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Investigation: How estate excos “embezzle” N100m development funds, “frustrate prosecution”

By Bankole Shakirudeen ADESHINA 


THE pioneer executive members of the Island Heritage Estate Association, an exclusive middle-class community, located in Ojodu Abiodun Area of Ifo Local Government Area of Ogun State, have been accused of embezzling the association’s development funds in the sum of N60 million.

The ICIR obtained documents, recorded telephone conversations, text messages, e-mail messages, bank transfers, and secretly recorded videos and audios, showing that N60 million cannot be accounted for by the former excos.

Not only that, about two dozen landlords, stakeholders and experts interviewed for this investigation confirmed the allegation and put the blame at the doorstep of three former executive officers of the estate association.

The missing funds are the total sum of the statutory levies comprising security charges, electricity bills, and annual development contributions, paid by homeowners into the estate’s account between 2010 and 2018.

The out-of-court settlement levies which all property owners in the estate were compelled to pay to settle land vendors known as omo onile contributed to the huge sum in the estate’s account.

In 2016, the residents rudely woke up to the invasion of  Omo-Onile from the Habeeb Kasumu Family, who claimed they were the rightful owners of the estate’s lands.

Threatening fires and brimstones, the invaders vowed to commence eviction, and demolition of all properties on their land, while pursuing litigation before the court of law for compensation over the landlords’ trespass.

The matter was settled out of court, with a buy-back arrangement to assuage the acclaimed new landowners.

According to the settlement arrangement, those who have completed their houses and had long moved in were asked to pay N300,000 each; N500,000 for those whose houses were still being developed; and N700,000 each for those who were yet to take full possession of their land.

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Out of the total of 120 houses in the estate, 63 landlords were said to have complied with the full payment.  It was not clear which category of people paid what amount exactly.

Some of the property owners expressed suspicion that the claim by the omo-onile may have been part of ploys, carefully orchestrated by the embattled former excos to siphon the association’s funds.

The association members alleged that the reluctance of the former officials to rather push vigorously for litigation than seeking an out-of-court settlement with the acclaimed landowners shows connivance by the excos.

The decision to settle out of court with new landowners was allegedly taken unilaterally by the former excos, despite the fact that “most of us had valid Deed of Assignment/Agreement from the previous sellers,” they argued.

The landlords told The ICIR that the funds ‘”embezzled” by the excos were intended for a number of development projects, including paving of the estate’s road networks, introducing of a technology-driven security system for the residents of the estate, providing borehole water for the neighboring communities, and facilitating of the construction of a well-equipped Primary Healthcare Center within the proximity of the community among others.

The estate, started in 2010, though well-landscaped, is plagued by deplorable access and internal roads.

The situation is worsened during the rainy season. Often time heavy flooding practically cuts off the community from the Lagos-end of the Berger-Ojodu area, due to a poor drainage system that could not dislodge the heavy flow of drainage waters from adjoining communities.

There is also a prevalent shortage of clean water in the surrounding communities, an emergency the new executive members also planned to fix had the association money not been embezzled.

 

Alleged fraud

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At the center of the scandal is an 11-man former executives, including Pastor Olajide Adewale Samuel, Chairman; Mr. Francis Chimezie, Vice Chairman; Mr. Owoeye Olufemi, Secretary; Mr. Eke Francis, Assistant Secretary; Mr. Taiwo Akinmolayan, Financial Secretary; Mr. Dada Bbabatunde, Treasurer (1); and Mr. Alimi Babatunde, Treasurer (2).

Others were Mr. Akomen Omijeh, PRO (1); Mr. Arubuola Rotimi, PRO (2); Mr. Oni Ayodeji, Assistant PRO; and Mr. Loto Oladapo, ex-Officio.

Among them, three ex-officials were signatories to the association’s accounts. They are former Chairman, an area pastor for the Redeemed Christian Church of God; former Secretary, a barrister and member of the Nigerian Bar Association; and the ex-financial secretary, a certified accountant and member of the Institute of Chartered Accountants of Nigeria, ICAN.

These three individuals have been accused of masterminding the fraud.

Fraud discovered

To fulfill the out-of-court settlement with the Kasumu Family, 63 landlords said they contributed a total of N42.3m, out of which N40.6m was reportedly paid to the beneficiary.

But after the auditing of the estate’s account, conducted by Messr Aderopo Oladejo & Co, a shortfall of N11.4m was discovered in the process, contrary to the claim of the three executives.

Documents obtained by The ICIR showed that the missing balance included the sum of N900,000 claimed as Ratification Levy paid by the suspected exco, which was discovered later to be untrue.

Also, the former excos could not account for “Utilization Fund” amounting to N18.3million.

The complainants said the money was meant for road construction and interlocking pavement.

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In spite of the gross misappropriation, a loan of N3million was said to have been allocated to the former Financial Secretary, Akinmolayan, between 2015 and February 2016 without the knowledge of the association members.

He only paid back when the members announced the plan to probe the excos.

On the 26th of October 2016, N1million was withdrawn by Pastor Olajide and Mr. Akinmolayan, for “unapproved and unknown purposes”, according to documents.

Another “unauthorized loan of” N2million  was given to Mr. Owoeye, the former Secretary, who was also a signatory to the account.

This transaction was also unknown to the other executives and members, except for Adewale and Owoeye, the other two signatories, according to findings.

After some pressure, however, Mr. Owoeye was said to have made a full refund of the said money on the 28th of December, 2018.

The document also showed that the sum of N5million was remitted to the accounts of two corporate organisations namely, Living Links Ventures and KLX Kings Ventures, by Mr. Olajide and Mr. Akinmolayan. The decision was taken without the members’ approval.

The two companies were allegedly owned by the disbursers.

On the 3rd of May, 2016, the sum of N800,000 was withdrawn by the former Chairman, Pastor Olajide, for a purpose disputed by other members who now request for an immediate refund.

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He has not refunded the money at the time of filing this report.

Another N700,000 withdrawn on the 9th of November 2017, was allegedly an unapproved loan for one of the landlords, Mr. Tunde Sosina.

But when speaking with TheICIR, Sosina denied the knowledge of collecting any loan whatsoever from the embattled executives.

“I never collected any loan from either the former or the current executive,” he said.

He added that if his name is linked to the scandal, he would be compelled to take “legal action” against the former executive members.

There are also ghost beneficiaries such as Evelyn Ubani and Abiodun Adefidipe who received payments from the association without rendering any services to it whatsoever.

Allegedly also, bank alerts were sent to the association’s e-mail address which was quickly deleted.

But the “cleanup exercise” was not perfectly done, as one of the members of the caretaker committee, who logged into the mail at about the same time the mail was about to be removed, combing for possible clues against the fraud, discovered the mysterious deletion of some messages.

“Right before my eyes, I just saw bank alerts messages being deleted and the delete folder being emptied without ordering any command whatsoever.

Mr Aremu, a complainant

“It was then I realized that this fraud was becoming much bigger than we ever thought,” Mr. Aremu told this reporter.

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He said his finding was however reinforced with more information salvaged through the email’s sent box, where he uncovered communication lines by the accused excos over the fraudulent withdrawals.

Trust betrayed

When the Estate Association was inaugurated back in 2010, the three excos were among the volunteers endorsed by the entire members to occupy the executive positions because of their religious and professional status.

The assumption that they were of impeccable character and competence earned them unquestionable followership and total compliance to every single directive they issued, including instruction on financial obligations.

But early in the year 2013, rumor had it that the three may have been using the association’s money for personal gains, as they were seen to be embarking on massive construction projects on their uncompleted buildings at the time.

Most of the members of the association dismissed the rumour,  relying instead on the fact that the accused were updating the association regularly on all financial transactions, showing a printout of the association’s statement of the account anytime it is requested.

It later turned out that “all the documents being presented were doctored and not the true version of the real situation on the ground.”

The bubble finally busted in 2019 when new executives resumed office. The former officials “refused” to give the full account of their stewardship, particularly the detail of the association’s bank transactions since they assumed office.

Infuriated by the development, the new excos constituted a caretaker committee to investigate the matter and recommended action.

One of the committee’s resolutions was the engagement of a professional accounting firm to audit the accounts of the organization since its inception.

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At the end of the one-month-long exercise, the report of the external auditor, covering between 26th of November 2012 and 31st of December, 2018, was released and did raise questions about the fund management by the three former excos.

The auditing firm based its conclusions on multiple irregularities and distortions discovered in the book.

Some of its verdicts are as follows:

“The association should ensure that the records are reconciled and aligned.  The difference of N7,600,000 (N44,100,000) minus (N36,500,000) should be properly investigated to establish the mix-up.

“The total sum of N7,900,000 was paid to individuals and unknown companies as follows:- Mr. Taiwo Akinmolayan – N4,800,000;  Mr. Bayode Dada—N300,000; Mr. Adewale Oladimeji – N800,000; Klx King Venture – N500,000; and Living Links Ventures – N1.500,000.

“Our review of the second ratification payment document of the N38,900,000 received shows that N2,500,000 out of the payment was not made through the bank account. This represents a payment of 3rd May 2015 (N800,000), 26th October 2016 (N1,000,000), and 11th May 2017 (N700,000.

“The record given to us revealed that a total sum of N4,500,000 was given out as loan by the executives from 2015 to 2018. The loan was without General Assembly approval hence illegal. This act represents a misuse of office and fraudulent were the beneficiaries of the loan were the cash custodian.  The association should investigate the loan repayment and decide on it thereafter.

Part of the report, reads, “Island Heritage Estate Association (IHEAS) has been in existence long before 26 November 2012 but financial and accounting records before 26 November  2012 were not presented to us for review and inclusion to the financial statements.

“Implications: The executives might have failed in their fiduciary duty; Report of accounting stewardship was not given; there was no verification of accounting transactions,” corroborating the suspicion that the missing funds might be much more than what is being quoted above.

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Continuing, the reporting reveals further that “the position of treasurer was vacant between 2015 to January 2018, according to the record presented to us.  This forms major lapses and weakness as there are no checks and balances where the work of the treasurer and financial secretary is combined by the Financial Secretary. It was this period that money was given to the executive in form of the (unapproved) loan without General Assembly approval,” the report revealed the depth of the scandal.

There was another part, which categorically states that “there is a very weak control on the management of cash.  Cash collected could be misappropriated by a dubious officer.

Speaking with The ICIR, the auditor, Mr. Ropo Oladapo, confirmed that his company did carry out a statutory audit exercise on the association’s bank account, and all findings were based on the records made available.

When asked whether his recommendations were objective and solely focused on advancing the cause of justice, his reply was a razor blade sharp “yes of course,” adding that “and I can stand by it anywhere.”

Long walk to justice

To enforce the recommendations of the auditor, letters were written to all the members of the former executives, demanding of them the refund of the missing funds, and explanations why legal action should not be taken against them.

The indicted officials denied the allegations and threatened to sue for libel.

Unsatisfied by this response, the landlords decided to push much harder, writing a petition to the Police Headquarters, Zone II in February 2020, seeking the law enforcement institution to investigate the alleged fraud and execute prosecution.

Tagged “Allegation of Conspiracy, Forgery, Stealing and Fraudulent Diversion and attempt to pervert the cause of justice by the trios of Adewale, Owoeye, and Akinmolayan,” the group asked the Inspector General of Police Monitoring Team, Zone II Command, led by Justin Adaka, to investigate the matter, prosecute the suspects, and help the estate association retrieve its stolen funds from them.

Barrister Mayowa Owolabi, the association’s lawyer, said the police initially handled the case with great professionalism.

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“We were specifically impressed in the sense that the investigation was carried out in a civil manner. Nobody was arrested whatsoever. The accused were invited alongside our team. We all went there. We were asked to bring supporting documents for and against our claims, which we did, sufficiently. And we were given ample time for this,” he recalled.

After a long rigorous process, the investigation was eventually concluded, and the three were indicted.

The indictment report was however not released to the party. It was read by the police Assistant Inspector General of Police in charge of Zone II Command and kept in confidential files.

“Consequently, the police recommended them for prosecution,” Owolabi, who is also the Secretary, Nigerian Bar Association, Lagos Chapter, recalled.

The legal counsel said during the “indictment”, “the former chairman, Adewale pleaded for mercy” saying the former financial secretary made him sign blank cheques that he never knew were being issued for fraudulent purposes.

“For me, it is inequitable for trusted leaders to do such a disappointing thing against its people,” the lawyer said, vowing to have the stolen money refunded.

“I am highly disappointed in the accused trios. More especially, in Barrister Olufemi Owoeye, who is a colleague of mine in the legal profession.

“As a matter of fact, I dialogued with him at one point, telling him that as a lawyer, I knew the gravity of the implication of the scandal he has put himself into. I told him I was under pressure to write a petition against him and the two others. That he should do the needful so that I do not have any need to write the petition, because I knew how catastrophic the ending would be for them,” he explained.

If eventually prosecuted, Owoeye, alongside two others, besides facing imprisonment, could get barred from practicing law again in the country, as the NBA Law and indeed Nigeria constitution stipulate stiffer sanctions for such an offence.

Ditto for Taiwo Akinmolayan, a professional accountant and member of ICAN, who was expected to lead with a high sense of ethical standards.

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Mr Taiwo Akinmolayan, embattled former Fin-Sec

ICAN, a reputable professional institution known for zero-tolerance against corrupt practices by its members, has in the past dismembered those found culpable in a fraudulent criminal act.

Examples are the former Managing Director of the defunct Oceanic Bank Plc, Dr. Cecelia Ibru, and her counterpart in Intercontinental Bank Plc, Dr. Erastus Akingbola. Regardless of their status, they lost their membership of the prestigious professional body early in 2000 when they got themselves enmeshed in a fraudulent scandal that leads to the collapse of their banks.

For the former chairman, a pastor of the Redeem Christian Church of God, the fate that awaits him is clear.

The Christian religion is one that doesn’t condone the abuse of trust, conspiracy, or stealing of other people’s hard-earned money, as evident in the 10 commandments.

Also, proverbs 12:22 says, “Lying lips are an abomination to the Lord but those who act faithfully are his delight.”

Corinthians 6:10 stated that “Nor thieves, nor greedy, nor drunkards, nor revilers, nor swindlers will inherit the kingdom of God.”

Verifying the documents

  According to the landlords, the three suspects have been indicted by the probe panel at the Police Headquarters, Zone 11 Command before the COVID-19 lockdown in February 2020.

It however expressed disappointment that instead of moving to prosecute them, the police allowed them to go home and even granted their request that the case is transferred to another station for further investigation.

The ICIR could not obtain a copy of the document indicting the suspects as an effort to do so remain futile.

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When this reporter contacted the IPO in charge of the petition in Zone II Command, Inspector Afolabi Tajudeen, he said, “we have since done with the case and transferred the file to Kam Salaam, Obalende, for further action, according to the instruction we received.”

He did not confirm if the suspects were indicted by the police.

The investigation by The ICIR revealed that that new IPO at Kam Salaam, the is Inspector Utzu Sunday, a Cross Rivers-born officer of the police, whom the complaint believed has been compromised by the accused.

“Without fear of contradictions, we have our reservations about the integrity of the IPO, Inspector Sunday Utzu,” the Estate association lawyer told The ICIR.

“The Inspector Sunday has been heavily compromised. And their plan is to use him to frustrate the investigation and allow the matter to die at that stage, but we are determined,” added the Secretary-General for the new EXCO.

After three unsuccessful visits to Sunday’s office, this reporter finally got him to address the issues raised on the phone.

When asked about the update on the investigation and when it would be concluded, Inspector Sunday replied that the investigation is still ongoing.

Asked when the investigation is likely to be completed, he countered with another question, “On whose part are you, let me know.”

“I am on the side of justice. I am for both parties. My interest is in knowing whether or not the accused are being accused wrongly or rightly,” the reporter replied

But Inspector Sunday thereafter refused to comment further.

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So far,  three litigations have been instituted by the accused in the Ogun State High Courts, one of which was instituted (with Suit number HCF/152/2019) by the duos of the former chairman and the former financial secretary, praying the court to restrain the new executives from arresting them or holding them liable for the mismanagement.

Two other cases, filed by the former Secretary (with suits number HCF/97/2020 and HCF/98/2020), are challenging the legality of the constitution of the Caretaker Committee upon which the decision to audit the association’s account was premised, and a libel.

According to Owoeye, the indicted Secretary, the constitution of the Caretaker Committee by the General House was a violation of the Bylaw of the association; as such power resides only with the Board of Trustees of the Association.

“Hence the audit committee findings, recommendation and allegation of mismanagement of the association’s funds would amount to null and void,” according to his reply.

Absolving himself of any wrongdoing, Owoeye also vowed to make the new exco of the association “pay dearly for tarnishing his hard-earned reputation over the allegation.”

When this reporter reached out to him, he declined to comment further on the matter, saying because there is an ongoing litigation on the said subject matter, commenting further, even to a journalist, would attract dire consequences to him as a lawyer.

Unlike Owoeye, Mr. Taiwo Akinmolaya, the embattled former Financial Secretary, while speaking with TheICIR, said emphatically that “no single kobo was mismanaged” by the former executives of the association.

Although, he admitted, reluctantly, that he borrowed himself the sum of N3million, a non-interest loan routed behind the larger executives because he was one of the signatories to the account, but insisted he didn’t do anything wrong because he has since returned the money.

According to him, “the truth remains that the N3million I borrowed doesn’t even belong to the association. It was the Omo-Onile’s (Ratification) money, which I have since returned.

“So, I don’t know why these people would continue to tarnish my image.  At this juncture, I would have no other option than to sue them for defamation of my character. That is exactly what I am going to do,” he threatened.

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Probing further, this reporter asked Akinmolayan to explain why the act of borrowing oneself an association’s money because one is in the custody of the said money, and without the consent of the rest of the members of the association, should not be described as an abuse of office, his swift response was “you can’t just jump into a conclusion just like that”!

In his own defense, the former Chairman, Pastor Olajide said he has consulted his lawyer upon receiving a request for clarification from this reporter over the matter, and his lawyer has advised him to keep a sealed lip.

According to Adewale, “after I received your message, I had to speak to my lawyer on the matter. And he told me that since the matter is already being adjudicated upon, further petitioning or discussion on it could amount to perjury or contempt of court.

“Therefore, if you really need to speak to me on this matter, I would have to avail you of my lawyer’s contact,” he submitted.

On second thought, however, he decided to offer more, started by debunking the allegation and instead, accusing his accusers of playing a “personal vendetta.”

His lawyer, Barrister Folorunsho Joseph, speaking with this reporter, said his client has not done anything wrong.

He said so far, the complainants have not been able to prove anything against his client in a competent law court, hence “publishing anything on the matter would be at your own risk.

“You will simply be exposing yourself to libel; because we are going to sue you if you do so,” he warned The ICIR.

When asked whether he was privy to a statutory audited report of the association, which conclusively indicted his client and two others, he dismissively disregarded the report, saying it was only a “company reporting and not an audit.

“If you check the report very well, the auditor said emphatically that it should not be used for any external purposes. That it is only meant for internal usage,” he added.

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The whistleblowers

Nonetheless, the aggrieved complainants are some of the co-landlords in the estate, who recently took over as the members of the new executives of the association.

The new executives are Mr. Gbenga Ajumo, Chairman; Mr. Ayobami Oyewusi, Vice Chairman; Mr. Idowu Aremu, Secretary-General; Mr. Bidemi Shokoya, Assistant Secretary; Mr. Funmilayo Arowoogun, Treasurer, Mr. Olutayo Duduyemi; Financial Secretary; Mr, Wale Edalere, Financial Secretary; Mr. Arubuola Rotimi, Financial Secretary 2; Mr. Ajagbe Olalekan Samuel, Ex-Officio; and Mr. Ogo Ozegbe, Ex-Officio.

They are being led by the trio of Aremu, the Gen-Sec, a real estate mogul; Samuel, a Civil Engineer, and Oladapo, a member of the indicted EXCO, who absorbed himself of any wrongdoing. He is a retired brewer with the Nigeria Guinness.

The accusers and the accused were however good friends and neighbors, who used to enjoy the serenity of the beautiful ambiance provided by the uptown estate, until the fraud was unearthed.

Going forward, their friendship had not only turned sour, the quest for justice has stoked up tension that has induced uneasy calmness across the estate.

When the deafening silence breaks, it is by the rudeness of death threats and physical assaults by both families.

TheICIR’s unannounced visits to the estate gave a glimpse of the razor blade sharp tension causing apprehension in the neighborhood.

Houses built next to each other were separated with fences as high as 12/14 fits, in some cases, and impenetrable entrance gates that leave no room for unscheduled visitors.

On a particular street, one of the accusers, who was also a member of the former ex-officio, Samuel, lives with one of the accused, Mr. Akinmolayan, within a distance of less than 100 metres.

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Neither do they greet, nor the members of their respective families! Ditto with Mr. Looto and the former Chairman, Mr. Adewale.

There have been occasions where family members of one of the accused allegedly physically attacked the family of one of the complainants.

As if that was not enough, there was also a separate incident where Samuel, a complainant, was said to have been threatened with “mysterious death” by the former Chairman, Adewale.

Adewale allegedly warned Samuel “to desist from pursuing the matter or else experience sudden/mysterious death.”

The matter was reported at the Ojodu Abiodun Police State and the accused was made to write an undertaking, promising that no harm would be done to the complainant.

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