 BOA‐PSI‐07578

2/22/01 “by Order of Client” at Bank

Luxembourg.

Iris Mendez Account

4674269956 $       500,000.00 BOA‐PSI‐07664
263 

2/23/01 Iris Mendez Account

4674269956

Sonia Falcone Account  

846035538 $         66,813.00 BOA‐PSI‐07540‐07555

2/23/01 Iris Mendez Account

4674269956

Pierre J. Falcone Account  

272206530 $         50,000.00 BOA‐PSI‐07540‐07555

2/26/01 Iris Mendez Account

4674269956

Sonia Falcone Account

846035538 $         50,000.00 BOA‐PSI‐07540‐

07555

2/27/01 Sonia Falcone Account  

846035538

Essante Account at

Zions First National Bank $         50,000.00 BOA‐PSI‐07595

2/28/01 Iris Mendez Account

4674269956

Sonia Falcone Account

846035538 $       100,000.00 BOA‐PSI‐07540‐07555

3/20/01 “Order of Client” at Bank Leumi Iris Mendez Account

4674269956 $       200,000.00 BOA‐PSI‐07671

3/21/01 Iris Mendez Account

4674269956

Sonia Falcone Account

846035538 $       100,000.00

BOA‐PSI‐07540‐

07555

5/25/01 Beverly Loan Co. Iris Mendez Account

4674269956 $       360,000.00 BOA‐PSI‐07678

5/25/01 Iris Mendez Account

4674269956

Sonia Falcone Account

846035538 $       175,000.00 BOA‐PSI‐07540

5/29/01 Sonia Falcone Account  

846035538

Essante Account at

Zions First National Bank $       175,000.00 BOA‐PSI‐07603

7/13/01 Iris Mendez Account

4674269956

Essante Account at

Zions First National Bank $       100,000.00 BOA‐PSI‐07680

7/19/01 Iris Mendez Account

4674269956

Essante Account at

Zions First National Bank $         60,000.00 BOA‐PSI‐07682

7/19/01

Bank of America cashiers check

from Beverly Loan Co. written to

Pierre Joseph Falcone

Pierre Joseph Falcone $       259,700.00 BOA‐PSI‐04075,

07529‐07531

7/20/01 Sonia Falcone Account  

846035538

American Express Service Europe Ltd

London at Lloyds Bank London “for

further credit‐Pierre Falcone

$         70,000.00 BOA‐PSI‐07611

7/20/01 Sonangol Account at Lloyds

Bank London

CADA Account at  

HSBC Equator Bank $20,834,269.00 Final_Version.xls,CADA tab (HSBC)

9/5/01 “one of our clients” at UBS

Singapore

Monthigne Account  

4671882187 $         99,985.00 BOA‐PSI‐03984

9/28/01 “one of our clients” at UBS

Singapore

Monthigne Account  

4671882187 $       199,985.00 BOA‐PSI‐03986

9/29/01 Iris Mendez Account

4674269956

Essante Account at  

Zions First National Bank $         30,000.00 BOA‐PSI‐07190

10/1/01 Iris Mendez Account

4674269956

American Express at Lloyds Bank for

Pierre Falcone $         15,000.00 BOA‐PSI‐

06209/07633

10/1/02 “one of our clients” UBS

Singapore

Vincente Falcone Account

274776027 $         99,985.00 BOA‐PSI‐06209/07633

10/17/01 Sonia Falcone Account  

846035538

Essante Account at  

Zions First National Bank $         60,000.00 BOA‐PSI‐07616

10/21/01 “one of our clients” at UBS

Singapore

Monthigne Account  

4671882187 $         99,985.00 BOA‐PSI‐03986

11/6/01 Monthigne Account  

4671882187

Iris Mendez Account

4674269956 $         82,485.00 BOA‐PSI‐07540‐07555

11/7/01 Iris Mendez Account

4674269956

Falcone Household Account

272207365 $         60,500.00 BOA‐PSI‐07540‐07555

11/16/01 Essante Account at  

Zions First National Bank

Iris Mendez Account

4674269956 $       100,000.00 BOA‐PSI‐07684

11/23/01 “one of our clients” UBS

Singapore

Monthigne Account  

4671882187 $       118,202.00 BOA‐PSI‐03992

11/27/01 Iris Mendez Account

4674269956

Falcone Household Account  

272207365 $       101,000.00 BOA‐PSI‐07540‐07555
264 

11/27/01 “one of our clients” UBS

Singapore

Monthigne Account  

4671882187 $         99,985.00 BOA‐PSI‐03990

12/4/01 Monthigne Account

4671882187

Iris Mendez Account

4674269956 $         93,985.00 BOA‐PSI‐07540‐07555

12/26/01 Monthigne Account

4671882187

Iris Mendez Account

4674269956 $         99,985.00 BOA‐PSI‐07540‐

07555

1/18/02 Essante Account at

Zions First National Banks

Iris Mendez Account

4674269956 $         50,000.00 BOA‐PSI‐07686

2/6/02 Gota at Bank Hapoalim in Tel

Aviv

Sonia Falcone Account  

846035538 $       199,975.00 BOA‐PSI‐07623

2/15/02 “one of our clients” at UBS

Singapore

Monthigne Account  

4671882187 $       299,985.00 BOA‐PSI‐03994

2/15/02 Monthigne Account

4671882187

Iris Mendez Account

4674269956 $       299,985.00 BOA‐PSI‐0740‐7555

2/15/02 Iris Mendez Account

4674269956

Falcone Household Account  

272207365 $       211,000.00 BOA‐PSI‐07450‐07555

2/15/02 Iris Mendez Account

4674269956

Essante Account at  

Zions First National Bank $         50,000.00 BOA‐PSI‐07688

3/1/02 “One of our clients” at UBS

Singapore

Monthigne Account   

4671882187 $         99,985.00 BOA‐PSI‐03996

4/18/02 “One of our clients” at UBS

Singapore

Vincente Falcone Account  

274776027 $         99,985.00 BOA‐PSI‐07635

5/6/02 “One of our clients” at UBS

Singapore

Monthigne Account

4671882187 $         99,850.00 BOA‐PSI‐03998

5/21/02 “One of our clients” at UBS

Singapore

Monthigne Account  

4671882187 $       109,985.00 BOA‐PSI‐0400

6/4/02 “One of our clients” at UBS

Singapore

Monthigne Account  

4671882187 $         99,985.00 BOA‐PSI‐04002

6/7/02 Monthigne Account  

4671882187

Sonia Falcone Account  

272206530; check payable to:  

Sonia M. Falcone/Gasper DeVita

$         80,000.00 BOA‐PSI‐03772

7/2/02 “One of our clients” at UBS

Singapore

Monthigne Account  

4671882187 $         99,985.00 BOA‐PSI‐04004

7/8/02 Monthigne Account  

4671882187

Essante Account at

Zions First National Bank $       115,000.00 BOA‐PSI‐04006

7/8/02 Monthigne Account  

4671882187 writes check

Falcone Household Account  

272207365 $         76,000.00 BOA‐PSI‐03774

7/30/02 “One of our clients” at UBS

Singapore

Monthigne Account  

4671882187 $         99,985.00 BOA‐PSI‐04009

9/4/02 “One of our clients”at UBS

Singapore Monthigne Account 004671882187 $         99,985.00 BOA‐PSI‐04011

9/4/02 Monthigne Account   

4671882187 writes check

Falcone Household Account  

272207365 $         92,488.31 BOA‐PSI‐03776

10/2/02 “One of our clients” at UBS

Singapore

Monthigne Account  

4671882187 $         99,985.00 BOA‐PSI‐04013

10/2/02 Monthigne Account  

4671882187 writes check

Falcone Household Account  

272207365 $         70,000.00 BOA‐PSI‐03778

11/20/02 Cashiers check from Beverly

Hills Loan Co.

Sonia Falcone Account  

846035538 $       100,000.00 BOA‐PSI‐04084

12/10/02 Carlton at Israel Discount Bank Sonia Falcone Account  

846035538 $       199,980.00 BOA‐PSI‐07536‐7

12/10/02 Sonia Falcone Account  

846035538 writes check

Falcone Household Account  

272207365 $       100,000.00 BOA‐PSI‐03779‐80

12/11/02 “One of our clients” at UBS AG

Vincente Falcone Account

274776027 $         99,985.00 BOA‐PSI‐07637
265 

12/11/02 “One of our clients” at UBS

Singapore

Monthigne Account  

4671882187 $       210,985.00 BOA‐PSI‐04015

12/12/02 Monthigne Account  

4671882187 writes check

Falcone Household Account   

272207365 $         85,000.00 BOA‐PSI‐03782

12/13/02 Monthigne Account  

4671882187 writes check

Sonia Falcone Account  

846035538 $       100,000.00 BOA‐PSI‐04086

1/31/03 Beverly Hills Loan Co.   

writes check

Sonia Falcone Account  

846035538 $       149,000.00 BOA‐PSI‐04088‐9

2/6/03 Sonia Falcone Account  

846035538 writes check

Falcone Household Account  

272207365 $       170,000.00 BOA‐PSI‐03786

2/25/03 Culmen Investment at Bank

Hapoalim in Tel Aviv

Monthigne Account  

4671882187 $       229,975.00 BOA‐PSI‐04017

2/27/03 Monthigne Account  

4671882187 writes check

Falcone Household Account  

272207365 $       132,120.91 BOA‐PSI‐03788

2/28/03 Monthigne Account  

4671882187 writes check

Sonia Falcone Account  

846035538 $         82,000.00 BOA‐PSI‐04091

2/6/03 Gota at Bank Hapoalim Sonia Falcone Account  

846035538 $       199,975.00 BOA‐PSI‐04070

2/14/03 Carlton Orig. Bank at Israel

Discount Bank Ltd.

Vincente Falcone Account  

274776027 $         99,980.00 BOA‐PSI‐07639

3/4/03 Culmen Investment at Hapoalim

Bank Israel

Monthigne Account

4671882187 $       209,975.00 BOA‐PSI‐04019

4/10/03 Culmen Investment at Bank

Hapoalim Israel

Monthigne Account   

4671882187 $         74,975.00 BOA‐PSI‐04021

4/10/03 Monthigne Account  

4671882187 writes check

Falcone Household Account  

272207365 $         52,400.00 BOA‐PSI‐03762

5/13/03 Culmen Investment at Bank

Hapoalim Israel

Monthigne Account  

4671882187 $       129,975.00 BOA‐PSI‐04023

5/13/03 Monthigne Account  

4671882187 writes check

Sonia Falcone Account  

272207365 $         85,000.00 BOA‐PSI‐03784

6/2/03 Pierre Falcone Account

272206530 Beverly Loan Co. $         75,925.00 BOA‐PSI‐03871

6/5/03 Unidentified account at Bank

Hapoalim in Israel

Monthigne Account

4671882187 $       159,975.00 BOA‐PSI‐04025

6/5/03 Monthigne Account  

4671882187 writes check  

Falcone Household Account  

272207365 $       112,000.00 BOA‐PSI‐03796

7/11/03 Beverly Hills Loan Co.  

writes check to

Sonia Falcone Account   

846035538 $         60,000.00 BOA‐PSI‐04094‐6

8/4/03 Culmen Investments at Bank

Hapoalim Isreael

Monthigne Account  

4671882187 $       299,975.00 BOA‐PSI‐04027

8/4/03 Monthigne Account

4671882187 Sonia Falcone Account         84603558 $       200,000.00 BOA‐PSI‐04097

8/4/03 Monthigne Account  

4671882187

Falcone Household Account

272207365 $         74,500.00 BOA‐PSI‐03798

8/6/03

Sonia Falcone Account

846035538  

writes cashiers check

To Beverly Loan Company $       119,000.00 BOA‐PSI‐04071

9/16/03 Culmen Investment at Bank

Hapoalim Israel

Monthigne Account  

4671882187 $         99,975.00 BOA‐PSI‐04029

9/16/03 Monthigne Account

4671882187 writes check  

Falcone Household Account

272207365 $         75,000.00 BOA‐PSI‐03691

9/22/03 Rego Holding Inc. at Bank

Hapoalim

Monthigne Account  

4671882187 $       199,975.00 BOA‐PSI‐03962

9/22/03 Monthigne Account  

4671882187 writes check   Sonia Falcone Account 846035538 $         67,000.00 BOA‐PSI‐036963

10/24/03 Culmen Investment at Bank

Hapoalim

Monthigne Account  

4671882187 $       109,975.00 BOA‐PSI‐04033
266 

10/24/03 Monthigne Account  

4671882187

Falcone Household Account

27207365 $         50,000.00 BOA‐PSI‐03804

12/23/03 “One of our clients” at Discount

Bank Ltd in the Cayman Islands

Monthigne Account  

4671882187 $       399,975.00 BOA‐PSI‐04035

1/9/04 Culmen Investment at Bank

Hapolaim

Vincente Falcone

274776027 $       100,000.00 BOA‐PSI‐07641

1/26/04 Valley Marketing Ltd. at

Discount Bank Ltd Cayman

Monthigne Account  

4671882187 $       249,975.00 BOA‐PSI‐04037

1/26/04 Monthigne Account   

4671882187 writes check  

Falcone Household Account  

272207365 $       158,000.00 BOA‐PSI‐04799

2/10/04 AALL Trust and Banking at Bank

Butterfield in Cayman Islands

Monthigne Account

4671882187 $       500,000.00 BNY 004685

2/11/04 Monthigne Account  

4671882187

Falcone Household Account  

272207365 $       204,000.00 BOA‐PSI‐03810

4/13/04

AALL Trust and Banking Co. at

Bank of Butterfield International

Cayman Islands thru Bank of NY

Vincente  Falcone Account  

274776027 $       200,000.00 BOA‐PSI‐06752

4/19/04 Beverly Hills Loan Co.

writes check to

Sonia Falcone Account 846035538 $         60,000.00 BOA‐PSI‐04101‐2

4/21/04 AALL Trust and Banking Monthigne Account  

4671882187 $       150,000.00 BOA‐PSI‐04039

4/21/04 Monthigne Account   

4671882187 writes check  

Falcone Household Account  

272207365 $         80,367.64 BOA‐PSI‐03816

5/28/04

AALL Trust and Banking Corp. at

Bank of Butterfield International

Cayman Islands

Monthigne Account  

4671882187 $       350,000.00 BOA‐PSI‐04042

6/1/04 Monthigne Account  

4671882187 writes check  

Falcone Household Account  

272207365 $       305,000.00 BOA‐PSI‐03818

6/4/04 Falcone Household Account

272207365 Beverly Loan Co. $       113,410.00 BOA‐PSI‐03875

6/17/04 AALL Trust and Banking Corp.

Ltd.

Vincente Falcone Account

4659023450 $       200,000.00 BOA‐PSI‐07645

7/8/04

Pierre J. Falcone Esquire/Sonia

Falcone account at Coutts &

Company in England through

Bank of New York

Vincente and Pierre Falcone Account

Number

76761391   

$       255,158.34 BOA‐PSI‐03866   

7/16/04 AALL Trust and Banking Corp. Monthigne Account  

4671882187 $       100,000.00 BOA‐PSI‐04045

7/16/04 Beverly Loan cashiers check Sonia Falcone Account 846035538 $         60,000.00 BOA‐PSI‐04102‐4

7/19/04 Monthigne Account  

4671882187 writes check

Falcone Household Account  

272207365 $         77,797.16 BOA‐PSI‐03820

7/28/04 AALL Trust and Banking Corp. Monthigne Account  

4671882187 $       350,000.00 BOA‐PSI‐04048

8/2/04 Monthigne Account  

4671882187  

Falcone Household Account  

272207365 $       300,000.00 BOA‐PSI‐03822

8/2/04 Falcone Household Account

272207365 writes check Beverly Loan Co. $         62,509.00 BOA‐PSI‐035757‐8

8/16/04 AALL Trust Monthigne Account  

4671882187 $       200,000.00 BOA‐PSI‐04051

10/8/04 AALL Trust by order Apollo LLC,

Valley Trust

Monthigne Account

4671882187 $       315,000.00 BOA‐PSI‐04054

10/8/04 Monthigne Account   

4671882187 writes check

Falcone Household Account  

272207365 Check memo says

“household expenses”

$       275,000.00 BOA‐PSI‐04781

11/18/04

AALL Trust and Banking Corp. By

order Apollo LLC and ref: alley

trust

Monthigne Account  

4671882187 $       250,000.00 BOA‐PSI‐04057
267 

11/18/04 Monthigne Account  

4671882187 writes check

Falcone Household Account  

272207365 $       225,000.00 BOA‐PSI‐03829‐30

12/20/04 Pierre Falcone Account  

76761391 writes check Sonia Falcone $       100,000.00 BOA‐PSI‐04834

12/22/04 Pierre Falcone Account  

76761391 writes check Sonia Falcone $       100,000.00 BOA‐PSI‐04834

1/18/05 Pierre Falcone Account

76761391 writes check Sonia Falcone $         45,000.00 BOA‐PSI‐04836

2/10/05 AALL Trust & Banking Corp. Monthigne Acount  

4671882187 $       250,000.00 BOA‐PSI‐04060

2/10/05 Monthigne Account  

4671882187 writes check

Falcone Household Account  

272207365 $       250,000.00 BOA‐PSI‐04780,03974

4/4/05 Beverly Loan Co. writes check Sonia Falcone $       189,000.00 BOA‐PSI‐03838

4/12/05 Equity Title Agency Inc. at

National Bank of AZ

Falcone Household Account  

272207365 $       500,000.00 BOA‐PSI‐03878

4/12/05 Abecassis Jacques at Banco

Nactional de Costa Rica

Falcone Household Account  

272207365 $       280,000.00 BOA‐PSI‐03881

4/15/05 Falcone Household Account

272207365 Beverly Loan Co. $       205,000.00 BOA‐PSI‐03884

8/4/05 American Express Ltd. at Banco

Portugues de Negocios Sonia Falcone Account 272207365 $       349,960.00 BOA‐PSI‐03887

8/16/05 Falcone Household Account

272207365 writes check Beverly Loan Co. $         55,000.00 BOA‐PSI‐03761

9/16/05 Beverly Loan Co. Sonia Falcone Account 8460355538 $         51,319.00 BOA‐PSI‐04188

9/21/05

Unidentified account at

Firstrand Bank Ltd. at Banco Sol

in Johannesburg.  Wire info

notes “by order PJF Luanda ACC

2811262151.”

Falcone Household Account  

272207365 $       199,980.00 BOA‐PSI‐03890

9/23/05 Falcone Household Account

272207365 Beverly Loan Co. $         82,480.00 BOA‐PSI‐03893

11/17/05 Banco Sol Sarl in Angola “By

order PJF”

Falcone Household Account  

272207365 $       299,970.00 BOA‐PSI‐03896

11/18/05 Falcone Household Account

272207365 Beverly Loan Co. $         99,120.00 BOA‐PSI‐03899

12/14/06 Levin and Schreder at JPM

Chase

Falcone Household Account  

272207365 $    1,050,000.00 BOA‐PSI‐03902

12/15/05

Gitana Finance/American

Express Bank Ltd. at Banco Sol

Sarl in Luanda

Sonia Falcone Account

272207365 $       199,905.00 BOA‐PSI‐03905

12/20/05

Charleston Hotels Group at

Banco de Bogota in Bogota

Colombia

Falcone Household Account  

272207365 $       200,000.00 BOA‐PSI‐03908

1/19/06 Charleston Hotels Group Inc. Falcone Household Account  

272207365 $       100,000.00 BOA‐PSI‐03911

1/26/06 Levin & Schreder at JPM Falcone Household Account  

272207365 $       220,000.00 BOA‐PSI‐03912

3/3/06 Pierre Joseph Falcone at Citic Ka

Wah Bank Ltd. in Beijing

JK Gruner and Associates Ltd. at

Suntrust Bank, VA.  Instructions note:

“for business intelligence services.”

$            8,000.00 Pierre Falcone.xls

(Deutsche Bank)

4/12/06 PJF Luanda at Banco BPI SA,

Lisbon

Falcone Household Account  

27220‐365 $       349,932.00 BOA‐PSI‐03915

4/13/06 Falcone Household Account

272207365 Beverly Loan Company $       210,000.00 BOA‐PSI‐03918

5/25/06 Beverly Loan Co. writes check

Falcone Household Account  

272207365 $       120,000.00 BOA‐PSI‐90210
268 

6/6/06 Beverly Loan Co. writes check Falcone Household Account  

272207365 $         80,000.00 BOA‐PSI‐03841‐2

7/6/06

Pierre Joseph Falcone at Citic Ka

Wah Bank Limited in Beijing thru

Bank of America NY

Beneficiary not named.  Receiving

institution is “Asia Return Item.” $       228,203.00 Pierre Falcone.xls

(Deutsche Bank)

7/6/06 Pierre Joseph Falcone at Citic Ka

Wah Bank Limited in Beijing

JK Gruner and Associates at Sun Trust

Bank in VA $         24,000.00 Pierre Falcone.xls(Deutsche Bank)

7/11/06 Pierre Joseph Falcone at Citic Ka

Wah Bank in Beijing

Williams and Connolly at Bank of

America, NY $       228,203.00 Pierre Falcone.xls(Deutsche Bank)

8/21/06 Beverly Loan Co. writes check Falcone Household Account  

272207365 $       119,600.00 BOA‐PSI‐03843‐4

8/29/06

Pierre J. Falcone at Banco Sol

Banco at Firstrand Limited in

Johannesburg

Falcone Household Account  

272207365 $       149,975.00 BOA‐PSI‐03921

10/6/06 Charleston Hotels Group Falcone Household Account  

272207365 $       200,000.00 BOA‐PSI‐03927

10/6/06 Falcone Household Account

272207365 Beverly Loan Company $       100,000.00 BOA‐PSI‐03930

11/10/06 PJF Luanda Angola at American

Express Bank Ltd in Lisbon

Falcone Household Account  

272207365 $       549,960.00 BOA‐PSI‐03933

11/10/06 Falcone Household Account

272207365 Beverly Loan Company $       300,000.00 BOA‐PSI‐03936

11/22/06 Beverly Loan Co. writes check Falcone Household Account  

272207365 $       125,000.00 BOA‐PSI‐03845‐6

12/1/06

Falcone Household Account  

272207365 writes check   

For “lawyers fees”

Perkins Cole Brown & Bain of

Phoenix $       120,000.00 BOA‐PSI‐03765

12/14/06 Levin & Schreder Falcone Household Account

272207365 $    1,050,000.00 BOA‐PSI‐03939

12/15/06 Falcone Household Account

272207365 Beverly Loan Co. $       183,646.00 BOA‐PSI‐03942

12/18/06

Falcone Household Account

272207365 writes  

check for “lawyers fees”

Grant Woods $       210,000.00 BOA‐PSI‐03764

2/14/07 Beverly Loan Co. writes check Falcone Household Account  

272207365 $         67,000.00 BOA‐PSI‐03847‐8

2/21/07 Beverly Loan Co. writes check Falcone Household Account  

272207365 $       100,000.00 BOA‐PSI‐03849‐50

2/22/07 Beverly Loan Co. writes check Falcone Household Account  

272207365 $         90,000.00 BOA‐PSI‐03851‐2

3/22/07 Beverly Loan Co. writes check Falcone Household Account  

272207365 $         61,000.00 BOA‐PSI‐03853‐4

4/12/07 Beverly Loan Co. writes check Falcone Household Account  

272207365 $       549,700.00 BOA‐PSI‐03855‐6

4/13/07

Falcone Household Account

272207365 writes

check for “lawyers fees”

Perkins Cole $       142,411.45 BOA‐PSI‐03766

5/21/07 Beverly Loan Co. writes check Falcone Household Account  

272207365 $       149,700.00 BOA‐PSI‐03857‐8

6/4/07 Beverly Loan Co. writes check Falcone Household Account  

272207365 $         50,000.00 BOA‐PSI‐03859‐60

6/29/07 Craig Jackson at Wells Fargo

writes check

Falcone Household Account  

272207365 $       255,156.00 BAC‐PSI 07625

8/20/07 Pierre Joseph Falcone at Citic ka

wah Bank Ltd. in Hong Kong

Iris Mendez Account

4674269956 $       250,000.00 BOA‐PSI‐07694

SOURCES – Multiple TOTAL‐ $62,075,357.31

Chart Prepared by Subcommittee
269 

C. An Angolan Government Official: Moving $50 Million at the 

 Request of the Governor of the Angolan Central Bank 

 

 Documents uncovered during the Subcommittee’s investigation show that, in 2002, Dr. 

Aguinaldo Jaime, then head of the Central Bank of Angola, Banco Nacional de Angola (BNA), 

attempted to transfer $50 million in government funds from the central bank to a private bank 

account in the United States, only to have the transfer blocked and the funds returned on two 

occasions by the U.S. financial institutions involved. The transfer of the Angolan funds was 

characterized at the time as an investment to produce humanitarian aid for the people of Angola, 

but other documents indicate the transfer was part of a fraudulent “prime bank” investment 

scheme that likely would have resulted in the funds being lost or stolen. 

 The participants in the 2002 $50 million transfer include BNA Governor Jaime; Mehenou 

Satou Amouzou, a Togo citizen living in the United States and owner of MSA, Inc., a Florida 

company that played a role in the first attempted transfer; Charles Shelton, a London-based 

broker with alleged access to a secretive Swiss trading group; Stanley Wayland, a purported 

principal in that Swiss trading group; and Jan Morton Heger, a California attorney and owner of 

Euro-American Investments, LLC, a Nevada company that played a role in the second attempted 

transfer. 

 In the first transfer attempt, in June 2002, BNA Governor Jaime ordered $50 million in 

Angolan funds wire transferred from a BNA account at Citibank London to a Bank of America 

account in California which had been opened in the name of MSA, Inc. and whose signatories 

were Mr. Amouzou and Dr. Jaime. Bank of America initially allowed the transfer, but became 

suspicious and ultimately returned the funds to Citibank and closed the MSA account. 

The second attempt took place two months later, in August 2002, when BNA Governor 

Jaime instructed Citibank London to wire transfer $50 million to HSBC Equator Bank in 

London, and then opened a BNA account, with himself as the sole signatory, at HSBC USA in 

New York. At his request, HSBC used the funds to purchase $50 million in U.S. Treasury Bills 

(T-Bills) for the New York account. Dr. Jaime then instructed HSBC to transfer the T-Bills from 

New York to a personal securities account in the name of Mr. Heger at Wells Fargo Investment 

Services in California. Wells Fargo initially allowed the transfer, became suspicious, returned 

the T-Bills to HSBC, and closed the Heger account. Undeterred, Dr. Jaime instructed HSBC to 

transfer the T-Bills to a Heger law office account at Comerica Bank in California. HSBC 

attempted but was unable to complete the transfer due to incorrect account information. Dr. 

Jaime then offered to allow HSBC to retain the Treasury bills in New York, on the condition that 

it provide him with a negotiable “safekeeping receipt” that could be used as a transferable 

financial instrument. HSBC initially agreed, but apparently never actually provided the receipt. 

In December 2002, Dr. Jaime took a new government post outside of BNA, and BNA ordered 

the T-Bills to be liquidated and the $50 million returned to its account at Citibank London. 

 This case study has a satisfactory conclusion, since the $50 million was returned to the 

Angolan central bank, but illustrates how even central bank transactions require careful scrutiny 

by U.S. financial institutions. As a result of the $50 million transfers that went through its 

accounts and ongoing concerns about corruption in BNA and Angola generally, in 2003, 
270 

Citibank closed not only the accounts it had maintained for BNA, but all other Citibank accounts 

for Angolan entities, and shut down its branch in Angola. 

In connection with its investigation of this matter, the Subcommittee obtained extensive 

documents from and conducted interviews with Mr. Amouzou and Mr. Heger. It also obtained 

documents from and conducted interviews with many of the financial institutions involved. The 

Subcommittee also met with a representative of Angola’s Embassy, explained its investigation 

and showed key documents it had obtained, and asked to speak with Dr. Jaime or another 

appropriate Angolan official to obtain their views of the $50 million transfer. After waiting 

several months, the Subcommittee sent a letter renewing its request, but the Embassy chose not 

to provide an official for a Subcommittee interview on this matter. 

(1) Background 

Banco Nacional de Angola. Banco Nacional de Angola, first established after Angola 

gained its independence in 1975, is wholly owned by the Government of Angola and functions as 

the country’s central bank. BNA is a member of the Association of African Central Banks and 

the Southern African Development Community.1438 It serves as Angola’s monetary and foreign 

exchange authority, but is also licensed to do business directly with individual Angolan and 

foreign clients. BNA has its headquarters in Luanda, Angola’s capital city and, in 2002, 

operated nine branches throughout the country with a total of about 2,000 employees.1439 In 

December 2004, BNA held about $1.257 billion in total assets and managed more than $25 

million in client funds.1440 

 Governor Jaime. Dr. Aguinaldo Jaime served as the Governor of Banco Nacional de 

Angola from May 1999 until December 2002.1441 During his tenure, his responsibilities included 

chairing the BNA Board of Directors, directing BNA’s day-to-day management, certifying 

BNA’s financial books, representing BNA before national, foreign, and international institutions, 

and signing all Angolan banknotes issued by BNA.1442 

 On or around December 5, 2002, Dr. Jaime left Banco Nacional de Angola to become an 

Assistant to the Prime Minister of Angola under President Jose Eduardo dos Santos. Later in 

2003, he became Deputy Prime Minister of Angola. After serving in that post for six years, in 

2009, he was appointed Chairman of an Angolan commission that promotes private investment 

in the country, Agência Nacional para o Investimento Privado (ANIP).1443 

 Prime Bank Schemes. “Prime bank” schemes are a type of fraudulent investment 

scheme that gained popularity during the 1990s. As of 2002, there were over 100 pending 

 

1438 11/13/06 2006 HSBC KYC profile of BNA, HSBC-PSI 032834. 

1439 12/18/02 HSBC KYC profile of BNA, HSBC-PSI 037384-89. 1440 12/21/06 HSBC internal email, HSBC-PSI 032837 (stating that, as of December 2004, BNA’s total assets were 

about $1.9 billion, its net income was about $63 million, and it held over $127 million in capital and reserves). 

1441 12/13/01 email from HSBC Equator, HSBC-PSI 037185. Dr. Jaime was replaced by Amadeu de Jesus 

Castelhano Maurício who remains the BNA Governor today. African Development Information Services, “Angola 

Who’s Who,” http://www.afdevinfo.com/htmlreports/ao92.html#M). 1442 See Angola National Assembly Law No. 6/97, Chapter IV, Section II, Article 58, enacted July 11, 1997. 1443 See ANIP website, http://www.iie-angola-us.org/home.htm. 
271 

federal criminal investigations in the United States related to prime bank schemes.1444 According 

to the U.S. Securities and Exchange Commission (SEC), the fraud revolved around financial 

instruments referred to as “prime bank instruments” or “prime bank notes,” that were often 

characterized as guarantees of certain funds held by major, well known banks.1445 Promoters 

claimed that these instruments, when resold several times, produced substantial returns on the 

initial investment.1446 Promoters also typically told investors that they had special access to 

secretive trading programs between banks that bought and sold these financial instruments, 

although, in reality, no such trading programs existed. Some promoters also told investors they 

were one of a small number of traders licensed by the Federal Reserve to trade in such 

instruments, when in fact, no such licenses are issued by the Federal Reserve.1447 Investors were 

often told that their funds would be used to secure and trade in prime bank instruments on 

international markets, and promised profits of 100% or more with no risk.1448 The U.S. Federal 

Bureau of Investigations (FBI) has cautioned that, typically, the real objective of the fraud was to 

convince investors to transfer money to a foreign bank account under control of the fraudster 

who would then transfer some or all of the funds to still another, undisclosed offshore 

account.1449

Mehenou Amouzou. Mehenou Satou Amouzou is a native and citizen of Togo and lives 

in the United States. In response to a Subcommittee subpoena, he agreed to produce documents 

and participate in an interview. Earlier, Mr. Amouzou’s office was the subject of a search 

warrant by the Internal Revenue Service (IRS) which removed a significant number of 

documents. Mr. Amouzou gave the Subcommittee permission to obtain those documents from 

the IRS. 

During his interview, Mr. Amouzou told the Subcommittee that he held several advanced 

degrees 1450 and came to the United States in 1991, in pursuit of a doctorate in finance from La 

 

1444 Joel E. Leising and Michael McGarry, “Prime Bank / High Yield Investment Schemes,” United States 

Attorneys’ Bulletin, March 2002, Vol. 50, Number 2. 

1445 According to the SEC, prime bank schemes “involve the purported issuance, trading, or use of so-called ‘prime’ 

bank, ‘prime’ European bank or ‘prime’ world bank financial instruments, or other ‘high yield investment programs’ 

(‘HYIPs’). The fraud artists who promote these schemes often use the word ‘prime’ – or a synonymous phrase, such 

as ‘top fifty world banks’ – to cloak their programs with an air of legitimacy. They seek to mislead investors by 

suggesting that well regarded and financially sound institutions participate in these bogus programs. But prime bank 

and other related schemes have no connection whatsoever to the world’s leading financial institutions or to banks 

with the word ‘prime’ in their names.” http://www.sec.gov/divisions/enforce/primebank.shtml. 1446 See Federal Bureau of Investigation – Common Fraud Schemes, 

http://www.fbi.gov/majcases/fraud/fraudschemes.htm. 

1447 See Federal Reserve Bank of New York, Circular 10858, June 19, 1996. 1448 See SEC, Prime Bank Fraud Information Center, 

http://www.sec.gov/divisions/enforce/primebank/howtheywork.shtml. 

1449 See FBI – Common Fraud Schemes, http://www.fbi.gov/majcases/fraud/fraudschemes.htm. 1450 He told the Subcommittee that he attended high school in France; obtained undergraduate and Masters degrees 

from the European Institute of Management; obtained a certificate in finance and investment from the American 

University in Paris in 1987; and another Masters degree in political science and international relations from the 

University of Paris’ Ecole Hautes Etudes Internacionale in 1989. Subcommittee interview of Mr. Amouzou, May 

13, 2008. See also the credentials listed in a 2002 development proposal, BOA-PSI-05629. 
272 

Jolla University in San Diego.1451 Mr. Amouzou told the Subcommittee that he works with 

African countries to diversify their resources and has worked on business ventures in a number 

of African countries. Documents reviewed by the Subcommittee disclosed a long history of 

involvement with failed investments, including investments that referred to prime bank 

instruments.1452 

MSA, Inc. Mr. Amouzou told the Subcommittee that he formed Mehenou Satou 

Amouzou, Inc. (MSA, Inc.) as a U.S. corporation to provide consulting and investment 

management services.1453 Mr. Amouzou serves as MSA, Inc.’s president, chief executive officer, 

and chairman of the board of directors.1454 He provided the Subcommittee with two documents 

identifying the corporate organization and officers of MSA, Inc.1455 The documents are identical 

except that each identifies a different subsidiary: one lists Phoenix Holding International, 

Inc.,1456 while the other lists Delta Holdings International, Inc., formerly known as FranTech 

Angola Inc.1457 FranTech Angola was incorporated by Mr. Amouzou on January 14, 2002, in 

connection with his efforts related to Angola.1458 Mr. Amouzou estimated that MSA, Inc. 

currently earns revenues of approximately $120,000 per year.1459

(2) First Attempt To Transfer the $50 Million 

In June 2002, Banco Nacional de Angola instructed Citibank to transfer $50 million of 

Angolan state funds from its account at Citibank London to an account in the name of MSA, 

Inc., at Bank of America in San Diego. Dr. Jaime and Mr. Amouzou were the signatories for the 

MSA account. Citibank approved the transfer, and Bank of America initially allowed it, but later 

 

1451 The Subcommittee was unable to confirm the existence of a university with that name in San Diego. One 

document produced by Mr. Amouzou showed that, in 1992, he received a professional guard license, apparently in 

connection to his employment by a private security company. BOA-PSI-05529. 1452 See, e.g., “Trade Programs” which appears to be a 41-page instruction manual for a prime bank trading program, 

PSI-Amouzou-09-0149-90; documents related to Kramer International, Inc., a corporation formed by Mr. Amouzou, 

which is listed in the Los Angeles County Fictitious Business Name Index (No. 00-267100), filed February 23, 

2000, http://www.lavote.net/Clerk/Business_Name.cfm, and which was involved with prime bank funding for 

housing construction in Gambia in 1999, PSI-Amouzou-09-1366; PSI-Amouzou-09-0947; PSI-Amouzou-09-0981; 

and prime bank funding for housing construction in Angola in 2000, PSI-Amouzou-10-1390-92; together with other 

documents that appear related to prime bank schemes, PSI-Amouzou-10-1403-06; PSI-Amouzou-07-0747; PSIAmouzou-10-0672-73; PSI-Amouou-09-1269; PSI-Amouzou-09-1242; PSI-Amouzou-08-0013; PSI-Amouzou-10-

1078; PSI-Amouzou-08-0015. 

1453 The Subcommittee was unable to locate incorporation documents for MSA, Inc. 1454 MSA, Inc. flowchart, PSI-Amouzou-07-1251. 1455 Id. MSA, Inc. flowchart, PSI-Amouzou-08-0834. Both flowcharts show that MSA, Inc. had three Vice 

Presidents: David Naranjo, who was also the Director of Operations and Treasurer of the Board of Directors; Albert 

Lee, who was also Director of Resources and Secretary of the Board of Directors; and Kwesi B. Annan, who was 

also the Director of Programs. Both charts also list an affiliated trust, the MSA Trust, and name R. Eason and 

Adrianne Lewis as “Humanitarian” trustees. 

1456 MSA, Inc. flowchart, PSI-Amouzou-07-1251. 1457 MSA, Inc. flowchart, PSI-Amouzou-08-0834. The officers and structure of Delta Holdings are identical to the 

officers and structure of Phoenix Holding. Both list Joseph Ntamushuboro as president, and Matteuw Lee, Bernard 

Aziable, Lòuremco Landorte, and K. Beshun as directors. See also Articles of Amendment to Articles of 

Incorporation of FranTech Angola, Inc, PSI-Amouzou-11-0374. 

1458 See Florida Secretary of State Letter No. 802A00001990, attesting to the filing of Articles of Incorporation for 

FRANTECH – ANGOLA, INC., filed on January 14, 2002; Subcommittee interview of Mr. Amouzou, 5/13/08. 

1459 Subcommittee interview of Mr. Amouzou, May 13, 2008. 
273 

became suspicious that the $50 million transfer was part of a fraudulent prime bank scheme. 

Bank of America froze the funds while working with Citibank to examine the transfer. After 

three weeks, Dr. Jaime asked for the funds to be returned to the BNA account at Citibank 

London. Bank of America returned the funds and closed the MSA account. A few months later, 

in January 2003, Citibank personnel recommended closing, not only the Citibank account 

provided to BNA, but also all Citibank accounts provided to Angolan entities. Citibank actually 

closed the BNA account five months later and, during 2003, closed all other accounts held by 

Angolan government agencies and Sonangol. Citibank also closed its branch office in Angola. 

Amouzou Investment Proposal. Mr. Amouzou told the Subcommittee that, in 1999, he 

developed a business relationship with the Angolan Minister of Oil, João Landoite, who 

introduced him to Dr. Jaime, then head of the Angolan Central Bank. Mr. Amouzou told the 

Subcommittee that he presented them with an investment plan for Angola in which, if he were 

given a large sum of money such as $10 billion, he would generate a monthly return of 5 to 10% 

by depositing the principal with a major bank, obtaining a “bank guarantee” of the principal, and 

then using that bank guarantee to generate additional sums that could be placed in high-yield 

investments.1460 

Mr. Amouzou told the Subcommittee that BNA Governor Jaime expressed interest in the 

proposal which Mr. Amouzou then developed throughout 2001 and 2002. Mr. Amouzou 

provided copies of several “Funding Agreements” which purported to lay out the investment 

plan. For example, a February 2001 agreement signed by Dr. Jaime, representing BNA, and 

Mr. Amouzou, representing MSA, Inc.1461 stated that Mr. Amouzou agreed to arrange and make 

available $3 billion, with scheduled payments of $500 million per year over 6 years, to finance 

development of a number of socio-economic infrastructure projects in Angola. The agreement 

stated that, to carry out this investment plan, Mr. Amouzou was to be issued a “Bank Guarantee” 

for $150 million upon execution of the agreement, and would keep that Bank Guarantee for 18 

months in a safe deposit account at a bank. Eventually the funding would reach “the total 

amount requested, which is Three Billion Us Dollars.”1462 Meanwhile, BNA was to open up a 

new bank account to receive the profits from the investment plan, and Mr. Amouzou would 

disburse the funds from an account at Bank of America. 

 Mr. Amouzou told the Subcommittee that the Angolan legislative assembly issued a 

resolution approving the concept and authorizing an MSA, Inc. subsidiary, FranTech Angola, to 

develop the investment proposal further. Mr. Amouzou provided the Subcommittee with 

additional documents related to the investment project including the following: 

– a March 23, 2001 letter from Dr. Jaime presenting a list of projects, including health, 

infrastructure, and education projects, for which the Government of Angola was seeking 

financing, a Bank Guarantee, Power of Attorney, and a copy of Dr. Jaime’s passport and 

business cards;1463

 

1460 Id. 1461 2/15/01 “Funding Agreement” between BNA and MSA, Inc., PSI-Amouzou-08-0143-46. 1462 Id. at 0144. 1463 Letter from BNA Governor Jaime to Mr. Amouzou, 3/23/01, PSI-Amouzou-08-0147-48. 
274 

– an August 2001 letter, signed by Angolan President dos Santos, authorizing the 

FranTech Research Group to represent the Government of Angola in “the world market 

with a view to negotiate social and economic development projects and secure capital 

investments necessary for their financing,” and declaring that all dividends from the 

investments would go directly to development projects in Angola;1464 

– an August 2001 letter signed by Dr. Jaime which enclosed the dos Santos letter and 

indicated that Dr. Jaime would establish a Technical Committee to assess any projects to 

be financed under the agreement;1465

– a January 2002 letter from Dr. Jaime which confirmed Mr. Amouzou’s “mandate as 

Advisor to the Government of Angola,” and stated that Mr. Amouzou was entitled “to 

deal with public or private entities in order to achieve the agreed and stated 

objectives;”1466 

– a February 2002 declaration from President dos Santos stating that funds used in the 

development projects “shall be under no circumstances diverted or used for other than the 

stated and agreed purposes”;1467 and 

– a July 2002 MSA, Inc. Proposed Development Project, 62 pages in length, outlining his 

proposed investment plan and identifying $7.7 billion in possible health, infrastructure, and 

education projects that could be financed with the projected investment returns. 1468 

London Broker. In early January 2002, Mr. Amouzou began to involve a selfemployed, London-based stockbroker named Charles Shelton in the proposed Angolan 

investment project. In a January 2002 email, Mr. Shelton requested a new version of a “Bank 

Guarantee” from the “National Bank of Angola,” because “there were several spelling mistakes 

and the g[e]neral format was not what we would have expected.”1469 Two weeks later, an email 

from Mr. Shelton stated: “The documents submitted are not absolutely clear as to whether the 

BG issued for this will be backed by cash, or by a government guarantee. Can you please 

discuss this with Dr. Amouzou and obtain a letter from the Central Bank of Angola signed by the 

Governor confirming whichever is the case.”1470 

 

 

1464 Letter from President dos Santos to FranTech Research Group, 8/29/01, PSI-Amouzou-11-0035-36. 1465 Letter from BNA Governor Jaime to Mr. Amouzou, president of MSA, Inc., 9/04/01, PSI-Amouzou-11-0037. 1466 Id., 1/31/02, PSI-Amouzou-11-0039 and BOA-PSI-05635. 1467 Declaration by José Eduardo dos Santos to “All Stakeholders, Vendors and Participants of the Development 

Project Under the Humanitarian Funding,” 2/01/02, PSI-Amouzou-11-0038 and BOA-PSI-05633. 

1468 See MSA, Inc. Proposed Development Projects for Republic of Angola, BOA-PSI-05622-84. When asked about 

the funding for the investment plan, Mr. Amouzou told the Subcommittee that it depended upon BNA’s issuing a 

$50 million “bank guarantee.” Subcommittee interview of Mr. Amouzou, May 13, 2008. Most of the proposal 

consisted of a list of proposed projects and a feasibility study of them, including projects involving road construction 

and airports infrastructure ($1.5 billion); hospitals, clinics, and supplies ($750 million); education, buildings, and 

supplies ($700 million); housing ($3.1 billion); a power plant ($650 million); waste treatment ($300 million); water 

treatment ($300 million); AIDS patients ($100 million); and land mine removal ($300 million). The proposal also 

included two letters, ostensibly from U.S. Congressman Randy “Duke” Cunningham and California State Senator 

Diane Watson, each of which commended Mr. Amouzou for his efforts to expand trade between the United States 

and Togo, Id., at BOA-PSI-05631-32. Bank of America told the Subcommittee that these two letters may have 

been fakes. Subcommittee interview of Bank of America officials, May 8, 2008. 

1469 1/25/02 email from Mr. Shelton to Donald Bowers of Continental Capital Funding re “Angola BG [Bank 

Guarantee] $150M,” PSI-Amouzou-09-1070. 

1470 2/19/02 email from Mr. Shelton to Donald Bowers of Continental Capital Funding, PSI-Amouzou-08-0174. 
275 

Four months later, on June 12, 2002, Mr. Shelton sent an email to Mr. Amouzou 

regarding the “Angola BG [bank guarantee] PRoject.”1471 The email stated: “I like you was 

concerned that the people proposed by Lovell would want to ‘charge’ an upfront fee of 

USD2.0M as a security deposit for work to be done by the lawyers in preparing the 

documentation for which there was no guarantee of funding.” Mr. Shelton continued: 

“If you have access to any one or a company with USD100M cash then we can get you 

into a program within 5 banking days from final approval following due diligence of the 

client/funds. ... [Y]ou would expect to achieve approximately 25% per week as a 

minimum amount based on USD100M .... At present it would pay out every two weeks 

and last for 40 weeks.”1472

One week later, Mr. Shelton projected “a minimum of 50% per week” if $50 million was 

invested.1473 He encouraged Mr. Amouzou to travel to Switzerland to meet with the investment 

“Group” which would generate the return on the Bank Guarantee. 

On July 10, 2002, a conference call was held at MSA, Inc. offices in California for MSA 

board members to discuss the anticipated $50 million investment from the Angolan central 

bank.1474 According to the minutes of the board meeting, those in attendance were 

Mr. Amouzou, MSA president; Albert Lee, MSA vice president and secretary; and David 

Naranjo, MSA vice president and director of operations. According to the minutes, a July 10, 

2002 letter from Dr. Jaime was read aloud discussing the $50 million deposit for the “Angola 

project.” The board then adopted the following resolution: 

“The Board has agreed that Dr. Aguinaldo Jaime be appointed the Acting Special CFO as 

an overseer of the Fifty Million Dollars to be deposited in an International Prime Bank. 

This is a requirement by the funding party of the Seven Billion Dollar project for Angola. 

This position shall be enforced for the approximately three years during which the Fifty 

Million Dollars remains blocked in the designated International Prime Bank.” 

In addition, the board resolved that the $50 million would be deposited into an “international 

prime bank,” and that Mr. Amouzou and Dr. Jaime would have joint signing authority over the 

withdrawal of the funds.1475

 When asked about the resolution making BNA Governor Jaime an Acting Special Chief 

Financial Officer of MSA, Inc., Mr. Amouzou told the Subcommittee that he had suggested that 

Governor Jaime be given this unpaid position so that he could monitor Angolan funds placed 

with MSA, Inc. for investment.1476 He said the position did not require Dr. Jaime to oversee the 

day-to-day functioning of the business. 

 

 

1471 6/12/02 email from Mr. Shelton to Mr. Amouzou, PSI-Amouzou-11-0059. 1472 Id. 1473 6/19/02 email from Mr. Shelton to Mr. Amouzou, PSI-Amouzou-09-1415. 1474 7/10/02 Minutes of the Special Meeting Board of Directors MSA, Inc., PSI-Amouzou-11-0538. 1475 Id. 1476 Subcommittee interview of Mehenou Satou Amouzou, May 13, 2008. 
276 

MSA Account at Bank of America. On May 15, 2002, Mr. Amouzou opened a savings 

account at a Bank of America branch in San Diego, Account No. 08500-05836, in the name of 

MSA, Inc.1477 The account was opened by the branch manager. Both Mr. Amouzou and Dr. 

Jaime were listed as authorized signatories on the account.1478 

None of the account opening documentation identified Dr. Jaime as an official with the 

Angolan central bank. In late 2001, the Patriot Act was enacted into law and included a 

provision, to take effect in July 2002, requiring enhanced monitoring of private bank accounts 

opened by senior foreign political figures. While that requirement did not apply to a corporate 

account, the statute sent a clear signal to banks to tighten their scrutiny of accounts opened by 

senior foreign government officials. At the time of the account opening, however, Bank of 

America was unaware of Dr. Jaime’s PEP status. 

June 2002 Transfer of $50 Million. On June 11, 2002, BNA instructed Citibank to 

transfer $50 million of Angolan government funds from its account in London to the MSA 

account opened two weeks earlier at Bank of America. 

 

The wire transfer documentation identified the originator of the $50 million transfer as 

“BNA Oil Taxes y Royalties.” It described the funds as a “Deposit To Secure Fnd’ing Fro [sic] 

Humanitarian Projects in Angola.”1479 The funds were sent from the BNA account at Citibank in 

London, through a Citibank correspondent account in New York, to the Bank of America branch 

in San Diego. Bank of America documentation shows that the $50 million was deposited into 

the MSA, Inc. account on the same day it was sent.1480

 

On June 12, 2002, Citibank London asked BNA to clarify the identity of the recipient of 

the $50 million, to ensure compliance with U.S. regulations then restricting U.S. trade with 

Angola.1481 Dr. Jaime sent the following Swift message: 

“MSA stands for Mehenou Satou Amousou Inc., which is an American company 

specialized in management and investment, headquartered in California, San Diego. Its 

president is Dr. Mehenou Satou Amouzou. The 50 million deposit is a colateral [sic] to 

guarantee a humanitarian funding for development projects for the Republic of Angola. 

Kind regards, Aguinaldo Jaime – Governor.”1482 

Citibank cleared the wire transfer since it was not subject to U.S. Angolan sanction regulations. 

 

 

1477 Bank of America signature card for account, BOA-PSI-05144; 6/20/02 internal Bank of America email 

discussing account, BOA-PSI-05439-40. See also 3/6/02 MSA corporate resolution authorizing Mr. Amouzou to 

open such an account, PSI-Heger-01-00185. 

1478 Bank of America signature card for account, BOA-PSI-05144. 

1479 Wire transfer documentation, BOA-PSI-05080-85. 1480 Bank of America Customer Relationship Inquiry showing $50 million deposit, BOA-PSI-05086; Bank of 

America record of MSA, Inc. account activity, BOA-PSI-05080. 1481 6/12/02 SWIFT message from Citibank to BNA, BOA-PSI-05140. Based upon U.S. Office of Foreign Asset 

Control (OFAC) regulations applicable at that time, certain wire transfers from Angola were prohibited without 

prior U.S. Government approval. See Angola Sanctions Regulations, 31 U.S.C. Part 590 (2002). 

1482 6/13/02 SWIFT message from Dr. Jaime at BNA, BOA-PSI-05141 (changed case of capitalized letters). 
277 

For the next eight days, the full $50 million was available in the MSA account and could 

have been withdrawn or transferred in whole or in part, but was not. On June 19, 2002, 

Mr. Amouzou and David Naranjo met with a private banker in the Bank of America Private 

Bank to discuss investment options for the $50 million.1483 Mr. Amouzou had been referred to 

the Private Bank by a Bank of America employee who told his colleagues that Mr. Amouzou had 

“other investments and would like to trans[fer them] to B of A.”1484 During that meeting, 

Mr. Amouzou asked the private banker about placing the $50 million in a one-year, international 

certificate of deposit.1485 

At one point, the private banker asked Mr. Amouzou about the source of the funds that 

comprised the $50 million. According to a statement subsequently prepared by the private 

banker, Mr. Amouzou “got very upset and said the funds were good, clean funds and why was I 

so suspicious.”1486 She reported that Mr. Amouzou stated further that the “money was from the 

government of Angola.”1487 The meeting ended without an agreement on investment of the 

funds. 

 Shortly after the meeting, the Bank of America private banker discussed the $50 million 

transfer with a bank corporate security officer and the San Diego branch manager.1488 The 

corporate security officer advised the branch manager to place a restriction on the MSA, Inc. 

account so that no funds would be released from the account without first notifying corporate 

security.1489 This notice essentially froze the funds for the first time since they had been 

deposited eight days earlier. While the corporate security officer was instructing the branch 

manager to restrict the account, “Mr. Amouzou and another gentleman entered the bank, wishing 

to take action on the account.”1490 The branch manager informed them that “the 50m was on 

hold and frozen until security could clear said 50m.”1491 

 The next day, June 20, 2002, the Bank of America corporate security officer sent an 

email alerting her colleague in Corporate Security – International Services to the $50 million 

transfer and requesting her assistance in contacting Citibank about the matter.1492 The email 

noted that Mr. Amouzou had claimed to be the principal owner of the funds which he indicated 

had come from the sale of gold and oil in Angola.1493 It said he had inquired about purchasing a 

one year certificate of deposit that would allow for the withdrawal of funds. The email 

 

1483 Subcommittee interview of Bank of America officials, May 8, 2008. Mr. Naranjo was then the Director of 

Operations at MSA, Inc. See also 6/21/02 statement of Bank of America private banker, BOA-PSI-05414-16; 

document entitled, “Sequence of Events,” likely prepared by Mr. Amouzou, PSI-Amouzou-03-0005-06. 1484 Bank of America Private Bank Relationship Referral Form, 5-15-02, BOA-PSI-05584. See also 6/21/02 

statement of Bank of America private banker, BOA-PSI-05414-16. 

1485 6/21/02 statement of Bank of America private banker, BOA-PSI-05414-16. 1486 Id, at 15. 1487 Id. 1488 BOA-PSI-04987; BOA-PSI-05447; Subcommittee interview of Bank of America officials, May 8, 2008. 

1489 Bank of America Corporate Security Investigator Diary, BOA-PSI-04987; Account restriction notice, BOA-PSI05078. See also Subcommittee interview of Bank of America officials, May 8, 2008. 

1490 Bank of America Corporate Security Investigator Diary, BOA-PSI-04987. See also document entitled, 

“Sequence of Events,” likely prepared by Mr. Amouzou, PSI-Amouzou-03-0005. 

1491 Document entitled, “Sequence of Events,” likely prepared by Mr. Amouzou, PSI-Amouzou-03-0006. 

1492 6/20/02 internal Bank of America email, BOA-PSI-05440. 

1493 Id. 
278 

speculated that “we may have a Prime Bank scam or just funds which were removed from 

Angola illegally.” The email also noted that Dr. Jaime was both the signer of the Citibank 

London swift message on the origin of the funds and a signatory on the Bank of America savings 

account that received the funds. 

The international corporate security officer responded the same day and requested that 

the San Diego corporate security officer “ensure that the money stays frozen, deeply frozen!”1494 

She indicated that she had communicated with Citibank about the matter, and Citibank “now 

consider[s] it to be either a Prime Bank scam or an internal problem within BNA – and 

extremely unlikely to be genuine.” She noted that the individual who provided verification of 

the funds on behalf of BNA, Dr. Jaime, was the co-signer on the MSA account. She wrote: 

“The other significant issue is that Mr. Amouzou is on the ‘known’ list with the International 

Chamber of Commerce – I couldn’t get any further details on this but something somewhere is 

not right with him.” 

Earlier that day, Citibank had contacted the Commercial Crime Services of the 

International Chamber of Commerce (ICC).1495 ICC had reported to Citibank, which then shared 

the information with Bank of America, that the ICC had been contacted in May 2001, by a 

German-based bank concerned about an alleged guarantee from Banco Nacional de Angola to 

MSA, Inc., the beneficiary.1496 The guarantee to be issued by BNA was to be “unconditional and 

freely transferable,” and authorize the beneficiary to receive payment of an unspecified sum 

“free and clear of any deduction or charges.” The guarantee was to become effective on 

February 26, 2001 and expire July 27, 2002. 

 While these email exchanges were taking place on June 20, 2002, Mr. Amouzou sent 

Bank of America a letter asking it to supply him with a letter stating: “We hereby irrevocably 

confirm that MSA, Inc. ... has the amount of USD $50,000,000, freely available to MSA, Inc. 

The funds are transferable, screenable, clear and unencumbered of any liens or rights of any third 

party.”1497 An attorney for MSA, Inc., Brian Gard, also sent notice to the bank that he had been 

asked to facilitate release of the funds.1498 

 The next day, June 21, 2002, Mr. Gard sent a letter demanding immediate release of the 

$50 million and a “good faith discussion relative to the amount of damages to be paid to my 

client for such outrageous and unwarranted delay.”1499 Mr. Gard asserted: 

“The funds therein have already been cleared as being in compliance with U.S. Federal 

banking regulations. Thus, it is not the funds which have been frozen, but the account 

itself. Further, I understand that you have been endeavoring to learn information 

 

1494 6/20/02 internal Bank of America email, BOA-PSI-05439. 

1495 The ICC’s “Commercial Crime Services (CCS) is the anti-crime arm of the International Chamber of 

Commerce. Based in London, CCS is a membership organisation tasked with combating all forms of commercial 

crime ... [including] fraud in international trade, insurance fraud, financial instrument fraud, money laundering, 

shipping fraud and product counterfeiting.” ICC website, http://www.icc-ccs.org. 

1496 6/20/02 email exchange, BOA-PSI-05346 (quoting from alleged guarantee document). 

1497 6/20/02 letter from MSA, Inc. to Bank of America, BOA-PSI-05150. 

1498 6/20/02 email and letter from Law office of Brian D. Gard to Bank of America, BOA-PSI-05340-41. 

1499 6/21/02 email and letter from Law office of Brian D. Gard to Bank of America, BOA-PSI-05335-36. 
279 

concerning the principals of MSA, Inc., and the particulars of the transaction with which 

it is involved. I consider such activities to be far afield of any legitimate concern of Bank 

of America and potentially destructive of the business concerns of my client.”1500 

Bank of America told the Subcommittee that its corporate security officer had several 

conversations with Mr. Amouzou and Mr. Gard who both shouted at her and threatened her.1501 

 Funds Returned by Bank of America. One week later, on June 26, 2002, Dr. Jaime 

faxed a letter to Bank of America asking that the $50 million be returned to BNA with 

interest.1502 The letter, which he signed, stated: “After extensive consultations with CITIBANK 

and a reassessment of the underlining transactions, Banco Nacional de Angola has decided that 

its funds should be sent back to the account with CITIBANK until further notice.” 

 The next day, June 27, 2002, Dr. Jaime faxed a letter on BNA stationery to the president 

of an American company discussing the hold on the $50 million which he characterized as an 

action “by the American Authorities ... aimed at protecting the people and country of 

Angola.”1503 Dr. Jaime wrote: 

“Our mutual friend Dr. Amouzou was kind enough to make me aware of the contents of 

the letter, dated June 26, on the $50 M USD problem, that you addressed to him. ... 

Please be hereby informed that the Central Bank of Angola has been advised to recall the 

funds, as an interim measure, pending the clarification of this affair. It is nevertheless, 

our firm intention to pursue the humanitarian funding program with Dr. Amouzou and 

MSA and bring it to a successful end once the situation is clarified to the satisfaction of 

the American Authorities. ... [T]his affair has embarrassed all of us.” 

Dr. Jaime continued that he had built “a reputation of a man of integrity and honor,” and his 

“sole purpose in entering into the Agreement with MSA was to alleviate poverty and the 

suffering of the Angolan people.” 

The next day, June 28, 2002, Bank of America received a request from Citibank London 

to cancel the $50 million wire transfer. The cancellation request stated: “Please contact your 

customer for written debit authorization: per remitter[’]s request as funds sent in error.”1504 The 

remitter making the request was BNA. The Citibank request included a signature line for a 

representative of MSA, Inc. to authorize cancellation of the wire transfer. Bank of America told 

the Subcommittee that it was also contacted by the U.S. State Department which encouraged the 

bank to send the funds back to the Angolan central bank.1505 The State Department told the 

 

1500 Id. at 05336. 1501 Subcommittee interview of Bank of America officials, May 8, 2008. 1502 6/25/02 letter from Dr. Jaime to Bank of America, faxed on 6/26/02, BOA-PSI-05424. See also Bank of 

America Corporate Security Investigator Diary, BOA-PSI-04988. 1503 6/27/02 letter from BNA Governor Jaime to Adobe Wells, PSI-Amouzou-07-0517-19. 1504 Bank of America “Cancellation Request,” BOA-PSI-05592. See also Bank of America Corporate Security 

Investigator Diary, BOA-PSI-04988. 

1505 Subcommittee interview of Bank of America officials, May 8, 2008. 
280 

Subcommittee that it had been contacted by the IRS Criminal Investigation Division which was 

investigating the transaction and that it alerted BNA and Dr. Jaime to the possibility of fraud.1506 

 

Shortly thereafter, Mr. Amouzou signed the cancellation request, authorizing Bank of 

America to debit the $50 million from the MSA account and return it to BNA.1507 On July 1, 

2002, three weeks after the initial transfer, Bank of America did just that, wire transferring the 

$50 million back to the BNA account at Citibank in London, together with interest of $43,750, 

accrued at a rate of 1.75%.1508 

Correspondence obtained by the Subcommittee suggests that even after the $50 million 

was returned to BNA, MSA attempted to use the Bank of America account statement showing 

the $50 million in its account to convince a potential investor to invest with MSA.1509 In a July 

13, 2002 letter, David Naranjo of MSA, Inc. enclosed a copy of the bank statement and 

characterized the $50 million wire transfer as a movement of the funds to a European bank, 

because “the trading would be much less complicated if it is done in Europe.” The letter also 

referenced an additional $21 million investment.1510 

 Documents also show that Mr. Amouzou began to shift his strategy to obtain access to 

the $50 million. On July 19, 2002, when Charles Shelton, the London broker, wrote to 

Mr. Amouzou that a bank in Germany and another in Switzerland had accepted the Angolan 

investment project,1511 Mr. Amouzou responded with a demand that Mr. Shelton cease all action 

regarding the Angolan transaction. Two days later, on July 21, 2002, Mr. Amouzou wrote to Dr. 

Jaime as follows: 

“I was very disappointed in our activities with the broker in London (Charles Shelton), I 

only waited for him because he presented a higher return and a simpler and faster 

transfer. ... However, he is only a broker agent and not the trading group principal and 

that is the reason for the time delay he was unable to communicate with the principal of 

his trading group over the last several days. We are [now] dealing directly with the 

Principal, which will avoid delays. Mr. Stanley Wayland is the principal.”1512

 

 

1506 See 1/6/09 letter from the State Department to the Subcommittee, PSI-State_Dep’t-04-0001-02. 1507 Bank of America “Cancellation Request,” BOA-PSI-05592; Subcommittee interview of Bank of America 

officials, May 8, 2008. 

1508 Subcommittee interview of Bank of America officials, May 8, 2008. The next day, July 2, 2002, MSA’s 

attorney, Mr. Gard, attempted to secure a higher rate of interest compensation for the funds, requesting 6% instead 

of the 1.75% provided. In a letter to the bank, he wrote: “It seems to me that my client should have started earning 

interest on the deposit at the most favorable rate offerable to Bank of America from June 19, 2002 to July 1, 2002. 

... [W]e believe that interest at the rate of six percent (6%) represents a reasonable rate of return under the 

circumstances.” 7/2/02 letter from Brian Gard law office to Bank of America, BOA-PSI-05507-09. On July 5, at 

the end of a personal meeting with the Bank of America corporate security officer, Mr. Gard and Mr. Amouzou 

asked the bank to release the interest payment to them, but were informed that the interest payment had already been 

included in the wire transfer sent to BNA. Bank of America Corporate Security Investigator Diary, BOA-PSI04988. See also additional correspondence regarding the interest payment, BOA-PSI-05318-19 and 05325-71. 

1509 See 7/13/02 letter from MSA to a potential client, PSI-Amouzou-09-0218. 1510 Id. 1511 PSI-Amouzou-08-0253. 1512 7/21/02 letter from Mr. Amouzou to Dr. Jaime, PSI-Amouzou-08-0309-10. 
281 

Mr. Amouzou and Dr. Jaime would look to Mr. Wayland in their second attempt to wire transfer 

the $50 million in Angola state funds to a private account in the United States. 

Account Closures. Two months after the return of the $50 million, on September 3, 

2002, the Bank of America corporate security officer recommended closure of the MSA, Inc. 

account as well as two other accounts associated with Mr. Amouzou.1513 Handwritten comments 

indicate that the reason for recommended closure was “money laundering” and “Prime Bank 

Fraud w/Central Bank of Angola.” Bank of America actually closed the MSA account later that 

same month.1514 

Four months after that, in January 2003, Citibank decided to close the BNA account at 

Citibank in London, despite potentially severe economic consequences. A January 2003 

memorandum explaining the decision and its likely ramifications was sent by Citi’s NonPresence Country Head for Sub-Saharan Africa to the Citi Country Officer for South Africa.1515 

It stated: 

“I am writing to advise that after considered deliberations between Business, Product, 

Compliance and Legal, we recommend closure of the accounts of the Central Bank of 

Angola (know[n] as Banc National de Angola, BNA) with Citigroup. Our recommended 

decision may potentially result in our being forced to exit the country. This has been 

taken into account. ... 

-In June of last year, BNA instructed us to pay USD 50,000,000 to a dubious account 

with Bank of America in San Diego. Although this payment was ultimately reversed a 

few weeks later, we were never provided a satisfactory explanation of the underlying 

transaction by the BNA. ... 

-We put all accounts of the BNA with Citigroup on an individual transaction-monitoring 

basis since July. However we have learnt in this process that a number of payments that 

have left our counters did not have adequate disclosure of beneficiary details, which may 

result in our being a conduit in their questionable financial dealings. 

-We were advised in November of last year that the outgoing BNA Governor [Dr. 

Aguinaldo Jaime] that the BNA had gone ahead with the USD 50,000,000 transaction 

with another bank using a ‘fiscal paradise.’ The Governor advised us that this payment 

was of ‘national interest’ but did not provide us with a tangible explanation of the 

underlying mechanics of this repeat transaction. ... [T]his payment was also reversed 

and the new Governor was uncomfortable with the original transaction. The new 

Governor also advised our team on the ground that he had ‘inherited’ several problems 

from his predecessor, which he was trying to resolve on a ‘case by case’ basis. This does 

not add to our comfort on the inner workings of the BNA. 

 

1513 Bank of America Corporate Security Account Closure Referral, BOA-PSI-05059. 1514 Id. 1515 8/16/07 letter from Citi to the Subcommittee with January 2003 memorandum recommending closure of BNA 

account, PSI-Citi-21-01-02. 
282 

-Unfortunately the players in the Government of Angola are the same with a few key 

players in positions of power and closely managed under the leadership of the current 

President Jose Eduardo dos Santos. At the end of the day, we are uncomfortable with the 

character of the senior officials in the Angola Government and any amount of policing 

may not deter financial impropriety.” 

The memorandum continued: 

“The above action plan can be franchise threatening. ... Planned 2003 revenues are USD 

5.5MM. ... In all likelihood, the reaction of the BNA to our decision would be far 

reaching and may result in our being asked to leave the country. We should expect a 

backlash from all the Government owned and private sector banks based on the strong 

control of the Government in the bank and other priority sectors like oil and gas. I 

believe that we must work with this contingency in mind and plan to exit the country.” 

Five months later, on May 21, 2003, Citibank closed the BNA account used in the $50 

million transfer.1516 Throughout the course of 2003, it closed all remaining BNA accounts at the 

bank.1517 In addition, throughout 2003, Citibank closed all other accounts it had maintained for 

Angolan government entities, including Sonongol, the Angolan oil company.1518 Citibank also 

shut down its office in Angola. Today, Citibank still does not maintain any accounts for BNA or 

Angolan governmental entities. 

(3) Second Attempt To Transfer the $50 Million 

The second attempt by Dr. Jaime to wire transfer the $50 million in Angolan state funds 

to the United States used different banks, HSBC and Wells Fargo; different investment advisers, 

Stanley Wayland and Jan Heger; and a different company, Euro-American Investments, LLC 

(EAI). In addition, instead of attempting to wire the funds directly, the $50 million was used to 

purchase U.S. Treasury bills which then became the object of the transfer attempt. 

BNA Accounts at HSBC. During the 1970s, Banco Nacional de Angola opened 

accounts at Republic National Bank in New York. On November 1, 1999, after Republic 

National Bank merged with HSBC USA, BNA’s accounts became HSBC USA accounts.1519 

BNA still banks with HSBC USA today and has correspondent accounts in New York. 

 In addition, since 1982, BNA has maintained a banking relationship with Equator Bank 

plc, which was also purchased by HSBC around that time, and became known as HSBC Equator 

Bank (HEQB).1520 During the events examined here, BNA maintained accounts with HEQB in 

London, and at an HEQB branch in Angola. In 2003, HSBC Equator Bank ceased operations 

under its own name, although it continues to exist as a legal entity.1521 

 

1516 See list of account closings prepared by Citibank, PSI-Citigroup-02-0001. 1517 Id. 1518 Id. 

1519 See Republic National Bank and HSBC bank statements, HSBC-PSI 033149-50. 1520 See 2001 HSBC Equator Bank KYC profile of BNA, HSBC-PSI 037275-80; 10/2/00 email from HSBC Equator 

Bank to HSBC, HSBC-PSI 034050-51; information provided by HSBC’s legal counsel, January 20, 2010. 

1521 Information provided by HSBC’s legal counsel, January 20, 2010. 
283 

In a development unusual for a Central Bank, BNA also maintained an offshore account 

at a “sister bank” of HEQB called Equator Bank Ltd. (EBL) in the Bahamas.1522 According to an 

internal HSBC email, BNA first opened this offshore account in the 1980s.1523 In addition, in 

2000, BNA sought to open a second offshore account at HSBC’s branch in the Bahamas, often 

referred to as HSBC Bahamas or HSBC Nassau. BNA asked to open that account after EBL had 

accepted the maximum amount of deposits it could from BNA, as explained in this October 2, 

2000 email from HEQB to HSBC London: 

“Equator Bank Limited, Nassau (EBL), a 100% subsidiary of Equator Holdings and a 

sister bank of HSBC Equator Bank plc, London (HEQB) has had an excellent 

relationship with Banco Nacional de Angola, the central bank of Angola for the past 

twenty years. 

During this time EBL has earned in excess of USD80 million from revolving short term 

trade finance lines which are serviced by an assignment of oil proceeds. ... 

Over the past several weeks EBL has received USD103.6 million on deposit from BNA. 

On 29th September we received a further USD24 million which BNA has requested us to 

place with EBL. Unfortunately we cannot accept these funds in Nassau as they would 

cause us to contravene our trigger ratios. 

We are currently holding the funds at HEQB but know that BNA prefers to keep their 

deposits in an offshore account to avoid possible Mareva injunctions. It is for this reason 

that we approached HSBC Nassau, with whom EBL shares an office.”1524 

HSBC responded that it would accept the deposit and open an account for BNA in its Nassau 

branch, if “appropriate account opening document is obtained and that no regulatory 

notifications are required.”1525 

 

1522 See 10/2/00 email from HSBC Equator Bank to HSBC, HSBC-PSI 034050-51 (“Equator Bank Limited, Nassau 

(EBL), a 100% subsidiary of Equator Holdings and a sister bank of HSBC Equator Bank plc, London (HEQB) has 

had an excellent relationship with Banco Nacional de Angola”); 7/24/02 and 7/26/02 Swift messages, PSI-Heger-01-

00281-82 (demonstrating existence of BNA account at Equator Bank Ltd. in Nassau). See also 5/4/98 Federal 

Reserve press release approving a U.S. representative office for Equator Bank plc, http://www.federalreserve. 

gov/boarddocs/press/bhc/1998/19980504/ (Federal Reserve states that Equator Bank plc “began its operations in 

1996, as part of a reorganization of the holdings of its parent, Equator Holdings Limited (EHL). In the 

reorganization, Bank acquired the majority of the business and staff of its sister affiliate, Equator Bank Limited 

(EBL), a commercial bank incorporated in Nassau, the Bahamas, and formerly EHL’s principal operating 

subsidiary. HSBC Holdings plc (HSBC), London, England, indirectly owns 60 percent of EHL’s shares. NedEurope 

S.A., a Luxembourg subsidiary of a South African financial services group, and Equator Management Services, a 

Connecticut partnership consisting of members of the management of Bank’s affiliates, each own 20 percent of 

EHL's shares.”). 7/23/02 Swift message, PSI-Heger-01-00282 (wire transfer document sending funds to a BNA 

account at Equator Bank Ltd. in Nassau). 

1523 See 10/2/00 email from HSBC Equator Bank to HSBC, HSBC-PSI 034050-51 (EBL has had “an excellent 

relationship” with BNA “for twenty years”). 1524 10/2/00 email from HSBC Equator Bank to HSBC, HSBC-PSI 034050-51. 1525 10/2/00 email from HSBC to HSBC Equator Bank, HSBC-PSI 034050. 
284 

HSBC’s 2002 email expressed no concern about the statement that “BNA prefers to keep 

their deposits in an offshore account to avoid possible Mareva injunctions,” meaning legally 

enforceable court orders to freeze funds.1526 When asked about this statement, HSBC told the 

Subcommittee that it is a “legitimate choice” for a client to choose to be in a jurisdiction where 

they won’t be subject to certain attachments, and there was “nothing unusual” about wanting to 

avoid Mareva injunctions.1527 When the Subcommittee asked HSBC USA whether HSBC 

maintained offshore accounts for BNA in the Bahamas, HSBC USA said that it was unable to 

answer questions about a client’s non-U.S. banking activities and that it was constrained further 

by secrecy laws in the Bahamas.1528 

In 2001, HSBC Equator Bank completed a Know-Your-Customer profile of BNA.1529 

The profile noted that BNA had not published financial statements since 1997, so HEQB could 

not report on its assets, loans, deposits, shareholders equity, or net income. The profile 

continued: “We mitigate the lack of financial information through tightly structured, 

transactional oriented, financing arrangements. Equally importantly, the HEQB team works very 

closely with the counterparties including BNA officials. In this way, HEQB has been able to 

accurately assess the financial strengths and weakness[es] over an extended time period (20 

years, approximately).” The profile recommended maintaining the BNA accounts at HEQB in 

London, noting: 

“BNA is the Central Bank of Angola and is 100% owned by the Angolan Government. 

BNA maintains active deposit relationships with other first class financial institutions 

around the world including Citibank, Barclays Bank plc and Standard Chartered Bank. 

BNA is responsibly managed and is well regarded by its international correspondent 

banks.”1530 

 

Wayland and Heger. After the first attempt to transfer the $50 million failed, within 

days, Mr. Amouzou began working on a second transfer attempt, communicating with Stanley 

Wayland and Jan Morton Heger to arrange a new transaction. Mr. Amouzou told Dr. Jaime that 

Mr. Wayland was the “trading group principal” in the Swiss investment group associated with 

Charles Shelton.1531 Mr. Wayland apparently brought in Jan Morton Heger, an attorney in 

Laguna Niguel, California, who performed legal work for international clients. Mr. Heger, who 

is a U.S. citizen, produced documents in response to a Subcommittee subpoena and participated 

in an interview. 

 

 

1526 A Mareva injunction is a court order in Commonwealth jurisdictions that freezes a defendant’s assets so they 

cannot be dissipated beyond the court’s jurisdiction and frustrate a judgment. See, e.g., Mareva Compania Naviera 

SA v. International Bulkcarriers SA, 2 Lloyd’s Rep 509, (1975). 1527 Subcommittee interview of HSBC officials, May 7, 2008. 1528 According to an August 5, 2002 email, sent by MSA, Inc. officer, David Naranjo, HSBC had advised BNA to 

“protect their asset[s] by opening an Offshore account on behalf of Banco Nacional De Angola in [the] Bahamas. 

8/5/01 email from Mr. Naranjo to Stanley Wayland, PSI-Heger-01-00279. See also 8/4/02 letter from MSA to 

Stanley Waymand, PSI-Heger-01-00283 (“I am faxing you the confirmation from swift that Banco Nacional De 

Angola has $62,425,751.10 deposited into HSBC.”). 

1529 2001 HSBC Equator KYC profile of BNA, HSBC-PSI 037275-80. 1530 Id., at 037280. 1531 7/21/02 letter from Mr. Amouzou to Dr. Jaime, PSI-Amouzou-08-0309-10. 
285 

Mr. Heger told the Subcommittee that he first began dealing with Mr. Amouzou in late 

2001, after receiving a telephone call from Mr. Wayland, who was then in Singapore, about a 

man in San Diego associated with the Central Bank of Angola who needed Mr. Heger’s help.1532 

Mr. Heger told the Subcommittee that he had never dealt with Mr. Wayland prior to that 

telephone call, but that he frequently received calls seeking legal assistance as a result of his 

international legal practice.1533 

Mr. Heger told the Subcommittee that he was told that Angola was reaching out to the 

United States after the Angolan civil war, and wanted to rebuild its roads, hospitals, schools, and 

infrastructure. He said that he was asked if he’d be willing to assist Angola achieve its goals, 

and that he agreed to do so. Mr. Heger told the Subcommittee that during his work with 

Mr. Wayland over the next year, he never met him in person, but communicated with him via 

telephone and email.1534 Mr. Wayland, who provided a South African passport in some 

documents, also used an address in Singapore.1535 

On December 2, 2001, Mr. Heger and Mr. Wayland signed a two-page agreement in 

which they agreed to work together and to maintain the confidentiality of their clients and their 

transactions.1536 The next day, December 3, 2001, Mr. Heger formed Euro-American 

Investments, LLC (EAI) under the laws of Nevada to facilitate the Angola project.1537 Mr. Heger 

is identified as the company’s “Owner/Managing Member/Beneficiary” as well as its “Director 

and CEO.”1538 Two additional “Directors” and “Member/Beneficiaries” were Mr. Wayland and 

Charles William Webster.1539 A “Description of Business Activities” stated that EAI’s primary 

purpose was:

“Legal consulting, world wide investments, including but not limited to, Real Estate, 

Precious Metals, Debt Instruments, Oil and Gas Reserves & Property, Marketing 

Products (such as Heavy Machinery) and/or other various opportunities that have been 

 

1532 Subcommittee interview of Jan Morton Heger, 7/22/08. 1533 Id. 1534 Subcommittee interview of Jan Morton Heger, 7/22/08. 1535 See Asset Funding, Private Placement Participation & Management Agreement, PSI-Heger-01-00105-23 

(agreement provides Mr. Wayland’s South African passport number); 8/11/02 Euro-American Investments, LLC 

Information Summary, PSI-Heger-01-00105 (provides Singapore address for Mr. Wayland). Mr. Wayland also used 

an email address ending in “@harvestdm.com” which matches a company based in Singapore called “Harvest 

Technology Pte Ltd.” That company’s address is the same as the one used by Mr. Wayland. See Harvest 

Technology Pte Ltd. entry at http://worlddirectory.indiaetrade.com/Miscellaneous/h/H52.html (viewed 05/05/2009). 1536 12/2/02 Non-Circumvention, Non-Disclosure, and Confidentiality Agreement, PSI-Heger-01-03. 1537 See 8/11/02 Euro-American Investments, LLC Information Summary, PSI-Heger-0059-65. 1538 Id., at 0060 and 0062. 

1539 Id., at 0062. Mr. Heger brought Mr. Webster into the project over the objection of Mr. Wayland. In an August 

17, 2002 email to Mr. Heger, Mr. Wayland stated: “I told you I do not want to have anything to do with Charles 

Webster as I just have bad gut feeling, which says, ‘stay away’.” PSI-Heger-01-00252. Mr. Wayland continued: “I 

told you I would like to work with you and when it was decided to use [EAI] for the Angolan money, which is the 

customer I have brought to the table, it would be on a basis that I would deal with Jan Heger .... [T]he deal I have 

put together with the Angolans is that they get 75% profits and EAI gets 25%. I also stated that if you want to leave 

it with EAI, this means 50% to Stanley Wayland and 50% to Jan Heger. ... I stated that if you wanted to include 

Charles Webster, it would be from your side, i.e. out of your 50% of the profits.” 
286 

presented such as these very funds as have been received from the Angolan 

Government, Central Bank of Angola.” 1540 [Emphasis in original.]

On July 23, 2002, MSA, Inc. and EAI entered into a 19-page “Asset Funding, Private 

Placement Participation & Management Agreement” regarding investment of the $50 million in 

Angolan state funds.1541 MSA, Inc. was represented by Mr. Amouzou, while EAI was 

represented by Mr. Wayland. The following chart summarizes key aspects of the agreement. 

Key Elements of 2002 MSA‐EAI Agreement

FINANCIAL PROGRAM  “[A]ny financial investment, which shall return above average returns and shall consist

of, but not be limited to, the buying and selling of Bonds or Bank Instruments.”  

PARTIES  “Project Participant”:  Euro‐American Investments LLC represented by Stanley Wayland

 “Financial Participant”:  MSA, Inc. represented by Mehenou S. Amouzou

TERM One Year

GENERAL

REPRESENTATIONS

 MSA, Inc. is the beneficial owner of $50 million and this is “...GOOD CLEAN AND

CLEARED BANK FUNDS.”  

 Wayland will open a bank account in the name of EAI, Inc. at Merril Lynch – London to

purchase a T‐Bill in the name of MSA, Inc.  

 Wayland will instruct Merril Lynch to issue a  “S.W.I.F.T. from M.L. [Merril Lynch] that

their client [Wayland]...will immediately purchase a T‐Bill for a value USD 50.0 million”

 Amouzou will then use the T‐Bill as collateral for a “margin credit facility”  

 “The full value of the margin credit amount...will be used for and on behalf of the

Financial Participant [Amouzou]”

 “The T‐Bill ... will be blocked as the collateral for the margin credit advance”  

REPRESENTATIONS

AND WARRANTIES  

 “Has the relationships with one or more financial institutions that are capable of

providing a Financial Program for Project Financing in the amount of USD 50.0 million”

 “has the knowledge, relationships, ability to acquire the necessary Bank Instruments,

and the financial strengths to operate and manage Financial Program(s)”

 Will use the “collateral” ($50 million) to obtain a “Instrument Contract or Contracts” to

purchase “Bonds or Bank Instruments” and “re‐purchase” these “bonds or Bank

Instruments”  

STRUCTURE OF

PROFITS

 75% of profits due to Amouzou / MSA, Inc. will be invested in “humanitarian projects”

 Profits “shall amount to a minimum of 100% of the face value of the principal, which is

USD 50.0 Million will accrue on a monthly basis”  

 Profits shall be placed in “an offshore margin account in a securities firm for the use of

the above mentioned parties [Amouzou and Wayland]”   

OTHER PROVISIONS

 Wayland will open a bank account in the name of MSA, Inc. to receive 99% of Financial

Participant’s (MSA, Inc.) share of profits and a separate bank account in the name of Dr.

Mehenou S Amouzou to receive 1% of Financial Participant’s share of profits.  “Both of

the above banking accounts will be opened at Bank Crozier in Granada.”  

 Upon opening the aforementioned accounts, Wayland / EAI, Inc. will “...commence

tranching of the Financial Program” and “all profits from all Financial Programs shall be

deposited” in Amouzou’s Bank Crozier accounts.  

 Confidentiality Clause:  “the bank information and the commerce contemplated herein

are of [a] highly confidential nature.”

 Non‐Circumvention:  Ensures confidential and proprietary nature of all relevant

contacts, banks, individuals, and groups involved.  

Chart prepared by Subcommittee 

 

1540 8/11/02 Euro-American Investments, LLC Information Summary, PSI-Heger-0063. 1541 Asset Funding, Private Placement Participation [&] Management Agreement, PSI-Heger-01-00105-123. 
287 

After the Asset Funding, Private Placement Participation & Management Agreement was 

signed, Mr. Heger, representing EAI, signed a one-page “Private and Confidential Agreement” 

with Diane Conners of VH3 Holdings, LLC, to invest the $50 million.1542 This July 29, 2002 

agreement promised that the $50 million investment would reap a highly unlikely monthly return 

of 300%, for which a 7% fee would be paid to VH3Holdings: 

 

“It has been represented by Dianne Conners, both individually and as part of VH3 

Holdings LLC that the returns of Fifty Million USDollars ($50,000,000.00) to be 

invested by Euro-American Investments LLC is and shall be a[t] Three Hundred Percent 

(300%) per month. Based on this representation Euro-American Investments has agreed 

to pay Seven Percent (7%) of the profits to any and all intermediaries to VH3 Holdings 

LLC, as paymaster for any and all intermediaries as evidenced by that certain Payment 

Instruction dated July 18th, 2002.” 

The agreement also stated that if the investment return were 150% “or less,” EAI would 

nevertheless pay VH3 Holdings 3% of the profits. 

Treasury Bill Transfer Proposed. Beginning in mid-July 2002, Mr. Amouzou began 

advocating use of the $50 million to purchase U.S. Treasury bills and employing Mr. Wayland 

and his company, EAI, to handle the related investment project. On July 15, 2002, for example, 

Mr. Amouzou sent Mr. Jaime an “investigative report” on Mr. Wayland prepared by MSA, Inc.’s 

attorney, Brian Gard, that apparently strongly supported using his services.1543 On July 17, 2002, 

Mr. Amouzou sent a letter to Dr. Jaime recommending two solutions to the “time element 

associated with the transfer of 50 million dollars into MSA, Inc. bank account for the funding 

process.”1544 The letter said the first solution was to purchase a one-year U.S. Treasury bill to be 

allocated to MSA, Inc., deposited in a brokerage account, and returned to BNA after the 

investment project was completed. The second solution was to send the $50 million to a trading 

“Group based in London that works with two prime Banks, one in Zurich and the other in 

Germany.”1545 

On July 21, Mr. Amouzou sent Dr. Jaime a letter stating that Mr. Wayland held “one of 

only ten trading license[s] issued by the Federal Reserve Bank in the world,” that he “controls all 

the Asian Market including Japan,” and that he is “able to coordinate the purchase and transfer of 

the 50M in a T-Bill for us on an immediate basis (approximately 2 days).”1546 On July 22, 2002, 

Mr. Amouzou sent a letter to Dr. Jaime stating that Mr. Wayland “is the most qualified trader I 

have talked to since being involved in these types of matters.”1547 On July 24, 2002, 

 

1542 7/29/02 email from Mr. Heger to Mr. Wayland re “50m ANGOLA” and Private and Confidential Agreement, 

PSI-Heger-01-00303-04. 

1543 PSI-Amouzou-08-0310. Mr. Amouzou did not provide a copy of this report to the Subcommittee. 1544 7/17/02 letter from Mr. Amouzou to Dr. Jaime, PSI-Amouzou-11-0896. The letter’s reference to a “time 

element associated with the transfer” is unclear. 1545 Id. 1546 7/21/02 letter from Mr. Amouzou to Dr. Jaime, PSI-Amouzou-08-0309-10. According to the Federal Reserve, 

“the Federal Reserve does not license or register traders, does not have agents who process or oversee investments, 

and does not sanction, authorize, license, or otherwise administer any type of investment program or plan for the 

public in the United States or abroad.” Federal Reserve Bank of New York, Circular 10858, July 19, 1996. 

1547 7/22/02 letter from Mr. Amouzou to Dr. Jaime, PSI-Amouzou-11-0895. 
288 

Mr. Amouzou wrote Dr. Jaime that Mr. Wayland approved of the proposed Angolan 

“humanitarian project”: “In all the years he has been trading and observing the Monetary Funds 

and World Bank, he [Mr. Wayland] has never seen such a logical and well structure[d] plan as 

our Humanitarian project.”1548

 At some point, Mr. Wayland prepared a document entitled, “Instructions to Angola 

Government” with step-by-step instructions on using the $50 million to purchase Treasury 

bills.1549 At the time the instructions were written, Mr. Wayland was expecting to use Merrill 

Lynch in the transaction rather than Wells Fargo, and for the Treasury bills to be held in the 

name of MSA, Inc. rather than BNA, as actually happened. At the end of the document, 

Mr. Wayland cautioned against disclosing too much information: 

“There is no need to notify HSBC London of any other aspects of the Agreement or the 

terms of the agreement between MSA, Inc., EAI or the Angolan Government, of why the 

Angola Government is purchasing a T-Bill under the name of MSA Inc and there is no 

need to notify HSBC London other than the fact that the T-Bill will be held at Merrill 

Lynch for a period of 13 months and will be returned to the Angolan Government bank 

account at HSBC London, for safekeeping within 13 months. 

Please make sure that the Angola Government authorizes these instructions and notifies 

HSBC London of these requirements. 

There is no reason whatsoever for HSBC to know anything more than the fact that the 

US$50 million has been used for the purchase of T-Bill.”1550 

On August 2, 2002, Dr. Jaime, in his capacity as “The Governor of BNA,” signed a 

“Letter of Authority” on BNA stationery informing HSBC that BNA “will supply, on behalf of 

the Angolan Government, a Fifty Million American Dollar Treasury Bill to be used as collateral 

by MSA, Inc.” to raise funds for Angolan development projects.1551 

On August 6, 2002, Mr. Heger, representing EAI, sent a letter to the U.S. Treasury and 

State Departments stating that Angola planned to “place at minimum Fifty Million USDollars 

into a private corporation here in the United States of America” to support development projects 

in Angola. The letter stated that EAI had been selected to receive the funds, and asked if the 

United States or Treasury Department had “any objection and/or restrictions” regarding EAI’s 

use of the funds and whether EAI needed any “special authorization or clearances” to 

proceed.1552 On August 23, 2002, the Treasury Department’s Office of Foreign Assets Control 

(OFAC), responsible for administering U.S. trade restrictions related to Angola, responded: 

 

1548 PSI-Amouzou-11-0173. Mr. Amouzou even claimed in an undated email to Dr. Jaime: “Please be advised that 

the US Treasury has advised the Stanley Wayland (Group) that they would like to appoint MSA, Inc. as the Liaison 

between Africa and the US Treasury.” PSI-Amouzou-08-0260. See also 9/2/02 letter from Mr. Amouzou to Dr. 

Jaime re Mr. Wayland’s alleged influence with U.S. government officials, PSI-Amouzou-08-0259.

1549 Undated “Instructions to Angola Government,” prepared by Mr. Wayland as Director of EAI, PSI-Heger-01-

00265-66. 

1550 Id., at 00266. 1551 8/2/02 Letter of Authority signed by Dr. Jaime, PSI-Heger-01-00278. 1552 8/6/02 letter from EAI to U.S. Treasury and State Departments, PSI-Heger-01-0025-26. 
289 

“The acceptance of investment funds from the Central Bank of Angola and the 

performance of humanitarian services in Angola are not prohibited by the Regulations 

provided that these activities do not involve the proscribed activities listed above. ... 

Absent a complete list of all Angola related transactions you ... expect to undertake, we 

are unable to confirm that all of your transactions do not require an OFAC license.”1553

 $50 Million Transfer to HSBC. The following week, Dr. Jaime initiated the process 

that led to the actual purchase of the U.S. Treasury bills. First, on August 13, 2002, acting in his 

capacity as BNA Governor, he alerted HSBC Equator Bank in London (HEQB) that he would be 

sending the bank $50 million to be used to purchase T-Bills for BNA: 

“You will receive in our current account from Citibank/London USD 30,000,000.00 for 

value date 13 Aug 02 and USD 20,000,000.00 for value date 14 Aug 02. Both amounts 

are to apply for the execution of the above instructions. Please purchase in our name and 

on our behalf United States Treasury Bills or the equivalent in US Government debt 

obligations with a maturity of August 2003 in an aggregate amount of fifty million 

United States Dollars (U.S. 50,000,000.00) to be held in our name of the books of your 

affiliated bank HSBC Bank USA Issuer Services. We agree to pay your standard 

commission rate and custodial fees. Best regards, Aguinaldo Jaime - Governor”1554

The same day, August 13, 2002, Citibank wire transferred $30 million from BNA’s 

Citibank London account to BNA’s London account at HEQB.1555 The next day, August 14, 

2002, Citibank wire transferred another $20 million to the same account.1556 

 Next, Dr. Jaime opened Institutional Collateral Account No. [xx-xxxxxx]35 (hereafter 

“collateral account”), a new securities account held in the name of BNA at HSBC USA in New 

York.1557 Dr. Jaime was the sole signatory on the account.1558 He also signed an “Institutional 

Collateral Account Agreement” which set out the investment parameters for the account and 

which stated that Dr. Jaime, “on behalf of the Customer [BNA], will direct all trading in the 

Account.”1559 A trust officer from the HSBC USA Corporate Trust Department was assigned to 

handle transactions related to the new account.1560 

HSBC Purchase of Treasury Bills. On August 14, 2002, HEQB transferred the $50 

million to the new HSBC USA collateral account, and the HSBC USA trust officer used the 

 

1553 8/23/02 letter from OFAC to EAI, PSI-Heger-01-0022. 1554 8/13/02 Swift message, PSI-Amouzou-07-0514. 1555 8/13/02 HEQB account statement, HSBC-PSI 002286. 1556 8/14/02 HEQB account statement, HSBC-PSI 002302. 1557 HSBC Money Transfer Detail, HSBC-PSI 037258. See “Institutional Collateral Account Agreement,” HSBCPSI 037196-202. The agreement is signed by Dr. Jaime and dated August 14, 2002, Id. at 037202, but it may have 

been actually signed more than a week later on August 26, 2002. See 8/26/02 email, HSBC-PSI 037249 (“the 

Governor executed two originals of the Institutional Collateral Account Agreement today”). 

1558 See, e.g., 12/13/02 internal HSBC email, HSBC-PSI 037185-86 (“there is only the one signatory with authority 

over the account”). 

1559 HSBC-PSI 037202. 1560 8/13/02 HSBC email assigning the account to a trust officer, HSBC-PSI 037261. 
290 

funds to purchase several one-year U.S. Treasury bills with a total value of $49,994,363.37.1561 

The T-bills were held in the name of BNA. 

 The same day, August 14, 2002, Mr. Wayland sent Mr. Amouzou a list of requests and 

instructions regarding transferring the T-Bills from the BNA account at HSBC in New York to 

the Heger account at Wells Fargo Investment Services LLC in California.1562 Mr. Wayland 

requested copies of the T-Bills actually purchased, the Swift message instructing HSBC to buy 

the T-Bills, and a ledger printout showing the account name, number, and balance; as well as a 

letter from HSBC stating that they had purchased the T-bills on behalf of the Government of 

Angola. Mr. Wayland stated: “We can only complete the assignment once the above 

documentation is supplied.” 

Mr. Wayland also instructed Mr. Amouzou about what to say to HSBC USA to ensure 

that it transferred the T-Bills to the Heger account at Wells Fargo Investment Services in 

California, and cautioned against answering any questions about the transaction: 

“The Central Bank of Angola is the client and owner of the funds and therefore, [does] 

not need to answer HSBC’s questions about why they must transfer the T-Bill to Wells 

Fargo. 

The simplest and best reply is that you, as client want to deposit and hold this T-Bill in 

the Securities account with Wells Fargo Investment (Member of the New York Stock 

Exchange) and that we do not want this to be left in London. No other explanation is 

required to HSBC London. 

As Central Bank of Angola is the client, HSBC must and are required to follow the 

client’s instructions, i.e. this is what we request and instruct you (HSBC) to carry out. 

We await your soonest response as we are under pressure as we will be able to begin 

private placement investment on Monday next week, if the T-Bill and the above 

documentation is supplied, latest tomorrow.”1563 

 

On August 17, 2002, Mr. Heger sent a memorandum to Mr. Wayland and Mr. Webster 

regarding the transaction: 

“[T]here is absolutely no doubt that EAI will be receiving the sum of 50Million 

USDollars and hopefully an additional Fifty Four Million USDollars soon for a total to 

One Hundred Four Million USDollars or more in the form of USTreasury Bills. ... To 

 

1561 See HSBC USA affidavit by HSBC USA trust officer, HSBC-PSI 037271-72. This affidavit indicates the 

Treasury bills were purchased on August 14, 2002. But see 8/15/02 Cash receipt, HSBC-PSI 037255; 8/15/02 

Security Master Detail, HSBC-PSI 037259. Specifically, BNA purchased a U.S. Treasury NT Stripped Principal 

note scheduled to mature on August 15, 2003, one year and one day after the purchase. The value at maturity would 

be $50,749,000, for a profit of $754,636.63. Stripped notes, or “STRIPS,” enable investors to hold separate the 

interest and principal of certain Treasury notes as separate securities. Investors receive payment at maturity instead 

of periodic interest payments. 

1562 8/14/02 email from Mr. Wayland to Mr. Amouzou, forwarded to Mr. Heger, PSI-Heger-01-00267-68. 1563 PSI-Heger-01-00268. 
291 

the best of my knowledge EAI will have these T-Bills in the Wells Fargo Securities 

Account.”1564

Mr. Wayland responded a few days later by reminding Mr. Heger that they had “agreed on the 

telephone that we first finished the US$50 million and once this is in the Wells Fargo Security 

account, we will then proceed with the other transactions, i.e. not to rock the boat at the current 

time.”1565 He also sent Mr. Heger an agreement that he characterized as memorializing their 

understanding that “the transaction with Angola would be channeled through Euro-American 

Investments, LLC (EAI),” the “profits would be shared between Jan M Heger (50%) and Stanley 

Wayland (50%),” and “we have to pay some of our income (1%) before we split 50/50, to the 

parties who brought us this transaction.” 

T-Bill Transfer to Heger Account. On August 20, 2002, on BNA stationery, Dr. Jaime 

signed a one-page “Deed of Assignment” which assigned the $50 million in Treasury Bills from 

BNA to EAI for unspecified “valuable consideration”: 

“I Dr. Aguinaldo of sound mind and body hereby certify under penalty that I am the 

authorized signatory and have the legal right as Governor of the Central Bank of Angola to 

state that the Central Bank of Angola is the sole unencumbered owner of the Forty Nine 

Million, Nine Hundred and Ninety Four Thousand, Three Hundred and Sixty Three United 

States Dollars of U.S. Treasury Bill .... 

FOR VALUABLE CONSIDERATION ... I Dr. Aguinaldo Jaime ... do hereby freely, 

irrevocably, and unconditionally assign, convey, and transfer any and all right, title, and 

interest to Euro-American Investments LLC of this instrument or certificate described as 

United States Treasury Bill. 

This assignment shall be for the period of one (1) year and five (5) Banking Days from the 

date of this Deed of Assignment in order to satisfy the terms of the agreement between MSA, 

Inc. and Euro-American Investments, LLC dated 18th July, 2002. Specifically is the fact that 

the Treasury Bill, including any and all right, title and interest earned, will be returned to the 

Central Bank of Angola unencumbered at the end of the term of this assignment, free of any 

and all liens .... Any and all original certificates shall forthwith be forwarded directly to 

Euro-American Investment LLC via bonded courier addressed as follows: Wells Fargo 

Investments ... Account name: Mr. Jan M. Heger, Laguna Niguel, California 92677, 

Securities Account No W41477598, for the benefit of Jan M. Heger, CEO, Euro-American 

Investments, LLC ....”1566 [Emphasis in original.] 

On August 22, 2002, Mr. Heger sent a letter to Wells Fargo Investment Services stating 

that the securities account “of Jan Morton Heger for and on behalf of Euro-American 

Investments LLC which is my LLC,” Account No. 41477598, would soon receive a “United 

 

1564 8/17/02 email and memorandum from Mr. Heger, PSI-Heger-01-00255-57. 1565 8/19/02 email and agreement from Mr. Wayland, PSI-Heger-01-00252-54. 1566 8/20/02 Deed of Assignment, HSBC-PSI 037243. 
292 

States Treasury Strip Obligation.”1567 Mr. Heger had opened this account more than a year 

earlier, on April 26, 2001.1568 In fact, it would be nearly a month before the transfer took place. 

 On or about September 5, 2002, Mr. Heger telephoned HSBC to request that the T-Bills 

held in trust for BNA be transferred to his account at Wells Fargo Investment Services in Laguna 

Beach, California.1569 His call triggered an inquiry within HSBC.1570 On September 9, 2002, an 

HSBC USA official wrote in an internal email that HSBC is “not familiar with an intent by BNA 

to have these securities held by Wells Fargo Bank. Mr. Heger is unknown to us. In the event 

that BNA wishes to transfer these securities to Wells Fargo, our recommendation would be that 

they provide you with the required AUTHORIZED instructions e.g. by SWIFT.”1571 

 The same day, September 9, 2002, Mr. Amouzou sent a letter to Dr. Jaime asking him to 

issue written instructions to HSBC to deliver the T-Bills to Wells Fargo by September 11.1572 

Mr. Amouzou also asked Dr. Jaime to provide Mr. Heger with the documentation related to the 

T-Bills, so that Mr. Heger could determine why they had not yet been delivered. 

 On September 10, 2002, Mr. Heger spoke with the HSBC USA trust officer for the BNA 

collateral account and then sent an email to Dr. Jaime requesting that Dr. Jaime send a Swift 

message to the trust officer to authorize transfer of the T-Bills from HSBC to Wells Fargo.1573 

Mr. Heger provided specific language for Dr. Jaime to use in the Swift message.1574 That 

language not only requested the transfer, but also requested closure of the BNA account at HSBC 

USA.1575 

 

 The next day, September 11, 2002, Dr. Jaime sent the Swift message to the HSBC trust 

officer, using Mr. Heger’s suggested language.1576 Shortly thereafter, the trust officer forwarded 

 

1567 8/22/02 letter from Mr. Heger to Wells Fargo Investments, PSI-Heger-01-0045. The Treasury Bills were 

actually being sent from HSBC USA rather than HSBC London. 

1568 9/18/02 internal Wells Fargo email discussing Heger accounts, WF0098. This account was one of two that 

Mr. Heger opened at Wells Fargo, the other being a personal checking account, Account No. 2018432765, opened 

on April 26, 2001. Id. According to the signature card for the second account, Mr. Heger told the bank that he was 

expecting a $300 million wire transfer. Mr. Heger apparently also told the Wells Fargo broker assigned to his 

brokerage account that, in 2001, the account would receive a $350 million wire transfer. Neither account ever 

received that wire transfer in 2001. 

1569 9/5/02 HSBC internal email, PSI-Heger-01-00141. 1570 See HSBC internal emails, PSI-Heger-01-00140-42. 1571 9/9/02 HSBC internal email, PSI-Heger-01-00140. [Emphasis in original.] 1572 9/9/02 letter from Mr. Amouzou to Dr. Jaime, PSI-Amouzou-03-0008. 1573 9/10/02 email from Mr. Heger to Dr. Jaime, PSI-Heger-01-00241. The HSBC trust officer told the 

Subcommittee that he recalled speaking with Mr. Heger at some point, but did not recall the conversation. 

Subcommittee interview of HSBC officials, May 7, 2008. 

1574 9/10/02 email from Mr. Heger to Dr. Jaime, PSI-Heger-01-00241. 1575 That same day, September 10, 2002, Mr. Heger sent a second letter to Dr. Jaime seeking to take a more 

prominent role in BNA’s dealings. PSI-Amouzou-11-0140-41. In the letter, Mr. Heger wrote: “After some serious 

thoughts with regard to what has happened at HSBC I have a suggestion for you that may smooth out all your 

USDollar Accounts where ever they may be located. My suggestion is ... that you consider putting me with you and 

the Central Bank of Angola on any and all USDollar Accounts wherever they may be located.” Mr. Heger claimed 

he was able to communicate directly with the U.S. Treasury Department and could assist with any problems.

1576 9/11/02 Swift message from Dr. Jaime to HSBC USA, HSBC-PSI 037315. See also 9/11/02 fax from Dr. Jaime 

to Mr. Amouzou, PSI-Amouzou-08-0317. 
293 

the message to a colleague at HEQB in London, but also indicated that he would have preferred a 

signed letter from Dr. Jaime.1577 

 The next day, September 12, 2002, the head of the HEQB office in Angola told her 

colleagues that she personally spoke with Dr. Jaime, and he confirmed the transfer of the T-Bills 

to Wells Fargo. She wrote: “As you know, the Governor would like very much to have the 

securities with HSBC USA, however, the entities who will provide the financing want it with 

Wells Fargo. We should not be disappointed as more business is to come.”1578 The same day, 

the HSBC USA trust officer told his colleague at HEQB London: “I will be delivering the 

securities to the account of Jan Morton Heger at Wells Fargo Bank, and in turn will close the 

Collateral Account .... I appreciate your help in confirming the delivery instructions, but as I 

mentioned, it is unusual to deliver corporate customer assets to a personal account.”1579 His 

HEQB colleague in London responded: “We discussed this matter directly with the Governor of 

BNA on 3 separate occasions on Tuesday and Wednesday of this week. The Governor having 

reviewed the matter in detail, reiterated the instructions.”1580

On September 13, 2002, a senior HSBC official told the trust officer to proceed with the 

transfer: 

“[T]he Governor of the Bank of Angola was advised of our concerns about sending the 

T-Bills to an account in the name of an individual, but that is how we are to proceed with 

the transaction.”1581 

That same day, September 13, 2002, HSBC USA transferred the T-Bills to Mr. Heger’s personal 

brokerage account No. 41477598 at Wells Fargo Investment Services in California.1582 A Wells 

Fargo account summary shows that, on that date, Mr. Heger’s account was credited with 

securities valued at $49,927,128.75.1583 

Wells Fargo Returns T-Bills. In the meantime, Wells Fargo Investment Services had 

become increasingly concerned about the $50 million transfer. On September 9, 2002, a Wells 

Fargo Investment financial advisor sent an email to his colleagues that Mr. Heger was showing 

Wells Fargo personnel “weird papers” regarding a $50 million transaction involving the Central 

Bank of Angola.1584 He closed the email by asking “how soon can this account be closed?” 

A Wells Fargo branch employee requested additional information about Mr. Heger from 

a private due diligence company. In a Friday, September 13, 2002 email, the Wells Fargo 

employee relayed that firm’s warning about the transaction:

 

1577 9/11/02 HSBC internal fax, HSBC-PSI 037330. 1578 9/12/02 HSBC internal email, HSBC-PSI 037306-07. 

1579 9/12/02 HSBC internal email chain, HSBC-PSI 037220. 1580 Id. 1581 9/13/02 HSBC internal email, HSBC-PSI 037219. 1582 Wells Fargo Online Brokerage account statement as of 9/13/02, PSI-Heger-01-0012. The transfer was completed 

even though Dr. Jaime had used an incorrect account number in his SWIFT message. 1583 Id. 1584 9/9/02 Wells Fargo internal emails, WF0106. 
294 

“[H]e says the 49 million in T-Strips for the account is most likely fraudulent. There is a 

positive MIS hit on Jan Morton Heger where he was involved with another letter of credit 

scam with another broker dealer. (Bank of Philippines) ... Also, he believes the T-Strip 

delivery is a ‘FAKE, (someone was probably bribed to send it). ... [MIS] says the next 

step for this client is to use the brokerage account to print statements, correspondence, 

online stmts, proving that they have over 50 million with Wells Fargo Investments and 

use it to perpetrate other scams. All it takes is an unsuspecting employee or branch.”1585 

In response, the Wells Fargo Vice President of Investigative Services sent an email to his 

colleagues notifying them that Wells Fargo had returned the T-bills to HSBC, due to 

“unanswered questions” regarding the transaction.1586 Wells Fargo told the Subcommittee that it 

returned the T-bills despite having been contacted by Mr. Heger requesting their release.1587 

 On Monday, September 16, 2002, Wells Fargo closed the Heger account.1588 Mr. Heger 

was notified by a fax sent to his office the same day and by an overnight letter that arrived 

September 17, 2002.1589 Mr. Heger told the Subcommittee that he was upset by Wells Fargo’s 

actions.1590 Following unsuccessful attempts to reach Wells Fargo officials by telephone, 

Mr. Heger sent a fax to Wells Fargo threatening to involve “Treasury Compliance.”1591

 

 According to handwritten notes dated September 16, 2002 from a Wells Fargo 

compliance officer, Mr. Heger called Wells Fargo throughout the day, and she concluded that it 

was “not a good idea to let this guy have our direct number because he will pass it on and try to 

do more fraud.”1592 A September 17, 2002 email from another Wells Fargo employee echoed the 

same concern: “I opted not to show [my phone number to Mr. Heger] because he will pass on 

my phone number and say, ‘call [me] at WFI and he will verify that 49 mil came in.’”1593 

 

 On Tuesday, September 17, 2002, HSBC USA Trust Operations accepted the T-Bills 

from Wells Fargo and returned them to the BNA collateral account that was supposed to have 

been closed earlier, but was not.1594 

 

1585 9/13/02 Wells Fargo internal email, PSI-Wells_Fargo-04-0026-27. 1586 9/13/02 Wells Fargo internal email, PSI-Wells_Fargo-0026. 1587 Subcommittee interview of Wells Fargo officials, September 16, 2008. 1588 PSI-Wells_Fargo-04-0026, 28. 

1589 9/16/02 letter from Wells Fargo Investments to Mr. Heger, PSI-Wells_Fargo-03-000. 

1590 Subcommittee interview of Jan Morton Heger, July 22, 2008. 

1591 9/16/02 fax from Mr. Heger to Wells Fargo, PSI-Wells_Fargo-03-001. See also 8/22/02 letter from Mr. Heger 

to Wells Fargo Investments, PSI-Heger-01-00248 (date may be mistaken and should have been 9/22/02). In 

addition, on or about September 23, 2002, Mr. Heger retained the services of Howard K Schwartz, Attorney at Law, 

to represent his interests regarding the closure of his Wells Fargo Securities account and reversal of the Treasuries 

transfer, WF0097. 

1592 9/16/02 Wells Fargo compliance officer’s handwritten notes, PSI-Wells_Fargo-04-0032. See also 9/16/02 fax 

from Mr. Heger to Wells Fargo, PSI-Wells_Fargo-03-001. 

1593 PSI-Wells_Fargo-0091. On or about September 23, 2002, Heger retained the services of Howard K Schwartz, 

Attorney at Law, to represent his interests regarding the closure of his Wells Fargo Securities account and reversal 

of the Treasuries transfer, WF0097 

1594 9/17/02 HSBC internal emails, HSBC-PSI 037218. 
295 

Attempted Transfer to Comerica Bank. Three days later, on Friday of the same week, 

September 20, 2002, Dr. Jaime sent another Swift message to the HSBC USA trust officer 

instructing the bank to immediately transfer the T-Bills from the BNA account in New York to 

the “Jan M. Heger Esq. Attorney-Client Trust Account” at Comerica Bank in Costa Mesa, 

California.1595 He gave an incorrect account number. HSBC attempted the transfer twice that 

day, but it failed both times due to the incorrect account number.1596 The HSBC USA trust 

officer sent an email indicating HSBC was in communication with Comerica Bank to get the 

correct information,1597 but the transfer was never actually completed. 

 On Sunday, September 22, 2002, Mr. Heger sent a letter to Dr. Jaime asking him to 

transfer to his attorney-client trust account at Comerica Bank, not the $50 million in Treasury 

bills, but $200 million in cash from the BNA account.1598 He wrote: “I can upon receipt either 

keep it in cash or purchase a Treasury Bill[,] however it is preferable that this remain in cash.” 

He stated that his account would remain “blocked” and “unencumbered” for a period of one year 

and five days, and that “the transfer of the above mentioned funds ... would allow profits to 

begin to be received and thus start providing for the people of the Nation State of Angola.” The 

Subcommittee found no evidence that this requested transfer to the Heger account took place.1599 

 On Monday, September 23, 2002, Mr. Wayland sent an email to Dr. Jaime and 

Mr. Amouzou discussing the failure of the transfer of the T-Bills to the Heger account on the 

prior Friday.1600 Mr. Wayland wrote: “The first and most important aspect for all of us is to 

‘Keep our Cool’ .... There is absolutely no doubt that someone is trying to sabotage any and all 

effort[ts] of the Angolan Government from placing cash funds ... into investment programs.” 

Mr. Wayland wrote that “whoever is involved” would: 

“stop at nothing, will attempt to divide us, use every effort at their disposal to stop this 

transaction from proceeding. We must ascertain, for what reason HSBC are in position to 

frighten, Wells Fargo or for that matter any other bank .... WE ... [WILL] RECTIFY 

THE PROBLEM WITH THE ASSISTANCE OF THE SECRETARY OF THE 

TREASURY, NAMELY, MR. PAUL O’NEILL .... PLEASE BELIEVE WE HAVE 

POWERFUL FRIENDS.” [Emphasis in original.] 

 At some point, Dr. Jaime apparently ceased trying to transfer the T-Bills to Comerica 

Bank, and discussions turned to bank accounts in Switzerland. On September 28, 2002, 

Mr. Wayland sent an email to Mr. Amouzou regarding opening bank accounts for BNA in Basel, 

Switzerland. Mr. Wayland wrote: 

 

1595 See Swift message, HSBC-PSI 037216. See also HSBC internal emails, HSBC-PSI 037231. 

1596 See 9/23/02 HSBC internal email, HSBC-PSI 037232. 

1597 Id. 

1598 9/22/02 letter from Mr. Heger to Dr. Jaime, PSI-Heger-01-00232. 

1599 On September 25, 2002, Mr. Heger also sent Dr. Jaime an invoice for $100,000 for “Services rendered on behalf 

of” BNA. 9/25/02 invoice, PSI-Heger-01-00227. A typewritten “Note” at the bottom of the invoice stated: “We 

need to get at least 100Million transferred to our account located in Switzerland at your earliest convenience” and 

that “profits will be received within a short period of time thereafter.” 1600 9/23/02 email from Mr. Wayland to Dr. Jaime and Dr. Sato, PSI-Heger-01-00125. 
296 

 “[A]ll of us must meet in Basel, to open the bank accounts for BNA and [I] will get the 

two US Authorities to come to Basel after the funds reach Basel. If Jaime wishes to first 

open an account this is also OK, but then Jaime must meet me any day next week in 

Switzerland. ... This will therefore be two or 3 days after the first Meeting between 

Jaime and me.”1601 

Mr. Wayland also told Mr. Amouzou that he would receive payments confidentially: “I have set 

this up this way so absolutely no One has knowledge of payments to you. This can be to your 

account in France and or other accounts.” 

Sometime during the next two weeks, Mr. Amouzou and Dr. Jaime met with 

Mr. Wayland in Switzerland. On October 14, 2002, Mr. Wayland sent a fax to Mr. Amouzou 

stating: “I would like to thank you for traveling to Switzerland as I really enjoyed meeting both 

Dr. Jaime and you. I believe as friends, we can establish a long term relationship.”1602 The fax 

also contained instructions related to retaining the T-Bills at HSBC USA on the condition that 

HSBC supplied BNA with a “safekeeping receipt” that is “negotiable against the T-Bill.” 

Safekeeping Receipt. Two days later, on October 16, 2002, Dr. Jaime sent a letter on 

BNA stationery to HSBC USA asking it to “cancel all previous and pending trade requests” 

regarding the $50 million in T-Bills.1603 The letter then stated that the T-Bills “should remain on 

deposit in the account until maturity ... conditional a new Safekeeping Receipt is issued, with the 

wording ‘Safekeeping Receipt is negotiable against ...’” the T-Bills.1604 At the bottom, the letter 

contained a signature line for HSBC to indicate that it agreed to that condition. A week later, on 

October 25, 2002, HSBC faxed the letter back to Dr. Jaime with a signature from the HSBC trust 

officer acknowledging receipt of the October 16 letter and agreeing to its terms.1605 

Two weeks later, on November 1, 2002, HSBC sent Dr. Jaime a fax attaching a letter 

which had been signed by the HSBC trust officer for the BNA collateral account and which 

stated in part: “This Safekeeping Receipt is negotiable against US Treasury Strip, CUSIP 

#912820BG1.”1606 The trust officer told the Subcommittee that he was in a hurry to go on 

vacation and did sign the safekeeping receipt, but should not have.1607 He told the Subcommittee 

that such a receipt can be used like a bearer share financial instrument and, among other uses, 

can be used to transfer ownership of the referenced Treasury bills to a third party. HSBC told 

 

1601 9/28/02 email from Mr. Wayland to Mr. Amouzou, PSI-Amouzou-08-0194. 1602 10/14/02 fax from Mr. Wayland at “Virtual Architecture Ltd.,” to Mr. Amouzou, PSI-Amouzou-08-0358. 1603 10/16/02 letter from Dr. Jaime to HSBC USA, HSBC-PSI 037228-29. 1604 Id. HSBC USA had sent an earlier version of this letter as a proposed draft to Dr. Jaime. The draft stated that 

all previous trade requests related to the Treasury bills should be canceled and that the Treasury bills should remain 

on deposit “until further instruction from an authorized signatory.” 10/16/02 email from the HSBC USA trust 

officer and draft letter, HSBC-PSI 037226-27. Dr. Jaime apparently used this draft as the starting point for his letter 

which made HSBC’s retaining the Treasury bills “conditional” on its providing the specified “Safekeeping Receipt.” 1605 10/16/02 letter from Dr. Jaime to HSBC USA, HSBC-PSI 037228-29. See also 10/25/02 cover letter from 

HSBC to Dr. Jaime, HSBC-PSI 037211. 

1606 11/1/02 internal HSBC fax transmitting a copy of an unsigned version of the safekeeping receipt “that was 

signed” by the HSBC USA trust officer, HSBC-PSI 037211. HSBC was unable to locate a signed copy of the 

safekeeping receipt. See related correspondence, HSBC-PSI 037209-10. 

1607 Subcommittee interview of HSBC officials, May 7, 2008. 
297 

the Subcommittee that, even though the receipt was signed and faxed to Dr. Jaime, the original 

of the receipt never actually left the bank.1608

 On November 4, 2002, Dr. Jaime apparently pressed HSBC to release the safekeeping 

receipt with the trust officer’s original signature and bank seal. In a November 5, 2002 email, 

however, an HSBC compliance officer who had been asked for advice about how to handle the 

matter warned that the request might be “part of some elaborate scam to defraud the Central 

Bank of its securities.”1609 The compliance officer wrote: 

“This concerns your request to have HSBC Bank USA issue a ‘safekeeping receipt’ with 

respect to the Central Bank of Angola’s custody account holdings with wording 

indicating that the receipt is ‘a negotiable instrument’ .... You have advised that this 

request is being made in connection with a confidential lending arrangement .... If the 

securities are to be utilized to secure a lending facility why not enter into a standby letter 

of credit arrangement or have the account blocked via some type of pledge arrangement. 

This would be the way a custody account would typically be used as collateral and not 

via some type of negotiable receipt. ... HSBC Issuer Services does not issue ‘negotiable 

safekeeping receipts’ ... of the kind that you have asked for which are essentially bearer 

instruments. Were we to issue such a document we would be exposed as the Central 

Bank could at any time request us to transfer the Treasury Bills ... to a third party and we 

would have no way to prevent the transfer. ... These bearer instruments have been used 

in scams and have a negative connotation associated with them. A request to have us 

issue something like this to support what sounds like a secured credit facility is very 

unusual. Furthermore, your indicating that the transaction details are confidential and 

that there is tremendous pressure to have the receipt issued today makes the entire 

transaction look suspect to us.” 

The compliance officer continued: 

“This request coupled with the unusual request we received last month to transfer these 

same securities to an account maintained at another bank that was not in the name of the 

Central Bank concerns us. ... We are concerned that these unusual requests continue to 

come to us and that we are placed under tremendous pressure to agree to them. Based on 

what I see here it appears to me that this is part of some elaborate scam to defraud the 

Central Bank of its securities.”1610 

The head of the HEQB office in Angola responded: 

“Thank you very much for all your assistance in this matter which is most sensitive. 

I met with the Governor this morning to let him know that HSBC Bank USA is not 

comfortable about the issue of the document as requested by BNA. The Governor 

showed great concern as he was confident this time things would move and, according to 

 

1608 Id. 

1609 11/5/02 internal HSBC email chain, HSBC-PSI 037400-02. 1610 Id. 
298 

him, a first disbursement of $50mm is pending until this document is in place or another 

solution is found. 

Meanwhile I think it appropriate to clarify that the pressure to have the receipt issued 

yesterday, happened because BNA has been waiting for this receipt for 20 days, since 

October 16th, date when HSBC USA acknowledged and agreed with the issue of the 

Safekeeping Receipt in accordance with BNA’s request. Assuming the non issue of the 

document is the cause of the delay for a first disbursement under the arrangements 

between the Government and the other entity involved, BNA’s pressure is 

understandable. ... 

Mr. Heger, is the CEO & Managing Director of Euro-Investments LLC. ... Maybe you 

could investigate about the above company (in such a way that neither BNA or them 

know we are doing so), and hopefully the information obtained would give us all the 

peace of mind that we can continue to assist BNA in the implementation of, what they 

firmly believe, an important accomplishment for Angola. In case the information 

obtained would be negative, we would have to advise BNA not to proceed with the 

negotiations.”1611

The documents reviewed by the Subcommittee do not show that the suggested 

investigation took place. The documents also do not show that the original HSBC safekeeping 

receipt was provided to Dr. Jaime or that the T-Bills were transferred to any third party during 

November 2002. 

$50 Million Returned to BNA. One month later, on December 5, 2002, Dr. Jaime was 

appointed an Assistant to the Prime Minister of Angola. On December 12, 2002, he issued 

instructions to liquidate the Treasury bills at HSBC USA and return the $50 million to the BNA 

account at HEQB in London.1612 The head of the HEQB office in Angola wrote: “Please note 

that this is really urgent. BNA needs to sell the dollars to the commercial banks to pay the 

[public workers’] salaries.”1613 Later that day, she sent another email noting that “Aguinaldo 

Jaime is no longer the Governor,” and that someone else at BNA would have to authorize the 

transaction.1614 On December 16, 2002, a new BNA official, the director of the Department of 

Foreign Reserves, was given authority over the HSBC USA collateral account. 1615 

The new BNA official ordered the Treasury Bills to be sold and the sale proceeds to be 

transferred to the BNA account at HEQB in London.1616 On January 2, 2003, HSBC USA 

 

1611 Id. 1612 12/12/02 - 12/13/02 internal HSBC email chain, HSBC-PSI 037185-87. 1613 Id. at 037186. 1614 Id. at 037185. 1615 See 12/16/02 letters from the BNA Director of the Department of Foreign Reserves to HSBC USA, HSBC-PSI 

037181 and HSBC-PSI 037178. See also 12/13/02 internal HSBC email chain, HSBC-PSI 037182-84 and HSBCPSI 037177. 

1616 1/2/03 Swift message from BNA to HSBC, HSBC-PSI 037165. 
299 

complied,1617 and the next day, $50,288,889.76 in sale proceeds were wire transferred from the 

collateral account at HSBC USA to the BNA account at HSBC Equator Bank in London.1618 

(4) Analysis 

In the end, the $50 million was returned to the Angolan Central Bank, despite efforts 

extending over six months, from June to December 2002, by Dr. Jaime, Mr. Amouzou, 

Mr. Wayland, and Mr. Heger, to transfer the funds to a private account in the United States. 

Bank of America and Wells Fargo personnel reacted quickly to possible signs of a suspicious 

transaction and reversed the $50 million transfer; Citibank reacted less quickly but eventually 

responded by ending its banking relationship, not only with BNA, but with all Angolan 

government entities, including Sonangol. 

In contrast, HSBC personnel facilitated multiple wire transfers of the $50 million and the 

related Treasury bills in response to the instructions of a single BNA official, despite concerns 

about sending government assets to a private individual’s account, until a compliance officer 

warned about a possible scam. HSBC has not only continued to provide banking services to 

BNA in Angola and London, but may also be providing the Angolan Central Bank with offshore 

accounts in the Bahamas.

D. An Angolan Financial Institution: Moving Hundreds of Millions 

 of Dollars For Banco Africano de Investimentos 

A final set of Angolan accounts involves Banco Africano de Investimentos (BAI), a $7 

billion private bank in Angola whose largest shareholder is Sonangol, the Angolan state-owned 

oil company. BAI offers banking services to Sonangol, Angolans in the oil and diamond 

industries, and Angolan government officials, and its clientele is replete with Angolan PEPs. 

Over the last ten years, BAI gained entry to the U.S. financial system through accounts at HSBC 

in New York, using HSBC wire transfer services, foreign currency exchange, and U.S. dollar 

credit cards for BAI clients, despite troubling answers about its ownership and its failure to 

provide a copy of its AML procedures to HSBC. HSBC has designated Angola a “high risk 

country” and conducted annual reviews of the BAI account, but explicitly decided not to treat 

BAI as a PEP client, despite PEPs in BAI’s management and clientele and Angola’s ongoing 

corruption problem. 

(1) Background 

Banco Africano de Investimentos. Banco Africano de Investimentos (BAI) was 

established on November 13, 1996, and commenced commercial operations on November 14, 

1997, as the first fully privately owned bank in Angola.1619 It is now one of the largest private 

banks in the country. It is subject to regulation by Angola’s central bank, Banco Nacional de 

 

1617 1/2/03 internal HSBC email, HSBC-PSI 037157. 1618 1/3/03 HSBC USA Priority Payment – Confirmation, HSBC-PSI 037158; 1/3/03 HSBC cash disbursement 

order, HSBC-PSI 037159. 

1619 2007 HSBC Know Your Customer Profile of BAI, HSBC-PSI 036736-52, at 37 (citing “Clients Annual Report 

2005”); HSBC PSI 036668. 
300 

Angola (BNA).1620 BAI handles transactions in Angola using the Angolan currency, the 

kwanza.1621 

The founders of the bank include Mario Palhares, then a senior Angolan official at BNA; 

Jose Carlos Paiva, managing director of the key Sonangol subsidiary, Sonangol Ltd.; Joe Manuel 

Serrao, managing director of a Portuguese car company, Service Group Ltd.; and Theodore 

Jameson Gilleti, a British banker at Standard Chartered Bank.1622 BAI’s initial president was 

Aguinaldo Jaime, who left the bank to become head of BNA;1623 and two initial senior 

administrators were Joaquim Costa David, Angolan Minister of Finance and former head of 

Sonangol; and Ana Paula Gray, a banker with the South African Investec Bank, both of whom 

were made members of the board of directors.1624 In 1998, according to HSBC records, BAI had 

three branches, about 50 employees, and about $44 million in assets, including about $10 million 

in deposits.1625 

According to the latest Bankers Almanac, BAI now has 50 branches and about 900 

employees.1626 Its headquarters are in Luanda, the capitol of Angola. BAI’s chairman of the 

board is now Mr. Paiva, who is also chairman of the board of Sonangol; the vice chairman is Ms. 

Gray; and Mr. Giletti remains a director and key bank official.1627 BAI’s chief executive officer 

is Jose de Lima Massano, a former Sonangol executive, accountant, and banker.1628 Another 

BAI director is Manuel Domingos Vicente, who is also the chief executive officer of 

Sonangol.1629 The latest Bankers Almanac indicates that, as of December 31, 2008, BAI had 

assets with a total value of $7.6 billion.1630 

 

Sonangol, the Angolan state-owned oil company, has been BAI’s largest shareholder 

since the bank’s inception, and BAI is sometimes described as a Sonangol subsidiary.1631 BAI 

handles many of Sonangol’s banking services, and BAI’s senior officials have often 

simultaneously held senior positions at the oil company. BAI’s other owners include major 

financial institutions, former or current bank officials, and a handful of private corporations, 

some of whose owners have been concealed by BAI over the years, creating a source of friction 

between BAI and HSBC. 

 

1620 HSBC PSI 036668. 1621 2007 HSBC Know Your Customer Profile of BAI, HSBC-PSI 036740. 1622 1998 HSBC KYC profile for BAI, HSBC-PSI 036767-73, at 68; HSBC-PSI 036779; 10/25/06 internal HSBC 

email, HSBC-PSI 036625. Mr. Palhares, who later became BAI’s president and chairman of the board, left the bank 

in 2006. 

1623 1998 HSBC KYC profile for BAI, HSBC-PSI 036767-73, at 68; HSBC-PSI 036779. 1624 1998 HSBC KYC profile for BAI, HSBC-PSI 036767-73, at 68. 1625 1998 HSBC KYC profile for BAI, HSBC-PSI 036767-73, at 68, 72. 1626 Bankersalmanac.com entry for BAI, viewed 1/8/10; June 2008 Bankers Almanac entry for BAI. The 2007 

HSBC KYC profile of BAI, HSBC-PSI 036739, citing the Bankers Almanac and the “client’s 2005 Annual Report,” 

indicates that BAI then had 29 branches and 550 employees). See also BAI’s website, www.bancobai.co.ao. 1627 2007 HSBC KYC profile of BAI, HSBC-PSI 036739. 1628 Id.; June 2008 Bankers Almanac; 10/25/06 internal HSBC email, HSBC-PSI 036625.

1629 June 2008 Bankers Almanac; HSBC-PSI 036667. 1630 Bankersalmanac.com entry for BAI. Two years earlier, in 2007, BAI told HSBC that it had assets with a total 

value of about $1.2 billion. 2007 HSBC Know Your Customer Profile of BAI, HSBC-PSI 036740. But see June 

2008 Bankers Almanac in which BAI reports total assets as of December 31, 2006 of $2.3 billion. 1631 See, e.g., Wikipedia entry for BAI. 
301 

According to the Bankers Almanac, BAI’s current auditor is PricewaterhouseCoopers. 

As recently as 2005, its auditor was Ernst & Young.1632

U.S. Legal Requirements. When BAI opened its first U.S. account in 1998, U.S. money 

laundering laws were limited, and did not contain explicit requirements related to accounts 

opened by foreign banks or PEPs.1633 In October 2001, Congress enacted the Patriot Act which, 

among other provisions, strengthened U.S. anti-money laundering law to protect the U.S. 

financial system from misuse by terrorists, criminals, and corrupt foreign officials.1634 

One of the new provisions, Section 312, explicitly required U.S. financial institutions that 

opened accounts for non-U.S. financial institutions to “establish appropriate, specific, and, when 

necessary, enhanced due diligence policies, procedures, and controls that are reasonably 

designed to detect and report instances of money laundering through those accounts.”1635 In 

addition, if a foreign bank held an offshore banking license, was deemed uncooperative with 

international AML procedures, or was subjected to special AML measures by the U.S. 

Government, U.S. financial institutions opening accounts for that foreign bank were required: 

 “(i) to ascertain for any such foreign bank, the shares of which are not publicly traded, 

the identity of each of the owners of the foreign bank, and the nature and extent of the 

ownership interest of each owner; 

(ii) to conduct enhanced scrutiny of such account to guard against money laundering and 

report any suspicious transactions ... and 

(iii) to ascertain whether such foreign bank provides correspondent accounts to other 

foreign banks and, if so, the identity of those foreign banks and related due diligence 

information.”1636

Section 312 also required U.S. financial institutions, for the first time, to establish 

enhanced due diligence policies, procedures and controls for any private banking account “that is 

requested or maintained by, or on behalf of, a senior foreign political figure, or any immediate 

family member or close associate of a senior foreign political figure ... to detect and report 

transactions that may involve the proceeds of foreign corruption.”1637 This provision took effect 

in February 2002. The Patriot Act also made the acceptance of proceeds from foreign corruption 

offenses a money laundering crime, and made it clear that U.S. money laundering prohibitions 

applied to all foreign banks operating in the United States.1638 

 

1632 HSBC PSI 036668. 1633 On July 24, 1998, Republic National Bank nevertheless completed a know-your-customer due diligence review 

of BAI. Its review stated: “In terms of money laundering, Angola is considered as a ‘no priority’ country by the US 

State Department. Angola is an extremely difficult country to do business in, which combined with the country’s 

strict exchange control regulations, makes money laundering a practical impossibility. Even so BAI’s management 

is aware of international money laundering concerns and would be able to spot suspect transactions were they to 

come through. They require full identification of all their customers and are obliged to report suspicious 

transactions to the BNA (Central Bank).” HSBC-PSI 036773. 

1634 See, e.g., Title III of the Patriot Act, P.L. 107-56 (Oct. 26, 2001). 1635 Section 312 of the Patriot Act, codified at 31 U.S.C. 5318(i)(2)(A). 1636 Section 312 of the Patriot Act, codified at 31 U.S.C. 5318(i)(2)(B). 1637 Section 312 of the Patriot Act, codified at 31 U.S.C. 5318(i)(3). 1638 See Section 315 of the Patriot Act, codified at 18 U.S.C.1956(c)(7)(B)(iv)(adding foreign corruption offenses); 

and Section 318 of the Patriot Act, codified at 18 U.S.C. 1956(c)(6)(B)(adding foreign banks). 
302 

(2) HSBC USA Accounts 

In April 1998, BAI opened its first accounts at Republic National Bank in New York, 

Correspondent Account No. No. [xxxxxxx]47 and No. [xxxxxxx]22.1639 In December 1999, 

Republic National Bank merged with HSBC.1640 As of 2007, BAI had four accounts with HSBC 

USA: the first correspondent account, No. [xxxxxxx]47; two accounts opened on August 8, 

2000, Account Nos. [xxxxxxx]54 and [xxxxxxx]46, to establish a corporate credit card program 

for BAI clients and provide cash collateral to secure repayment of the credit card debt;1641 and an 

account opened on October 27, 2006, Account No. [xxxxxxx]30, to settle payments to Visa 

related to credit card charges.1642 

Over the years, BAI has used its HSBC accounts primarily to gain access to HSBC’s wire 

transfer systems so that BAI and its clients can send and receive U.S. dollar transfers across U.S. 

borders. BAI’s monthly wire transfers grew dramatically, for example, from 2003 to 2008. 

HSBC also provided BAI with foreign currency exchange services, in particular supplying it 

with U.S. dollars to meet its needs, which grew from $6 million in 1998,1643 to $30 million in 

2005, to $490 million in 2007.1644 In addition, HSBC has provided BAI with occasional 

certificates of deposits and overnight investments, and access by BAI clients to HSBC credit 

cards using U.S. dollars.1645 

HSBC USA manages the BAI account out of its New York office. The accounts are 

handled by a “Global Relationship Manager”; most recently, that Global Relationship Manager 

was based in HSBC offices in South Africa. According to HSBC records, BAI made minimal 

use of its U.S. accounts at first, but has made increasing use of its correspondent relationship 

over the years. In 2006, HSBC reported internally that the BAI accounts returned “sizeable” 

global revenues of $1.5 million, of which $1.2 million came from HSBC USA Payments and 

Cash Management Group.1646 

Documents reviewed by the Subcommittee show that Republic National Bank and then 

HSBC have performed annual AML reviews of the BAI accounts. Republic National Bank 

conducted a due diligence review when the bank account was first opened and developed a 

Know-Your-Customer profile for BAI in 1998, which was then updated annually.1647 Later, 

 

1639 “BAI Timeline of Accounts,” prepared by HSBC, HSBC-PSI 037864. A “correspondent account” is an account 

opened for a financial institution. 

1640 Id. 1641 Id.; HSBC-PSI 036774. 1642 2007 HSBC KYC profile of BAI, HSBC-PSI 036739. 1643 1998 HSBC KYC profile of BAI, HSBC-PSI 036767-73, at 71. 1644 See 3/15/07 HSBC Call Report, HSBC-PSI 036753-55. The Call Report states that “BAI’s primary reason to 

order USD banknotes is to allow the foreign corporation workers in Angola to withdraw their salaries in USD cash. 

They have a very large pool of corporate clients due to one of its major shareholders being Sonangol.” Id., at 

036754. 

1645 2007 HSBC KYC profile of BAI, HSBC-PSI 036740. 1646 2007 HSBC KYC profile of BAI, HSBC-PSI 036738; 12/21/06 internal HSBC email, HSBC-PSI 036689 

(“[t]his is a sizable HSBC Group client”). 

1647 “BAI Timeline of Accounts,” prepared by HSBC, HSBC-PSI 037864. See also 1998 KYC Profile for BAI, 

HSBC-PSI 036767-73; 2002 KYC profile for BAI, HSBC-PSI 036775-80; 2007 HSBC KYC profile for BAI, 

HSBC-PSI 036736-51. 
303 

HSBC established lower thresholds than it normally did to generate AML “alerts” from BAI wire 

transfers, due to Angola’s status as a “high risk country.”1648 The documents also show that, 

over the years, HSBC had several concerns with the BAI accounts, unsuccessfully raised those 

concerns with BAI, and when BAI failed to cooperate, nevertheless allowed the BAI accounts to 

continue operating. Those concerns included troubling answers about BAI’s ownership, 

including the extent to which the bank was owned and controlled by Politically Exposed Persons 

(PEPs) in Angola, and BAI’s failure to provide a copy of its AML procedures. In 2006, HSBC’s 

Financial Intelligence Group raised the issue of designating BAI as a “Special Category of 

Client” (SCC), the term HSBC uses to identify accounts opened for PEPs or other persons or 

entities of concern, but that suggestion was not followed.1649 Two years later, in November 

2008, HSBC reversed course and did designate BAI as an SCC.1650 

(3) BAI’s Hidden Owners 

Since BAI is a private bank with ownership that includes the Angolan national oil 

company and a number of Angolan PEPs, the identity of its owners is an important issue. For 

more than one year, from March 2006 to June 2007, HSBC made a sustained effort to obtain a 

clear understanding of the owners of BAI. In response, BAI disclosed some of its shareholders, 

but not all, claiming that two shell companies with 13.5% of the bank’s shares were unable to 

identify their individual owners and ultimately assigning the companies’ shares “temporarily” to 

BAI’s chairman of the board. In May 2007, confronted with BAI’s ongoing failure to provide 

complete ownership information, HSBC stopped pressing for the information. In response to 

Subcommittee questions, HSBC was unable to identify the owners behind more than 19.5% of 

BAI’s shares. At the same time, HSBC has continued to provide BAI with ready access to the 

U.S. financial system. 

1998 Ownership. In July 1998, within three months of opening the BAI account and 

prior to enactment of the 2001 Patriot Act, Republic National Bank completed a Know-YourCustomer (KYC) profile of BAI, which included a list of its shareholders.1651 The listed 

shareholders were the following: 

Sonangol, the Angolan-state owned oil company: 19% 

Grupo Credito Agricola, a Portuguese financial institution: 10% 

Service Group Angola, an affiliate of a Portuguese car company: 8% 

Investec Bank Ltd., a South African financial institution: 7.5% 

Ameron, a U.S. corporation: 6% 

Banco Pinto e Sotto Mayor, a Portuguese financial institution: 5% 

Dabas Management Ltd., a French corporation: 5% 

 

1648 2007 HSBC KYC profile of BAI, HSBC-PSI 036751. 

1649 2007 HSBC Know Your Customer Profile of BAI, HSBC-PSI 036738. See also Subcommittee interview of 

HSBC officials, September 22, 2008. 

1650 2/2/10 letter from HSBC’s legal counsel to the Subcommittee, at 2 (Sealed Exhibit). 1651 1998 Republic National Bank KYC profile of BAI, HSBC PSI 036764-65, 036767-73. This profile also 

contains information reflecting KYC due diligence efforts related to BAI over a two-year period, 1998 to 2000. 

5/6/08 email from HSBC’s legal counsel to the Subcommittee, item (3)(b), PSI-HSBC-36-0001-12.. Republic 

National Bank was under no explicit legal obligation at the time to obtain BAI’s ownership information; collecting 

the information was instead part of a routine internal due diligence procedure then in place at the bank 
304 

Brenco International, a French corporation: 4% 

Mota & Cia and Soares Da Costa, Portuguese construction companies: 6% 

Mactrotrade, a Portuguese company, and Endiama, the Angolan state-owned 

 diamond company: 4.5%.1652 

The BAI profile also noted that BAI has “28 shareholders of different nationalities,” with 4 

Angolans holding 36% of the shares, 17 Portuguese holding another 36%, and 7 persons from 

other countries holding 28% of the shares.1653

 

The document does not provide any further explanation of the shareholders. While most 

are large financial institutions or corporations, at least three, Brenco International, Dabas 

Management and Ameron are not.1654 The Subcommittee’s investigation indicates that Brenco 

International was beneficially owned by Pierre Falcone, a notorious Angolan arms dealer, and 

his business associate, Arkadi Gaydamak, as explained earlier.1655 From 2000 to 2001, 

Mr. Falcone was imprisoned in France while under investigation into his conduct in the arms and 

bribery scandal known as Angolagate. 

In 2001 and 2002, HSBC updated its Know-Your-Customer profile of BAI.1656 The 

shareholder list remained unchanged. By then the Patriot Act’s provisions had taken effect, 

requiring U.S. financial institutions to establish reasonable due diligence procedures for accounts 

belonging to foreign financial institutions to detect and prevent money laundering through those 

accounts.1657

2006 Ownership. During 2006, BAI provided several different lists of its shareholders. 

On March 16, 2006, for example, BAI gave HSBC the following list of owners: 

Sonangol: 17.5% 

Service Group: 8% 

Investec Bank Ltd.: 7.5% 

Jose Carlos Recio, a wealthy Angolan businessman: 7.5% 

Arcinella Assets, S.A.: 7% 

Sforza Properties S.A., a British Virgin Islands corporation: 6.5% 

Amer-Con Corp., a U.S. software company in Miami, Florida: 6% 

Banco Commercial Portugues S.A., a Portuguese financial institution: 5% 

Dabas Management Ltd.: 5% 

 

1652 1998 Republic National Bank KYC profile of BAI, HSBC-PSI 036767-73, at 68. 1653 1998 Republic National Bank KYC profile of BAI, HSBC PSI 036773. 1654 “Ameron” may refer to Amer-Con Corp., a Miami, Florida corporation with a branch in Angola, referred to in 

later BAI shareholder lists. See 2007 HSBC KYC profile of BAI, HSBC-PSI 036744. 

1655 See prior section on Falcone accounts. 1656 “BAI Timeline of Accounts,” prepared by HSBC, HSBC-PSI 037864; HSBC-PSI 036775-80 and 036736-52. 

See 2002 KYC profile for BAI, HSBC-PSI 036775-80. 

1657 Regulations implementing this and related due diligence requirements in the Patriot Act direct U.S. financial 

institutions to ascertain the ownership interests of persons with a 10% or greater ownership interest in a non-publicly 

traded foreign financial institution. See 31 CFR 103.176. HSBC determined to implement the statutory requirement 

by ascertaining the ownership interest of persons with a 5% or greater ownership interest in foreign financial 

institutions in high-risk jurisdictions. 5/6/08 email from HSBC’s legal counsel to the Subcommittee, item 3(d), PSIHSBC-36-0001-12.. 
305 

Others (none with 5% or more shares): 30%.1658

Six months later, on September 20, 2006, BAI provided this list to HSBC: 

Sonangol: 8.5% 

Investec Bank Ltd.: 7.5% 

Arcinella Assets, S.A.: 7% 

Sforza Properties S.A.: 6.5% 

Amercon International: 5% 

Dabas Management Ltd., a French corporation: 5% 

ABL Ltd.: 5% 

Mario Palhares, former BAI chairman: 5% 

Theodore Gilleti, BAI director: 5% 

Others (none with 5% or more shares): 33.75%.1659

BAI then furnished a longer and slightly different list to the June 2008 Bankers Almanac 

which made the list public: 

Sonangol: 8.5% 

Investec Bank Ltd.: 7.5% 

Arcinella Assets, S.A.: 7% 

Sforza Properties S.A.: 6.5% 

Amer-Con Corp.: 6% 

Dabas Management Ltd.: 5% 

ABL Ltd.: 5% 

Mario Palhares: 5% 

Theodore Gilleti: 5% 

Joa Batista de Matos: 5% 

Gebela Establishment: 3.15% 

Sociedade de Construcoes Soares da Costa S.A., Porto: 3% 

Mota Gestao e Participacoes SGPS, Porto: 3% 

 Mactrotrade - Marketing e Gestao Lda, Lisbon: 3% 

Lobina Anstalt: 3%.1660

Partial Disclosure of Bank Owners. Documents reviewed by the Subcommittee show 

that, from 2006 to 2008, HSBC pressed BAI for full disclosure of the beneficial owners behind 

two of the shell corporations that together owned 13.5% of the bank. In response, BAI offered 

differing explanations, then claimed the shell companies were unable to identify their individual 

shareholders, and ultimately assigned the shares “temporarily” to BAI’s chairman of the board. 

 

1658 2/15/05 review of BAI account by HSBC Financial Intelligence Group, appended to a 2006 review, HSBC-PSI 

036667-69. 

1659 BAI provided this list on September 20, 2006, on HSBC form, “Certification Regarding Correspondent 

Accounts for Foreign Banks,” HSBC-PSI 036651-55, at 55. It is unclear what happened to Mr. Recio’s 7.5% 

ownership interest reported six months earlier, in March 2006. 

1660 The same list also appears in the online Bankersalmanac.com entry for BAI, under “Ownership,” except that 

Investec Bank does not appear on that list. 
306 

In early 2006, HSBC’s Payment Services Regulatory Risk Unit initiated its annual update 

of BAI’s KYC profile. Under HSBC AML procedures in place at the time, this profile had to be 

reviewed and approved by the appropriate regional Money Laundering Control Officer in its 

Compliance Department.1661 

On March 16, 2006, HSBC received a list of BAI’s shareholders, as indicated above. 

The list included three private corporations, each of which would turn out to be a special purpose 

shell corporation: Arcinella Assets, Sforza Properties, and Dabas Management. The next day, 

on March 17, 2006, an HSBC regulatory risk officer sent the HSBC global relationship manager 

for BAI an email asking for additional ownership information: 

“In accordance with HSBC Bank USA’s ‘Know Your Customer’ Policy and Procedures, 

and to satisfy regulatory requirements, we perform periodical reviews of our client 

profiles. In reviewing the profile for Banco Africano de Investimento, Angola, we 

require the following updates: 

Ownership: Please provide us with background information on all owners with 

5% or more shares in the bank. 

New USA Patriot Act Certificate reflecting the change in ownership.”1662 

After two months without an answer, on May 18, 2006, the regulatory risk officer sent another 

email to the relationship manager with the subject line: “Second Request: Banco Africano des 

Investimento.”1663 

Seven months after the original request by the regulatory risk officer, on October 25, 

2006, the HSBC relationship manager sent an email discussing the ownership issue and 

providing a copy of the updated Patriot Act certification from BAI.1664 The certification, which 

was signed by BAI officials, included an updated shareholder list which added one new private 

corporation with a 5% ownership interest in the bank, ABL Ltd. The relationship manager 

provided the following information about each of BAI’s major shareholders, including the 

following four corporations: 

“Arcinella Assets, S.A. – 7% – Arcinella Assets is an investment services firm 

Sforza Properties (British Virgin Island) – 6.5% – This company is involved in the real 

estate industry

Dabas Management Ltd. – 5% – This company is an investment services firm 

Amercon International – 5% – This company deals in trading of bulk goods and 

construction 

ABL – 5% – This is a trading company”1665

 

1661 1/30/10 email from HSBC’s legal counsel to Subcommittee, item (3)(c). 1662 See 3/17/06 internal HSBC email, HSBC-PSI 036627 [emphasis in original]. The regulatory risk officer also 

asked for the banks most recent financial report, annual report, auditor’s report, and for any management changes. 

1663 Id., at 036627. 1664 See HSBC form, “Certification Regarding Correspondent Accounts for Foreign Banks,” HSBC-PSI 036651-55, 

signed by BAI one month earlier on September 20, 2006. See also 10/25/06 email from relationship manager, 

HSBC-PSI 036625-26. HSBC prepared this certification form to comply with the new due diligence requirements 

in the Patriot Act.

1665 10/25/06 internal HSBC email, HSBC-PSI 036626. 
307 

She did not identify any of the beneficial owners behind these companies. The relationship 

manager provided the information when she did, because BAI was then seeking to open a new 

account at HSBC to process settlements with Visa for its clients’ credit cards. In the October 25, 

2006 email, the relationship manager wrote: “Please find the outstanding information for Banco 

Africano de Investimentos. I hope we can push for approval of this KYC profile, as they are 

quite keen to have the Visa account opened urgently.”1666

Two days later, on October 27, 2006, a vice president at HSBC USA sent an email to the 

money laundering control officer charged with approving the BAI KYC profile noting that the 

new BAI account could not be opened “until the profile is Reapproved.” 1667 The money 

laundering control officer responded: 

“I understand that anew [sic] account is required for Banco Africano de Investimentos 

and that our normal procedure is to attach an approved KYC to the account opening 

request so that the operations area can issue an account number. 

Since the KYC for this bank is currently under revision, an approved KYC cannot be 

included with the account opening request. 

Please treat this e-mail as authorization from Compliance to establish a Visa Settlement 

Account for this bank.”1668

About 15 minutes later, the money laundering control officer sent a second email, 

limiting the waiver to a 30-day period.1669 The money laundering control officer wrote: 

“Upon further consideration, the waiver stands but on the condition that the profile be 

AM approved within 30 days otherwise the account may need to be frozen. I understand 

that we have been waiting [for] some crucial KYC information from this client for some 

while – they should understand that having accommodated them in this way they should 

be more responsive to our KYC inquiries.” 

The money laundering control officer told the Subcommittee that he limited the waiver to 30 

days to “light a fire” under HSBC personnel to obtain the missing information from the client.1670 

With the waiver in place, HSBC opened the Visa settlement account that same day, 

October 27, 2006.1671 When the waiver expired on or around November 27, 2006, HSBC was 

still waiting for the new ownership information from BAI.1672 The new Visa account was placed 

 

1666 Id., at 036625. 1667 10/27/06 internal HSBC email, HSBC-PSI 036691. 1668 10/27/06 internal HSBC email , HSBC-PSI 036690. 

1669 Id. 1670 Subcommittee interview of HSBC, September 22, 2008; 10/10/08 email from HSBC’s legal counsel to the 

Subcommittee, PSI-HSBC 44-0001, item (2). 

1671 HSBC-PSI 036689. 1672 HSBC-PSI 036604. 
308 

into a “CS denied status,” which meant that the KYC profile was not yet approved, although the 

account could still be used.1673 

On November 30, 2006, the HSBC regulatory risk officer sent an email to the BAI 

relationship manager that “the 30 day temporary waiver issued by Compliance has expired. 

Unless you can urgently confirm the status, this matter will be escalated to Compliance.”1674 

Twelve days later, on December 12, 2006, the relationship manager responded with additional, 

but still incomplete ownership information. Her email provided clear information about the 

beneficial owners of two of the private corporations, Dabas Management and ABL: 

“[T]hese two shareholders were ... created as special purpose vehicles. BAI has asked 

that we maintain confidentiality for the beneficial owners, and that this information be 

contained within our Compliance/KYC unit. BAI has disclosed that the beneficial owner 

of Dabas Management Ltd. is Jose Paiva and the beneficial owner of ABL is Manuel 

Vicente, both of whom are also members of the Board. The SPVs were created to allow 

these individuals, who are well-known in the Angolan market, some privacy in relation to 

this investment.”1675

As mentioned earlier, Mr. Paiva is chairman of the board of Sonangol, while Mr. Vicente is 

Sonangol’s chief executive officer. Each owns 5% of BAI through these special purpose 

corporations. 

With respect to Arcinella Assets and Sforza Properties, however, the relationship 

manager was unable to provide the same clarity. She wrote: 

“[T]he above shareholders were created as special purpose vehicles and there are various 

individuals with interests in these firms. I have confirmed that there is no single 

individual with shareholding of 5% or more. BAI advised that in the course of 2007 they 

will be disclosing the individuals holding shares in these SPVs.”1676

On December 21, 2006, a senior HSBC regulatory risk officer sent an email to the money 

laundering control officer seeking his advice on how to proceed: 

“The above subject’s KYC profile is currently in CS [Client Services] denied status .... 

The GRM [Global Relationship Manager] obtained the missing background information 

on the four shareholders. However, the SPV nature of these entities and the delay in the 

disclosure of the beneficial owners thereunder raises concern .... 

 

1673 1/30/10 email from HSBC’s legal counsel to the Subcommittee, item (3)(d). “CS” refers to the HSBC Client 

Services division.

1674 HSBC-PSI 036604. Although HSBC did not receive the requested information within 30 days, the AML officer 

told the Subcommittee that useful dialogue occurred between HSBC and BAI, but did not recall exactly what was 

said. Subcommittee interview of HSBC officials, September 22, 2008. 

1675 HSBC-PSI 036603. 1676 Id. 
309 

This is a sizable HSBC Group client (GRM noted ... that August YTD [yield to date] 

income was USD820k [$820,000] globally, and it’s projected that we will hit USD1mn 

[$1 million] by year end. 

Your guidance on how we should proceed will be greatly appreciated.”1677 

Three weeks later, in January 2007, BAI provided additional information about Arcinella 

Assets and Sforza Properties. But instead of providing the names of the “various individuals 

with interests in these firms” as BAI had promised in December, BAI indicated that the 

companies’ shares had been “temporarily” given to Mr. Paiva, to be held by him on a custodial 

basis “in his role as Chairman of BAI,” and to be awarded later apparently by the bank and 

Sonangol to “private individuals over time as they are able to generate wealth.” The individuals 

who would receive the shares were to be “of Angolan nationality,” with none to receive more 

than 1% of either special purpose company. This explanation of the two companies was 

completely different from the relationship manager’s initial description of Arcinella Assets as an 

investment services firm and Sforza Properties as involved with the real estate industry. 

BAI conveyed the new description of the two companies in an email sent to the HSBC 

relationship manager who then forwarded it to HSBC regulatory risk office personnel on January 

11, 2007. The BAI email stated in whole as follows: 

“Re: KYC 

HSBC Compliance Unit request for a listing of the shareholders or names of the 

beneficial owners of Arcinella Assets, S.A. and Sforza Properties (British Virgin Islands). 

Both Arcinella and Sforza are special purpose companies, the beneficial ownership of 

which is Mr. Jose Paiva, in his role as Chairman of BAI. The shares are being held 

temporarily – in effect on a custodial basis – by the Bank until final shareholder 

registrations can be concluded. The shareholders are (and will be) individuals of 

Angolan nationality with the intention that no one individual will have a shareholding of 

more than 1%. 

 

This is in line with the Bank’s strategy, and also the strategy of our main shareholder 

Sonangol, to encourage and to facilitate on an orderly basis share ownership by private 

individuals over time as they are able to generate wealth and then purchase shares. As 

you know there is not yet a public stock exchange operating in Angola. Nevertheless, 

BAI is endeavoring to achieve a broader distribution of our shares until such time this 

public vehicle does commence operation.”1678

BAI did not explain why it did not simply keep its shares at the bank until the selected Angolans 

earned enough money to buy them, and instead assigned the shares to the two offshore shell 

 

1677 12/21/06 internal HSBC email, HSBC-PSI 036689. HSBC told the Subcommittee that in the HSBC “computer 

system, ‘denied’ is a misnomer and indicates only that review has occurred but approval has not yet been issued, 

typically because of a pending information request.” See 5/6/08 letter from HSBC’s legal counsel to the 

Subcommittee, item (3)(n), PSI-HSBC-36-0001-12. 

1678 HSBC-PSI 036686. 
310 

corporations for further sale to Angolans as determined by BAI and Sonangol. HSBC did not 

raise any concerns about this offshore ownership arrangement. 

Upon receiving the email, the HSBC senior regulatory risk officer sent it on the same 

day, January 11, 2006, to the money laundering control officer in Compliance: “[F]urther to our 

discussion late last month, please find beneficial shareholder information on the two SPV’s.”1679 

The money laundering control officer responded that he was out of town, but would review it.1680 

Later the same day, the regulatory risk officer’s supervisor wrote: “[The money laundering 

control officer] has reviewed the contents and requested that we document the contents in the 

KYC profile accordingly. ... As we had discussed, please note Jose Paiva’s current majority 

ownership position (18.5%) listing his ownership stake in the 3 SPVs in the general comments 

section. Also note his current positions as non-executive chairman and MD [managing director] 

of Sonangol Ltd, the London based wholly owned subsidiary.”1681 

The final BAI Know-Your-Customer profile contained the following entry: 

“Noteworthy is BAI’s current Chairman Jose Paiva is the majority shareholder with 

18.5% beneficial ownership through Arcinella Assets SA (7%), Sforza Properties (6.5%) 

and Dabas Management Limited (5.0%). Jose Paiva was elected as the beneficial owner 

of Arcinella and Sforza, both Special Purpose Vehicle (SPV) companies purely as a result 

of his role as Chairman. The shares are being held temporarily, in effect on a custodial 

basis by the Bank until final shareholder registration can be concluded. The shareholders 

are (and will be) individuals of Angolan nationality with the intention that no one 

individual will have a shareholding more than 1%.”1682

Over the next few months, HSBC continued to press BAI for information on the identity 

of the beneficial owners of Arcinella Assets and Sforza Properties, since Mr. Paiva was acting as 

only a temporary placeholder for other individuals. On April 20, 2007, the HSBC relationship 

manager for the BAI account sent an email to the senior regulatory risk officer with an update on 

the two companies.1683 She wrote: 

“BAI has advised that the SPVs do have individual shareholders, however, the bank 

confirmed that this information would be disclosed this year. ... I have recently 

followed up with BAI on this issue, and they should be able to provide me with the 

information in the next few weeks. ... This is the most update[d] information I have 

available on the issue, and I will follow up with the customer to obtain further details on 

the SPV[s] and the individuals with ownership in these SPVs.”1684 

Five days later, on April 25, 2007, the relationship manager brought the issue to BAI’s 

attention in a telephone call with Theodore Giletti, a senior BAI official. The relationship 

 

1679 HSBC-PSI 036683. 1680 Id. 1681 Id. 1682 HSBC-PSI 036738. 1683 HSBC-PSI 036585. 1684 4/20/06 internal HSBC email, HSBC-PSI 036585. The senior risk regulatory officer forwarded the email to the 

AML officer, commenting, “please find Darko’s partial response to your comments.” HSBC-PSI 036589. 
311 

manager later described their conversation in a “call report.”1685 The relationship manager 

reported that Mr. Giletti, “was reminded that additional details on the SPV/shareholding were 

outstanding.” She said that he: 

“advised shareholders of the SPVs had not yet been published, there were still some 

details to be finalized. TG confirmed that the SPVs in question did not have any link 

with the President of Angola. AD [the relationship manager, Abijah Darko] requested an 

update on the situation at TG’s earliest convenience, as this was an important issue for 

the Compliance team. TG was also reminded that BAI’s AML policy had not been 

provided to HSBC. He advised that he would provide information on their AML policy 

within the next few weeks.”1686

On May 4, 2007, the senior regulatory risk officer asked the relationship manager if she 

had any additional information on the beneficial owners of Arcinella Assets and Sforza 

Properties.1687 Three weeks later, on May 25, 2007, the relationship manager responded that, 

“from my discussion with BAI, it does not seem that there is any ‘hidden’ Sonangol shareholding 

and that Mr. Paiva was elected as the beneficial owner purely in his position as Chairman. As 

you’ll notice in the report, it was also mentioned that the President [of Angola] does not have any 

links to these SPVs.”1688 

On May 29, 2007, despite not having received any additional information about the 

beneficial owners of Arcinella Assets or Sforza Properties which together held 13.5% of BAI’s 

shares, the money laundering control officer sent an email to HSBC’s senior regulatory risk 

officer stating: “Many thanks – I’m satisfied with the answers on ownership.”1689 

When asked why he was satisfied, HSBC wrote to the Subcommittee that the money 

laundering control officer: 

“learned that Mr. Paiva was temporarily holding Arcinella and Sforza in trust for the 

benefit of a wider group of Angolan shareholders. That information answered [the 

money laundering control officer’s] question concerning whether Sonangol’s ownership 

might be more concentrated. Also because the SPV owners were individuals with no 

more than one percent stakes in Arcinella and Sforza, which in turn owned 7 percent and 

6.5 percent of BAI, the risk associated with individual owners was so small as to alleviate 

the need for further investigation.” 

Given the context of a long, stable relationship with BAI and a sharing of information, 

[the money laundering control officer] concluded that it was not necessary to sever the 

discussion or the relationship. [The money laundering control officer] ultimately 

received the information he wanted.”1690

 

1685 HSBC-PSI 036577. 1686 Id. 1687 HSBC-PSI 036584. 1688 Id. 

1689 HSBC-PSI 036672. 

1690 10/10/08 email from HSBC’s legal counsel to the Subcommittee, PSI-HSBC-44-0005, item 2. 
312 

On June 8, 2007, the money laundering control officer approved the Know-YourCustomer profile for BAI.1691 More than a year later, HSBC’s legal counsel told the 

Subcommittee “upon information and belief that both SPVs continue to be held in trust by 

Paiva.”1692 HSBC also told the Subcommittee that it was aware of two additional private 

corporate entities listed in the Bankers Almanac as owning shares of BAI, Gebela Establishment 

which owned 3.15% of the shares of the bank; and Lobina Anstalt which owned 3%, but did not 

provide additional information about these entities to the Subcommittee.1693 While each of these 

two entities hold less than 5% of BAI’s shares, when considered in connection with Arcinella 

Assets and Sforza Properties, the entities with hidden owners together hold 19.5% of BAI’s 

shares. 

For more than one year, from March 2006 to June 2007, HSBC pressed BAI for 

ownership information that it routinely obtained from other foreign financial institutions and 

which the bank had determined was important due diligence information to understand its 

client’s operations. BAI provided some of the requested information, but offered differing 

explanations for two shell companies holding 13.5% of its shares, finally claiming the shell 

companies were unable to identify their individual shareholders and assigning their shares 

“temporarily” to BAI’s chairman of the board. HSBC failed to express any concern about BAI’s 

decision to place 13.5% of its shares into two offshore shell companies under the personal 

control of the bank’s chairman of the board, who is also a senior official at Sonangol, rather than 

retain those shares at the bank itself. To date, the hidden owners of Arcinella Assets, Sforza 

Properties, Gebela Establishment, and Lobina Anstalt together control more than 19.5% of BAI’s 

shares. HSBC nevertheless continued to provide full banking services to BAI. 

(4) BAI’s Missing AML Policies and Procedures 

A second issue of concern was BAI’s failure to comply with an HSBC request for a copy 

of its AML policies and procedures. As of 2010, HSBC still did not have a copy of these basic 

documents. 

In 1998, when the BAI account was first opened, Republic National Bank asked BAI 

about its AML procedures, but did not request a copy of any written procedures. Its 1998 KYC 

profile of BAI stated: 

“In terms of money laundering, Angola is considered as a ‘no priority’ country by the US 

State Department. Angola is an extremely difficult country to do business in, which 

combined with the country’s strict exchange control regulations, makes money 

laundering a practical impossibility. Even so BAI’s management is aware of 

international money laundering concerns and would be able to spot suspect transactions 

 

1691 HSBC-PSI 036671. The money laundering control officer noted in BAI’s approved KYC profile: “CO 

Reviewer and PSRR have extensive correspondence regarding the exact ownership structure of the bank and the 

investigation as to the degree of ownership exercised by Sonangol.” 

1692 10/10/08 email from HSBC’s legal counsel to the Subcommittee, PSI-HSBC-44-0001-06, item (7)(a). 

1693 See shareholder list in the online Bankersalmanac.com entry for BAI, under “Ownership.” 
313 

were they to come through. They require full identification of all their customers and are 

obliged to report suspicious transactions to the BNA (Central Bank).”1694 

The same was true in 2001, after HSBC had purchased Republic National Bank. The 

HSBC 2001 KYC profile of BAI stated: 

“[I]n our best judgment the bank adheres to the policies and practices established by the 

Central Bank which requires that banks 1) request identification and know the 

background of each and all of their clients, 2) ensure that funds going through their bank 

do not originate from illegal sources; verify source of funds 3) Monitor transactions for 

that purpose.”1695 

In 2003, an internal HSBC document explicitly noted that BAI did not have any written 

AML policies. It stated that BAI did “not have documented KYC policies.”1696 Nonetheless, 

HSBC approved BAI’s KYC profile in 2003.1697

In 2005, HSBC asked BAI to complete a questionnaire on its AML policies and 

procedures.1698 BAI returned a signed questionnaire in mid-June 2005, with handwritten 

responses.1699 When the form asked if the bank had “KYC and Anti-Money Laundering (AML) 

policies and procedures documented,” BAI checked the box indicating “yes.”1700 BAI also 

indicated that it required customer identification and verification at account opening, screened 

the source of funds for accounts, and had a system in place to monitor and report suspicious 

activity. 

In early 2007, two years after BAI said it had written AML policies and procedures, 

during the annual updating of BAI’s KYC profile, a senior regulatory risk officer sent an email 

to the BAI relationship manager noting that “one of the deficiencies” in the KYC profile was that 

HSBC had “no copies” of BAI’s AML policies and procedures. The email continued: “As BAI 

confirmed that they have their AML policies and procedures documented, please urgently 

provide a copy for our files.”1701 The relationship manager responded: “I have contacted BAI 

this morning regarding the AML policy, and I will revert as soon as this has been provided to 

me.”1702

A week later, on February 13, 2007, the regulatory risk officer informed the BAI 

relationship manager that “[u]nfortunately,” the BAI account had been selected for a routine, 

 

1694 1998 KYC profile of BAI, HSBC-PSI 036773. 

1695 HSBC-PSI 036779. 

1696 1998 KYC profile of BAI, HSBC-PSI 036750 (information provided by “CS” [HSBC Client Services Group] on 

6/17/03). 

1697 HSBC-PSI036736-036752. 

1698 HSBC AML questionnaire, HSBC-PSI 036663-65 (handwritten responses, signed by BAI officials in June 

2005). 

1699 Id. 1700 Id., at 036663. 1701 2/6/07 HSBC email from regulatory risk officer to BAI relationship manager, HSBC-PSI 036657. 1702 2/7/07 HSBC email from BAI relationship manager to regulatory risk officer, HSBC-PSI 036656-57. 
314 

internal HSBC audit.1703 He wrote: “As discussed, please pull whatever strings and obtain a 

copy of the AML policy and your English translation where relevant.”1704 He indicated that the 

information had to be provided to the auditors the next day. She responded: “Unfortunately, I 

have not yet received a copy of the AML policy for BAI, but I am sending an updated AML 

practices questionnaire, based on discussions with BAI. This will hopefully suffice until a copy 

of their AML policy is provided.”1705 A second version of the AML questionnaire, with more 

detailed, typed answers, but no signature from a BAI official, was apparently prepared by the 

relationship manager overnight and presumably given to the HSBC internal auditors.1706

Two months later, on April 25, 2007, the relationship manager reminded Theodore 

Giletti, a senior BAI official, that a copy of the bank’s AML policies and procedures still had not 

been provided to HSBC. She wrote: “He advised that he would provide information on their 

AML policy within the next few weeks.”1707

 

On January 31, 2010, HSBC told the Subcommittee that it still did not have a copy of 

BAI’s AML policies or procedures.1708 HSBC’s legal counsel told the Subcommittee that 

HSBC’s policy permitted longtime financial institutions “who are in good standing to either 

provide their AML policies and procedures or to provide a summary of such documents via the 

AML questionnaire,” as BAI did.1709 HSBC’s legal counsel stated that HSBC had: 

“found that having foreign financial institutions complete the AML questionnaires is 

often more useful than receiving AML policies in foreign languages or that may be part 

of the bank’s overall compliance policy manual. By having the foreign financial 

institutions respond to specific questions in the AML questionnaire, HBUS can drill 

down on the areas of most interest to it and most pertinent to protecting HBUS from 

being used by money launderers.”1710

The documents reviewed by the Subcommittee do not indicate, however, that HSBC used 

the questionnaire provided by BAI to “drill down” into any AML issues; to the contrary, it 

remains unclear to this day whether BAI, in fact, has written AML policies and procedures and, 

if so, what they provide. Moreover, HSBC’s response suggesting that it was content with the 

BAI questionnaire that had been largely prepared by its own staff does not explain why HSBC 

personnel repeatedly requested a copy of BAI’s written AML policies and procedures in 2007, 

why BAI failed to comply, and why HSBC allowed BAI to ignore such a basic due diligence 

request. 

 

1703 2/13/07 HSBC email from regulatory risk officer to BAI relationship manager, HSBC-PSI 036656. The 

regulatory risk officer referred to a “Banknotes Audit” which HSBC told the Subcommittee is a “routine audit of 

Banknotes’ AML Function.” 5/6/08 email from HSBC’s legal counsel to the Subcommittee, item 3(bb), PSI-HSBC36-0001-12. The BAI correspondent account was within the Banknotes group at HSBC. 

1704 2/13/07 HSBC email from regulatory risk officer to BAI relationship manager, HSBC-PSI 036656. 1705 2/14/07 HSBC email from BAI relationship manager to regulatory risk officer, HSBC-PSI 036656-57. 1706 HSBC AML questionnaire, HSBC-PSI 036660-62 (unsigned and undated). 1707 4/25/07 Call Report prepared by BAI relationship manager, HSBC-PSI 036577-78, at 036577. 1708 1/31/10 email from HSBC’s legal counsel to the Subcommittee, 5/6/08 email from HSBC’s legal counsel to the 

Subcommittee, item (3)(b), PSI-HSBC-36-0001-12. 

1709 10/10/08 email from HSBC’s legal counsel to the Subcommittee, PSI-HSBC 44-0001, item (3)(a). 1710 Id. HSBC also pointed out that existing U.S. AML laws do not explicitly require it to obtain a copy of a foreign 

financial institution’s AML policies and procedures. Id., at item (3)(d). 
315 

U.S. financial institutions that provide bank accounts to foreign financial institutions are 

not required under U.S. law to perform due diligence reviews of the foreign financial 

institution’s individual clients, so long as the U.S. financial institution takes reasonable steps to 

ensure that the foreign financial institution has reasonable AML policies and procedures in place. 

Here, HSBC was unable to review BAI’s AML policies and procedures, because BAI failed to 

provide a copy, even after a request was directed to one of BAI’s most senior officials. Angola 

has been designated by HSBC as a high risk country, it suffers from an ongoing corruption 

problem and weak AML controls, BAI’s ownership includes Sonangol and other Angolan PEPs, 

and it caters to a PEP clientele, yet HSBC has allowed BAI to continue to send hundreds of 

millions of dollars each month through HSBC into the U.S. financial system without providing 

written assurance of its AML policies and procedures. 

(5) BAI Credit Cards 

 A third issue involved BAI’s credit card program which enabled BAI clients to use U.S. 

dollar credit cards to transact business here and abroad. These credit cards were held by highend BAI clients, including Angolan PEPs. HSBC treated these credit cards as low risk, since 

they did not permit cash withdrawals and had a $10,000 limit per card. From 2001 to 2007, 

HSBC conducted no AML monitoring of the credit card account activity, but simply relied on 

BAI to perform its own AML oversight. In 2007, HSBC instituted a process to screen potential 

cardholders against lists compiled by the Treasury Department’s Office of Foreign Assets 

Control (OFAC) of persons who are prohibited from doing business in the United States, 

including terrorists and narcotics traffickers. This monitoring did not, however, include any 

AML monitoring of day-to-day account activity. 

Establishing the Credit Card Accounts. In 2000, HSBC established a corporate credit 

card account for BAI which provided U.S. dollar credit cards to BAI clients, characterized as 

“top level executives in the field of diamonds and oil in Angola.”1711 Internally, HSBC provided 

the following reasons for providing these credit cards to BAI customers: 

“Banks in Angola are not allowed to issue USD credit cards; therefore, our client Banco 

Africano de Investimentos (BAI) asked HSBC to issued [sic] corporate cards to the top 

37 wealthies[t] clients. The cards carry the log[o] of BAI. The card holders are top level 

executives in the field of diamonds and oil in Angola. These companies are all customers 

of BAI. These customers travel abroad often as well as in Angola for business. In 

addition their children are studying in Europe and in the USA[.] BAI guar[a]ntees 

payments on the credit cards by holding its customers funds as collateral.”1712 

In August 2000, HSBC opened two new BAI accounts, a BAI Credit Cards Operating 

Account which handled the credit card charges and repayments, and a BAI Cash Collateral 

 

1711 HSBC PSI 036787. 1712 Id. When asked about the statement that Angolan banks cannot issue U.S. dollar credit cards, HSBC responded 

that the statement appears to be incorrect and may be a reference to the “infrastructure and practical barriers to 

issuing credit cards, rather than a legal prohibition,” since credit cards have been available in Angola since 2001. 

10/10/08 email from HSBC’s legal counsel to the Subcommittee, PSI-HSBC 44-0001, items (1)(a)(1) and (2). 
316 

Account which kept cash collateral to secure repayment of 100% of the credit card debt.1713 

HSBC told the Subcommittee that the arrangement was: 

“similar to a standard corporate credit card that is provided to employees of a particular 

business for use in travel activity. The corporation is the accountholder, and is fully 

responsible for payment. The corporation is also responsible for evaluating credit risk 

and determining which individuals should receive cards.”1714 

HSBC created credit cards which carried the BAI logo and the name of a client, as supplied by 

BAI.1715 In 2000, BAI began issuing the credit cards to its clients who began activating the cards 

in the spring of 2001.1716 

On April 16, 2001, HSBC reported internally that “thus far, 36 credit cards have been 

issued (each with a maximum limit of $10,000) and 2-3 cards have been activated.”1717 Over the 

years, BAI added more cardholders. In January 2004, for example, HSBC records indicate that 

BAI sponsored 53 credit cards.1718 In 2006, HSBC records show BAI sponsored 118 

cardholders.1719 By 2008, the number was 238.1720

In 2006, according to HSBC, “BAI and several other Angolan banks negotiated with the 

Visa network to become credit card issuers in their own right to meet increasing demand in the 

domestic Angolan market.”1721 To accommodate this development, BAI requested and HSBC 

agreed to open a third credit card-related account “to clear payments to Visa in connect with that 

program.”1722 That account was referred to as the Visa settlement account. 

HSBC records indicate that the BAI credit cards were issued to multiple Angolan PEPs, 

including senior Angolan government officials. The Angolan government officials included, 

over time, the President of Angola Jose Eduardo dos Santos; Aguinaldo Jaime, Governor of the 

Angolan central bank; Joaquim David, Minister of Finance; Leonel da Silva, Minister of 

Finance; Joao de Matos, Minister of Defense; Kundi Paihama, Minister of Defense; Jose de 

Vasconcelos, Minister of Oil; Desiderio Da Costa, Minister of Oil; Manuel Antonio Africano, 

Minister of Geology and Mines; Andre Luis Brandao, Minister of Transport; Francisco Higino 

Carneiro, Minister of Public Works; Antonio Van Dunem, Minister in the Office of the 

Presidency; Fernando Miala, Chief of the Angolan Security Services; Sindika Dokolo, son-inlaw of President dos Santos; and several Sonangol executives including Mr. Paiva and 

 

1713 HSBC-PSI 036787. 1714 10/10/08 email from HSBC’s legal counsel to the Subcommittee, PSI-HSBC 44-0001, item (1)(b). 1715 See 5/26/06 internal HSBC email, HSBC-PSI 037908. 1716 See HSBC-PSI 037864. 1717 4/16/01 internal HSBC email, HSBC-PSI 036785. 1718 HSBC “Cash Collateral Accounts Balances As of 05 Jan 2004,” HSBC-PSI 036762. 

1719 6/20/06 internal HSBC email, HSBC-PSI 037903-04. 1720 1/30/10 email from HSBC’s legal counsel to the Subcommittee, item (3)(g). 1721 10/10/08 email from HSBC’s legal counsel to the Subcommittee, PSI-HSBC 44-0001, item (1)(h). 1722 Id. 
317 

Mr. Vincente.1723 HSBC told the Subcommittee that President dos Santos stopped using his 

credit card in 2003, and that by 2007, no longer had a BAI credit card account.1724

Due Diligence Issues. In February 2001, soon after the credit card account was 

established, BAI asked HSBC to increase the dollar limit for the credit card debt from $2 million 

to $6 million. Before doing so, HSBC inquired into whether “we have proper KYC and controls 

in place for this type of business.”1725 Identified issues included whether BAI was using KYC 

procedures, verifying the source of funds, asking about the expected use of the cards, and 

monitoring account activity. 

On February 23, 2001, an HSBC memorandum was prepared summarizing the credit card 

due diligence issues.1726 It noted that BAI officials had traveled to New York and discussed the 

credit card issues in detail for two days. The memorandum stated: “BAI emphasized that the 

cards are for a very select portion of their clientele (Ministers and Heads of companies ... 

including Sonangol, the Angolan Oil company). The major industries in Angola are oil and 

diamonds: also fishing and agriculture.” The memorandum noted that the credit cards would not 

allow cash withdrawals, each had a $10,000 limit per card,1727 the credit card bills would be paid 

in full each month so that no tax issues related to accrued interest charges would occur, and BAI 

would be required to obtain KYC information for each credit card client. HSBC determined that, 

based upon these discussions, it would increase the credit card debt limit to $6 million. 

 In October 2001, the Patriot Act was enacted by Congress and, for the first time, required 

credit card issuers to institute AML programs.1728 The law also required enhanced monitoring of 

private banking accounts opened for foreign officials and made handling the proceeds of foreign 

corruption a U.S. money laundering offense. The documents reviewed by the Subcommittee 

show no evidence, however, that in response to these new legal requirements, HSBC conducted 

any special review or instituted any new AML or PEP procedures related to the HSBC credit 

cards issued to BAI clients. 

Five years after the BAI credit card program began, in 2006, the HSBC money 

laundering control officer charged with approving BAI’s annual KYC profile began to ask 

questions about the due diligence procedures applied to BAI cardholders and account activity. 

On May 11, 2006, he sent an email to his colleagues in Compliance stating: 

“I have become aware that we have a credit card issuing program for [BAI]. ... The 

cardholders are ... high-end clients of BAI. They are executives of oil and diamond 

 

1723 For a list of BAI cardholders in 2001 including President dos Santos, see HSBC-PSI 036792-98. For an updated 

list of BAI cardholders as of 2006, see HSBC-PSI 037905-7. See also 5/18/07 internal HSBC email, HSBC-PSI 

036693-95. 

1724 Subcommittee interview of HSBC officials, October 24, 2007. 1725 February 22, 2001 internal HSBC email with handwritten notations, HSBC-PSI 036788. 1726 See HSBC-PSI 036789. 1727 According to HSBC records, this $10,000 maximum was established in regulations issued by the Angolan 

central bank. Id. By 2006, the limit had been increased to $20,000 for a number of accounts, see HSBC-PSI 

037905-7. 

1728 Section 352 of the 2001 Patriot Act, codified at 31 U.S.C. §5318(h), required a variety of financial institutions to 

establish AML programs including, under 31 U.S.C. §5312(a)(2)(L), any “operator of a credit card system.” 
318 

companies; executives of banks; and some government officials. ... Can you find out 

more about this product ... most specifically how (if?) it is being monitored for AML. If 

it is not being monitored then we will need to figure out what can be done.”1729 

The same day, an AML officer responded: “There is no AML monitoring taking place 

but we can get a report on a regular basis that would show us all the cardholders and their 

activity.”1730 She suggested obtaining those reports for a recent month, so that they could review 

them and “determine what we should monitor.” She also determined that the cards were already 

subject to routine monitoring to detect any fraudulent use. 

Later that month, the AML officer determined that BAI had issued 118 credit cards 

which were being used by both individuals and Angolan government agencies.1731 In July 2006, 

she reported that, when she checked the list of cardholders against a list of 34 Angolan 

government officials, 6 of the government officials held BAI credit cards.1732 When she 

forwarded this information to the money laundering control officer who had requested it, he 

responded: “This is good information – I note that 48 of the accounts have been inactive for 

more than 6 months. ... [W]e will need to come up with some parameters for what we look at 

and how frequently.” 

 Apparently the issue was not resolved and nearly a year later, in early April 2007, in 

connection with reviewing the latest KYC profile for BAI and evaluating whether BAI should be 

treated as a Special Category of Client (SCC), the term HSBC used to identify PEPs and other 

clients raising issues of concern, the money laundering control officer renewed his questions 

about the BAI credit card program. In an email sent to his colleagues, he wrote: 

“Lastly, I’ve not seen this profile before and the description of the users of the credit 

cards raises my interest. The profile indicates that the users are “executives of oil and 

diamond companies...and some government officials” – some of these individuals would 

be SCC’s if we banked them directly. I have asked for Worldchecks on all the card 

holders to find out more but by copy of this note I’m asking [an AML officer] to reach 

out to ... Fraud to determine precisely what monitoring is done on card usage.”1733

On April 26, 2007, the money laundering control officer was told that, about 80 BAI 

cardholders had been cleared, but 22 others had matches in the Worldcheck PEP database, 

indicating they were Politically Exposed Persons.1734 The money laundering control officer 

 

1729 5/11/06 internal HSBC email, HSBC PSI 037913. 1730 Id. Two weeks later, his colleague let the AML officer know she had met with the credit card program manager 

and was setting up “a meeting on Wednesday to discuss a monitoring approach.” 5/26/06 internal HSBC email, 

HSBC-PSI 037908. 

1731 5/26/06 internal HSBC email, HSBC-PSI 037908. 1732 6/20/06 internal HSBC email, HSBC-PSI 037903-04. 1733 4/5/07 email from AML officer to HSBC colleagues, HSBC-PSI 036602. The day before, the AML officer had 

requested that a Worldcheck be run on a number of credit card account holders, noting “this is not an urgent request 

– next week will be fine.” 4/4/07 internal HSBC email, HSBC-PSI 036697. 

1734 4/26/07 internal HSBC email, HSBC-PSI 036696-97. 
319 

requested more information on those 22 PEPs, and learned that they were Angolan Cabinet 

officials and, in one case, a relative of the President of Angola.1735 

A month later, on May 21, 2007, the money laundering control officer wrote that the 

KYC profile for BAI “is in my inbox awaiting approval,” but “[b]efore approving I wanted to 

understand better the credit card program that is in place for this bank and to get some comfort as 

to who is holding the HBUS credit cards. I therefore obtained a list of the card holders and ran 

them through Worldcheck to determine if any of the names were notable. Most of the names 

were unremarkable but a handful listed below are politically exposed people.”1736 The next day, 

May 22, 2007, he requested and the HSBC Commercial Cards division initiated “more controls 

under the ‘Credit Card Program’ for BAI” by requiring all potential cardholders to be “scanned 

by the OFAC team in Buffalo against OFAC and other internal ‘Watch Lists’ prior to receiving 

an HSBC credit card.”1737 HSBC told the Subcommittee that this team also began reviewing 

select account statements every six months for “questionable activity, with particular attention to 

PEPs.”1738 

On May 29, 2007, the money laundering control officer sent an email to his colleagues 

stating: “It is my belief that we do not understand the degree of risk that we have here – largely 

because we did not seem to know that the holders are PEPs.”1739 A week later he approved the 

updated KYC profile for BAI in part on the condition that: “The credit card business being 

offered by PCM [the HSBC Payments and Cash Management Group] needs to have additional 

controls put in place as regards onboarding and regular OFAC scanning. Customer profile needs 

to address the risks of the credit card activity. Additional transaction monitoring for this activity 

has been implemented.”1740 

Despite the money laundering control officer’s awareness and concerns about Angolan 

PEP clients using HSBC credit cards, he did not require BAI to explain its AML efforts or 

provide a copy of its AML policies and procedures, which would have disclosed how those 

procedures applied, if at all, to BAI’s credit card clients. 

(6) No SCC Designation Despite PEP Involvement 

A final issue in the documents reviewed by the Subcommittee involved HSBC’s 

deliberations on whether it should designate BAI as a Special Category of Client (SCC), the term 

used by HSBC to identify PEPs and other clients raising special due diligence concerns. If BAI 

had been designated an SCC client, HSBC would have subjected its accounts to enhanced AML 

monitoring.1741 In 2006, HSBC’s Financial Intelligence Group considered designating BAI as an 

SCC client, but decided not to go forward. That decision was made despite BAI’s close 

 

1735 4/27/07 internal HSBC email, HSBC-PSI 036693-96. 1736 HSBC-PSI 036693 1737 Entry in 2007 KYC profile for BAI, HSBC-PSI 036741. 1738 2/2/10 letter from HSBC’s legal counsel to the Subcommittee, at 9-10. 

1739 5/29/07 internal HSBC email, HSBC-PSI 036672. 1740 6/8/07 internal HSBC email, HSBC-PSI 036671; entry in 2007 KYC profile for BAI, HSBC-PSI 036752. See 

also 10/10/08 email from HSBC’s legal counsel to the Subcommittee, PSI-HSBC-44-0003. 1741 1/30/10 email from HSBC’s legal counsel to the Subcommittee, item (3)(i). 
320 

association with Sonangol, its PEP clientele, and its failure to provide its AML policies and 

procedures, and despite Angola’s ongoing corruption problem and weak AML efforts. More 

than two years later, in November 2008, HSBC reversed course and designated BAI as an SCC 

client. 

Since its inception, BAI has been closely aligned with Sonangol, which has been its 

major shareholder and whose executives have often held senior BAI positions. For example, one 

of the bank’s initial senior administrators was Joaquim David, former head of Sonangol. As of 

2007, BAI’s chairman of the board was Mr. Paiva, who is Sonangol’s chairman of the board, and 

who owned 5% of BAI’s shares through an offshore shell corporation, Dabas Management Ltd., 

and controlled another 13.5% through two other offshore shell corporations, Arcinella Assets and 

Sforza Properties as explained earlier. Another BAI director was Mr. Vicente, who is 

Sonangol’s CEO, and who owned 5% of BAI’s shares through ABL Ltd., another offshore shell 

corporation.1742 BAI’s current CEO, Jose de Lima Massano, is also a former Sonangol 

executive. Sonangol itself currently holds an 8.5% ownership stake in BAI. 

Because Sonangol is a government-owned entity and a powerful force in Angolan politics 

and economy, its executives qualify as PEPs, which means BAI’s own leadership includes PEPs 

as well as its owners and clients. In addition, BAI explicitly caters to the Angolan elite and has a 

clientele replete with other Angolan PEPs, including senior government officials and executives 

from the state-owned diamond company, Endiama, as well as their relatives and close 

associates.1743 

Still another factor is Angola’s ongoing corruption problem, a problem so severe that it 

led Citibank to close all accounts associated with the Angolan government and Sonangol in 

2003.1744 Those risks were repeatedly noted by HSBC compliance personnel involved with 

preparing BAI’s KYC profile. On March 16, 2006, for example, an HSBC regulatory risk 

officer asked HSBC’s Financial Intelligence Group to conduct an enhanced due diligence review 

of BAI.1745 

Two months later, on May 10, 2006, a three-page internal HSBC report on BAI was 

provided, along with a copy of a two-page 2005 report on BAI.1746 One focus of the 2006 report 

was poor AML controls in Angola. The 2006 report noted that Angola had been designated a 

“high-risk country” by HSBC, and that “laundering of funds derived from continuous and 

widespread high-level corruption is a concern, as is the use of diamonds as a vehicle for money 

laundering.” The report also stated: 

“Angola currently has no comprehensive laws, regulations, or other procedures to detect 

money laundering and financial crimes, although some related crimes are addressed 

through other provisions of the criminal code. ... The local banking system imports 

 

1742 HSBC-PSI 036667. Mr. Vicente has also served as vice president of the Eduardo dos Santos Foundation, in 

honor of the Angolan president. Id.

1743 A partial list of Angolan PEP clients with HSBC credit cards is provided above. 1744 See discussion of BNA, above. 1745 3/16/06 email from Payment Services Regulatory Risk Unit to Financial Intelligence Group, HSBC-PSI 036669. 1746 5/10/06 internal HSBC email forwarding enhanced due diligence report on BAI, prepared by HSBC Financial 

Intelligence Group, HSBC-PSI 036666-70. 
321 

approximately $200-300 million in net cash per month, largely in dollars, without a 

corresponding cash outflow. Reportedly, local bank representatives have noted that 

clients have walked into banks with up to $2 million in a briefcase to make a deposit. 

These massive cash flows occur in a banking system ill equipped to detect and report 

suspicious activity.”1747 

The report noted that BAI’s major shareholder, Sonangol, was classified as a PEP on the 

PEP database used by HSBC, as was Mr. Vincente, a BAI director. The attached 2005 report 

stated that BAI “appears to be running under the close direction of ... Sonangol.”1748 The 2006 

report concluded that “since one of its major shareholders, Sonangol (owned by the Government 

of Angola) and one of its directors, Manuel Vicente, were listed on World-Check as Politically 

Exposed Persons,” BAI itself should be “considered for classification” as an SCC client.1749 The 

report also noted that it had “found no evidence of money laundering, terrorist financing or other 

substantive criminal activity regarding BAI, its ownership or top executives.” 

The 2006 report was forwarded to a more senior AML officer who determined that SCC 

status “was not warranted.” He reasoned as follows: 

“As Sonangol’s stake is not very large (and 1 of 8 owners with 5% or more) and the fact 

that the director noted is not apparently involved in the day-to-day operations, I would 

not make this acct an SCC. If the GRM/RM [global relationship manager] notes 

anything different which may warrant a review of the SCC status, please let me 

know.”1750 

In April 2007, the money laundering control officer charged with approving BAI’s KYC 

profile examined the issue. On April 5, 2007, he sent a memorandum to HSBC’s senior 

regulatory risk officer and others in the New York office expressing his concerns: 

“I’ve been reviewing the profile for BAI and am trying to understand how much 

influence Sonangol might exercise over the bank. ... On the face of it their ownership is 

8.5% and the determination by [another less senior AML officer] that the bank not be an 

SCC due to the low level of ownership looks valid. A deeper review presents a rather 

different picture as Jose Paiva is also a director of Sonangol so the three entities (Sforza, 

Dabas and Arcinella) of which he is beneficial owner could represent additional Sonangol 

control; the beneficial owner of ABL is also president of Sonangol – put it all together 

and we have potential Sonangol control of 32% which, when combined with the 

likelihood of voting the treasury stock means that the bank appears to be a closer 

subsidiary of Sonangol than the profile indicates. 

 

1747 Id., at 036670. 1748 Id., at 036668. 

1749 Id., at 036667. 1750 2007 KYC profile for BAI, HSBC-PSI 036738. See also undated, unattributed one-page HSBC document 

discussing SCC issue, HSBC-PSI 036688. The HSBC compliance officer reported that he could have overridden 

this decision if he had wanted to. Subcommittee interview of HSBC officials, September 22, 2008. 
322 

I found nothing at all on Gilleti. Palhares previous role is well documented – I was 

unable to determine if he has any links to Sonangol but think it probable as he was the 

bank’s former president and must have dealt with the major shareholders. 

33.75% of the shares are widely held but it would take very little to bring effective 

Sonangol control to over 51%. Indeed the Wikipedia entry on Sonangol describes BAI as 

a subsidiary of Sonangol while Sonangol’s website indicates that they own 17.5% of 

BAI. 

So what. 

Ordinarily partial ownership by a state owned oil company would be a point of interest 

and little more but the fact that this information is so deeply buried and you had to really 

fight to obtain details of ownership of Sforza, Dabas and Arcinella suggests a desire to 

veil the bank’s ownership for reasons that I do not understand (unless it is also to 

‘protect’ Paiva from undesirable attention – but since he is chairman he is likely to attract 

attention anyway.) Please ask the GRM (Abi) to comment and give us a deeper 

understanding of this but I’d appreciate it if you have any insights.”1751

Ultimately, the money laundering control officer opted not to categorize BAI as an SCC 

client.1752 When asked why, HSBC’s legal counsel told the Subcommittee that “Sonangol’s level 

of ownership did not raise any concerns per se,”1753 and that Mr. Paiva’s control of two of the 

corporations holding 10% of BAI’s shares was only temporary and “for the benefit of a wider 

group of Angolan shareholders.”1754 HSBC did not include in its analysis any consideration of 

the facts that Mr. Paiva’s “temporary” control of the offshore corporations was already two years 

old, BAI had failed to provide its AML policies and procedures when asked, BAI was operating 

in a country known for weak AML controls, and it catered to a PEP clientele from the oil and 

diamond industries, both known for widespread corruption. 

The Subcommittee reviewed a number of BAI’s monthly bank statements to get a sense 

of the volume of wire transfers being sent by BAI clients each month through the bank’s 

correspondent account at HSBC in New York and the extent to which these wire transfers 

involved PEP clients. The monthly statements itemized each wire transfer that went through the 

account, providing the date and funds involved, but did not identify the originator or recipient of 

the wire transfers, making them of limited use in evaluating the AML risks involved.1755 For 

example, the information in the monthly statements did not show whether individual Angolan 

government officials were sending wire transfers into the United States in amounts 

disproportionate to the officials’ government salaries. 

Given BAI’s history as a private bank that was established in large part to assist 

Sonangol, a government-owned oil company, the heavy involvement of PEPs in its management 

 

1751 4/5/07 email from AML officer to HSBC colleagues, HSBC-PSI 036602 (emphasis in original). 1752 HSBC-PSI 036602. 1753 10/10/08 email from HSBC’s legal counsel to the Subcommittee, item (4), PSI-HSBC 44-0007. 1754 Id. 1755 See, e.g., December 2006 BAI account statement, HSBC-PSI 036306-35. 
323 

and clientele, and Angola’s ongoing corruption problems in government and the oil and diamond 

industries, it is difficult to understand HSBC’s decision in 2006, not to designate the bank as a 

Special Category of Client meriting enhanced oversight. The unresolved nature of the bank’s 

ownership due to the four offshore shell entities, Arcinella Assets, Sforza Properties, Gebala 

Establishment, and Lobina Anstalt that together held over 19.5% of the bank’s shares, as well as 

the bank’s secretive approach to its ownership, provide more reason for enhanced monitoring. In 

addition, BAI’s failure, despite repeated requests, to provide its AML policies and procedures 

makes it virtually impossible for HSBC to reasonably rely on BAI to conduct its own AML due 

diligence and monitoring. Still another concern is that, when HSBC provides BAI with ready 

access to the U.S. financial system despite the bank’s poor AML controls, HSBC is providing 

that same ready access to a host of PEP clients. BAI is exactly the type of foreign financial 

institution that the Patriot Act intended to subject to enhanced monitoring, not only to prevent 

terrorists and criminals from misusing the U.S. financial system, but also corrupt foreign 

officials. 

In 2008, HSBC reversed course and designated BAI as an SCC client. It has not 

provided the Subcommittee with contemporaneous documents explaining its decision or what 

new controls were put into place as a result. 

E. Conclusion 

 Angola continues to have weak AML controls, a cash-intensive banking system, and an 

ongoing corruption problem. This case history shows how an Angolan PEP like Pierre Falcone, 

an Angolan government official like Aguinaldo Jaime, and an Angolan financial institution like 

Banco Africano de Investimentos, have used U.S. banks to gain access to the U.S. financial 

system, often bypassing AML and PEP safeguards. Each of these examples demonstrates the 

need for U.S. financial institutions to strengthen their AML and PEP oversight.