EFCC Takes Jesam Michael To Court Over Alleged $854,416 Investment Fraud

EFCC has taken Jesam Michael to court over alleged $854,416 investment fraud.

NaijaOnPoint Nigeria reports that Jesam Michael, founder of Afriq Arbitrage System has been sued by the Economic and Financial Crimes Commission (EFCC) over alleged illegal investment activities involving more than $844,000, $10,000 and N590 million.

This Nigeria news platform understands that EFCC presented a seven-count before Emeka Nwite of the Federal High Court in Abuja on Tuesday. Michael and his company were accused of illegally soliciting funds from the public without authorisation from regulatory bodies.

The commission claimed that between September 2022 and June 2023, Michael, through advertisements, invited individuals to deposit money into AAS, despite not being licensed to operate as a financial institution or investment firm.

Meanwhile, FIJ investigated and reported that Michael managed to secure a Special Control Unit Against Money Laundering (SCUML) certificate from the EFCC without proper checks.

The EFCC alleged that Michael and AAS operated outside the law by offering financial services and investment opportunities without approval from the Central Bank of Nigeria (CBN) or the Securities and Exchange Commission (SEC).

The anti-graft agency said these actions violated sections of the Banks and Other Financial Institutions Act (BOFIA) and the Money Laundering Act.

Among the charges, the EFCC accused Michael of converting N590 million — part of the proceeds from the sale of two properties seized from another suspect — into his company’s funds, knowing the money was linked to criminal activity.

The properties are located at Ologolo Street off Lekki-Epe Expressway and Nnamdi Azikiwe Road, Lakowe Golf Estate, both in Lagos.

In addition, Michael is accused of defrauding two individuals — Ladi Musa Audu and Sir Augustine Ibolo — of $844,416.36 and $10,000 respectively.

The EFCC said he lured them to invest in AAS under the false promise that their investments were safe and refundable, even though he knew those claims were untrue.

The EFCC also said it intends to call witnesses from the CBN, SEC and various financial institutions to testify that neither Michael nor his company had the legal right to collect funds from the public or run an investment platform.

At the bail hearing on Tuesday, Emmanuel Agabi, Michael’s lawyer, told the court that his client had already spent 90 days in detention under both police and EFCC custody and had filed a motion for his release.

In response, EFCC counsel Mary Babatunde presented an affidavit arguing that Michael is a flight risk, noting he was arrested while trying to leave the country. She said the severity of the charges and the weight of the evidence make it unlikely he would return for trial if released.

The EFCC stated that the charges were formally filed on April 16 and it plans to arraign Michael once a judge is assigned to the case.

Justice Nwite clarified that his role is limited to hearing the bail application and adjourned the matter to Monday, April 24, to allow the EFCC time to respond to a further affidavit submitted by Michael’s legal team.

It was also found that Michael ran the scheme, worth about $1.6 billion, without paying taxes to the Federal Inland Revenue Service (FIRS). Furthermore, the SEC reportedly traced 596,000 illegal transactions to Michael’s digital wallet.

More than 10,000 investors were on the investment group Jesam ran, according to FIJ’s investigation. Many individuals reacted to the story with accounts of their own losses at the hands of Micheal.

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