If you do business globally as a multinational company, employee or consultant, you might wish to follow the convoluted U.S. legal case against Lebanese ship salesman Jean Boustani.
Boustani was the chief sales executive of a global shipbuilding company, Privinvest, based in the Middle East with operating shipyards in France, Germany and elsewhere. Privinvest has built vessels and systems for about 40 navies to protect their waters.
In 2012, when the Mozambique government launched a series of maritime projects to build a tuna fishing fleet, shipyard facilities and a coastal navy to protect its waters, Boustani helped Privinvest win the contracts.
But after Privinvest delivered the vessels and systems, Mozambique abandoned the projects, defaulted on $2 billion in debt financing and was accused of hiding most of the debt from the International Monetary Fund, which suspended its assistance to the impoverished nation. The Mozambique “tuna bond scandal” is, like sloppily managed fishing nets, a tangled mess.
As authorities cast about for culprits, Boustani sits in a New York jail awaiting trial on charges of conspiracy to commit securities fraud, wire fraud and money laundering. In January, U.S. agents seized Boustani at New York’s John F. Kennedy airport. A U.S. judge rejected Boustani’s request for a $20 million bail and house arrest, declaring him a flight risk because he was not a U.S. citizen or resident and had no ties in the U.S.
That’s exactly the problem with the U.S. case against Boustani. He’s not an American, he didn’t work for an American company and he didn’t do any business in America. Any harm he caused to Americans is unspecified. These facts and others have given rise to criticism of the case in the U.S., including a commentary published in July in The Washington Times.
The U.S. case against Boustani tries to prove he was the “mastermind” of a deal corrupted by bribes and kickbacks that harmed U.S. investors through the defaulted Mozambique loans. Boustani denies the charges and says he had nothing to do with the creation or sale of the Mozambique debt, which was handled by Europe investment banks. Nor did Boustani receive any money from the Mozambique debt sales, he says. The U.S. case also curiously fails to name any specific debt security or investor Boustani allegedly harmed.
Boustani’s case raises knotty questions about America’s role as world policeman in commercial matters. Can the U.S. claim the power to seize and jail non-U.S. business executives and try them under U.S. business laws, especially if their alleged crimes didn’t happen on U.S. soil or harm U.S. citizens or entities? Can non-Americans like Boustani be held to U.S. laws? If so, does that invite other nations to retaliate?
In Boustani’s case, his defense points out that he’s a Lebanese citizen who worked for a Middle Eastern company while Mozambique government-sponsored companies made alleged false statements to obtain loans from European investment banks. In addition, the defense adds, the banks sold the debt securities to buyers across the world in a series of foreign transactions. As Boustani asks, “What does this case have to do with the United States?”
The question goes well beyond Boustani’s plight and into the U.S. role of involving itself in crimes beyond its borders.
U.S. President Donald J. Trump has declared that America is not the world’s policeman. The U.S. court system is also challenging America’s right to police global business beyond its shores.
A few years ago, British citizen Lawrence Hoskins, who worked in France for the United Kingdom subsidiary of the Paris-headquartered global power and transportation company Alstom, was convicted of being part of a scheme to bribe Indonesian officials to win a $118 million power contract. U.S. authorities claimed jurisdiction in the matter because Alstom’s U.S. subsidiary allegedly was involved in retaining consultants that arranged the bribes.
Hoskins never worked for Alstom’s U.S. subsidiary in any direct capacity and never traveled to the United States for the deal. But prosecutors said Hoskins communicated with the accused consultants and one had a bank account in the U.S. state of Maryland. This, U.S. authorities claimed, constituted a crime in America.
A U.S. appeals court rejected this view. That’s a helpful clarification for anyone—in Africa and beyond—who is involved in global commerce. But Lawrence Hoskins’s exoneration doesn’t free Jean Boustani from his U.S. charges and New York jail. Not yet.
The U.S. and every other nation understandably demand the right to capture and try global terrorists, drug traffickers and other criminals that threaten their people. But if America can charge a Lebanese ship salesman working for a Middle Eastern company over a transaction in Mozambique financed by European banks alleging tenuous harm to Americans, then is anyone involved in international commerce safe from U.S. policing? The Boustani case is worth watching to find out.
Gil Kapen is a Special Advisor at the American Jewish International Relations Institute and a former staffer on the House Subcommittee on Africa.
The Nakpodias jailed for laundering money to Black Axe leader in Nigeria. L-R, Unuakpotovo, Okemiorukaye and Esther
Three Nigerian siblings who were working directly for the leader of the Nigerian Black Axe gang, Augustus Bemigho-Eyeoyibo, have been jailed for a total of 16 years after laundering nearly £1m to him in Nigeria through UK bank accounts.
Crown Prosecution Service reported on its website that Okemiorukaye Nakpodia, 56, was found guilty of conspiracy to money launder at Woolwich Crown Court on 8 May. Esther Nakpodia, 35, Unuakpotovo Nakpodia, 46, both pleaded guilty at an earlier hearing.
They laundered the proceeds of hundreds of frauds between 2007 and 2015.
Police identified 174 suspicious transactions entering bank accounts. Money from a number of the victims of the original frauds ended up in the defendants’ bank accounts and was then laundered by the Nakpodias.
Augustus Bemigho-Eyeoyibo, leader of Black Axe, recipient of the money
Augustus Bemigho-Eyeoyibo, is the brother-in-law of the three defendants. Black Axe is a banned organisation in Nigeria and has been linked to decades of murders, rapes, extortion and drug dealing in Nigeria and across the world, with members allegedly swearing a ‘blood oath’ to join.
Philip Slough, for the CPS, said: “We were able to show the Nakpodias were talking to Augustus Bemigho-Eyeoyibo, the leader of Black Axe, based on conversations found on their devices. They talked about the amounts, and what to do with the funds after they arrived, including how much to keep for themselves.
“This strong evidence confirmed that the Nakpodias had been actively involved for a number of years in a conspiracy to launder money which had been stolen by others using phone and email scams.
“This prosecution will play a role in starving a dangerous criminal gang of funds and we will seek to recover their proceeds of crime at a later hearing.”
Today at Woolwich Crown Court Unuakpotovo Nakpodia has been jailed for seven years and seven months, Okemiorukaye Nakpodia has been jailed for six years and six months, while Esther Nakpodia has been sentenced to two years and six months in prison.
Building the case
Philip Slough, for the CPS, said: “Esther Nakpodia claimed to have never heard of Black Axe, denying links to the organisation – this despite the fact her sister has been married to the group’s leader for 14 years.
“She denied knowing that Augustus Bemigho-Eyeoyibo is involved in gang activity, and said she believed he was a reputable business man. She accepted being in possession of £28,000 when arrested – this was money withdrawn from her bank account and was taking it with her to Nigeria to give to her sister and brother-in-law in person. A number of incriminating text messages were found on her mobile phone seized from her upon arrest, revealing her deep involvement in the laundering of these funds.
“Unuakpotovo Nakpodia admitted opening and controlling numerous bank accounts – between January 2007 and February 2015, she received over £700,000 of suspicious payments from between 65 and 70 unconnected parties in 16 different countries. Unuakpotovo also denied being part of a conspiracy to money launder the proceeds of crime.
“Okemiorukaye Nakpodia accepted all transactions relating to the bank accounts attributed to him – he received nearly £50,000 of direct suspicious payments from eight unconnected third parties in three different countries. He claimed not know the source of these transfers.”
There are various piecemeal ways to unlock opportunities in business, real estate, and education; or obtain robust downside protection against various market risks and potential geopolitical instability.
However, probably the only way to achieve all of these things in one fell swoop, is through residence- and citizenship-by-investment. Visa rules can and do change, as do governments, but permanent residence and citizenship are for life and, in the case of citizenship, can be easily passed down to future generations.
The once-niche industry of citizenship planning has evolved. In the 1980s, the very notion of acquiring alternative citizenship was considered irregular, if not eccentric. Today, not only is investment migration common practice around the world but has become an increasingly core component of wealth management strategies in Africa.
For today’s high-net-worth individuals (HNWIs), the strategic logic of investment migration is self-evident. Investment migration programs, which offer a facility whereby individuals can acquire alternative residence or citizenship in exchange for a significant economic contribution to another country, are fundamentally designed to manage the combination of risk and opportunity.
It is important to recognize that alternative residence or citizenship is not simply a pleasant accessory for the wealthy but an integral part of holistic wealth planning. Since becoming a mainstream practice, citizenship planning has effectively helped to create an entirely new asset class for HNWIs, which offers significant value — extending well beyond improved visa-free access, a wider variety of lifestyle choices, and enhanced global mobility.
It is an undeniable fact that political instability is a global phenomenon, but the impact of its far-reaching consequences is felt more on the African continent. Fundamentally, investment migration programs are designed to manage the combination of risk and opportunity. Holding additional residence and/or citizenship creates security, reliably diversifying risk through greater protection from volatile markets and political instability.
Investment migration also permits access to a significantly expanded suite of travel options, attractive opportunities for real estate investment, and major other business investments. In short, the benefits that accrue from having additional residencies and/or citizenships generate unique value for the investor that go beyond simply providing political risk insurance.
This crucial combination of risk mitigation and opportunity creation protects individuals from being at the mercy of a single government and subject to conditions they cannot control. For instance, holding alternative European citizenship guarantees the right to travel, trade, and settle anywhere in Europe, without restriction, as well as granting access to all the benefits enjoyed by other citizens of the state in question (education, health care, and so forth).
Having this kind of mobility makes expanding businesses and overseeing international operations significantly more efficient. In essence, alternative citizenship dilutes the power that a single state can exercise over you, which leaves you at liberty to make autonomous decisions regarding the deployment of your capital.
By now, it is not hard to argue that a well-rounded, integrated, holistic global investment strategy for HNWIs would be lacking if it did not include citizenship or residence planning. The benefits of investment migration are so compelling, that it is no surprise to see many law firms, wealth planners, and family offices already including this component in their financial planning discussions with wealthy clients.
Whether an individual seeks alternative citizenship or residence during their working years, post-retirement, or during a phase of succession planning, it is becoming ever clearer that, as a new asset class, residence- and citizenship-by-investment are no longer part of a bespoke service offering. Investment migration is officially becoming mainstream.