Fraud lawsuit filed against Kentucky firm (Rep. William Jefferson D-La., wife Andrea, iGate CEO)

Fraud lawsuit filed against Kentucky firm
CEO pleaded guilty in Jefferson probe
Wednesday, February 14, 2007
By Bruce Alpert

WASHINGTON -- Rep. William Jefferson, his wife, Andrea, and the CEO of Kentucky technology firm iGate Inc. defrauded investors by using company money for illegal activities, including the payment of bribes that put the company out of business, according to a lawsuit filed by a stockholder.

Vernon Jackson, the CEO of iGate Inc., who has pleaded guilty to bribery of a public official and says he made payments of $367,500 to bank accounts controlled by Jefferson family members, did not immediately respond to requests for comment. Jackson and a second defendant, Brett Pfeffer, who pleaded guilty to two bribery-related charges, are scheduled to begin serving their sentences -- seven years and one month for Jackson and eight years for Pfeffer -- on March 1.

According to the lawsuit, plaintiff Daniel Cadle, an Ohio investor, agreed to buy 327,500 shares of the privately held iGate in 2000 after being convinced that Jackson's copper wire technology could provide broadband, multimedia and data transmissions at low cost to underserved areas of the United States and abroad, said his attorney, Mason Miller. Cadle's investment was around $500,000, Miller said.

But the company ended up "defunct and in bad standing," the lawsuit alleges, because of a scheme, carried out by the defendants without notice to stockholders, to bribe officials in Nigeria and Ghana and funnel money to ANJ Group under a professional services contract represented as "legitimate consulting services."

"In fact, the payments were actually payments made on behalf of Congressman Jefferson in exchange for his performance of official acts in promoting iGate products and businesses, in the United States and abroad," according to the lawsuit.

Strong convictions: Nigeria's first anticorruption czar
Thu Feb 8, 4:00 AM

When Nigerian parents want their children to behave, they don't threaten them with a spanking. Nowadays, they say: "If you keep that up, I'll tell Ribadu."

Such is the reputation of the nation's first anticorruption cop.

In person, Nuhu Ribadu looks more like a geek than a cudgel-bearer. A lanky man with black-rimmed glasses and boyish grin, he doesn't come across as someone who would instill fear in Nigerian children - let alone corrupt politicians and businessmen.

Yet no individual has come to represent integrity and rule of law more than this former prosecutor. Last month, The Vanguard newspaper in Lagos named Mr. Ribadu 2006 "Man of the Year" for having "touched lives and influenced events, for better or worse, in Nigeria more than any other person or issue in the past year."

Critics say Ribadu has tainted his efforts by becoming a political pawn of Nigeria's President Olusegun Obasanjo - selectively finding graft. Still, even ardent opponents of Mr. Obasanjo laud his appointment of Ribadu as head of the first financial fraud agency.

"The EFCC [Economic and Financial Crimes Commission] is a major turning point in the war against corruption. Nobody can take that away from Obasanjo," says Jibrin Ibrahim, director of the Centre for Democracy and Development, and a critic of the administration.

To appreciate the progress made, consider where Nigeria was when Ribadu began his crusade in 2003.

* Not a single case of fraud had been successfully prosecuted in 20 years; to date, there have been 130 convictions, including state governors and other high officials. Of late, the vice president has been in Ribadu's cross hairs.

* Nigeria had a reputation as the global capital for e-mail scams - letters that seek to borrow your bank account to park millions, for a "token" deposit. The so-called 419 scams (after a section in the Nigerian criminal code) gave his nation " a horrible image," says Ribadu. In its first three months, the EFCC shut down more than 2,000 illicit e-mail operators, recovering some $750 million for victims. "He wanted to quickly send a message, and develop a credible track record," says Asishana Okauru, a Nigerian who was working for IBM in Raleigh, N.C. in 2003 and moved home to become one of the first members of the enforcement team.

* Since oil sales began filling government coffers in 1970s (Nigeria is Africa's biggest crude-oil exporter), political and military leaders have lined their own pockets with an estimated $380 billion, says Ribadu. In the past four years, the EFCC has started to reverse the flow, recovering $5 billion in stolen public funds.

That doesn't mean corruption has ended. In 2006, Nigeria was still perceived as among the most corrupt nations in the world, according to surveys of businessmen and officials by Transparency International.

What's different now is the determination, backed by tougher laws and young judges and prosecutors, to make a change.

"No other country in the world, let alone in Africa, has this kind of a record against corruption," boasts Ribadu, warming to the topic during a recent meeting with US journalists. Perhaps more important than the recovered funds, he says, is an emerging public confidence in the rule of law. That in turn fosters expectations of better leadership in a nation that has teeter-tottered between military dictatorships and struggling democracies since independence from Britain in 1960.

"There are sanctions now for politicians who steal, who are selfish," he says. "This is something that's never happened before.... Of course, if you touch them, they say you're stopping democracy. But I say the worst human rights violation is the theft of public money."

To be sure, Ribadu has critics. Their most common charge is that while he may be a good public watchdog, he's also Obasanjo's private Doberman. They concede that the EFCC has helped jail or impeach top officials - but say the agency only investigates political enemies of the president, thus undermining its integrity.

"The EFCC is a very good tool that's been abused [by the president]," says Usman Bugaje, a member of the legislature who was elected on the ruling party ticket but recently switched to an opposition party.

The latest example of such abuse, say opponents, is the EFCC list released Wednesday that cited 135 candidates running in April elections as "unfit to hold public office because of corruption." The list includes 53 candidates from the ruling party and 82, including the vice president, from the opposition party.

The EFCC previously reported that Vice President Atiku Abubakar siphoned nearly $150 million in federal oil money to his accounts, and was linked to the $90,000 found in the freezer of US Congressman William Jefferson (D) of Louisiana in 2005.

Ribadu says the FBI came to him first about the payment, and he followed the trail back to Mr. Abubakar - widely known here by his first name. Abubakar denies paying Mr. Jefferson, and says other claims of malfeasance are an attempt to disqualify him as a presidential candidate in the upcoming election. Representative Jefferson also denies any wrongdoing and was reelected to a ninth term in December.

Lawyer Festus Okoye in Kaduna, Nigeria, says that Ribadu tramples on the rights of the accused by moving too quickly. "We need courageous people like the chairman of the EFCCS - but it holds people in custody three to six months before charging them in court. That's not fighting crime - that's a serious violation of their fundamental constitutional rights."

But Ribadu's defenders argue that given the urgency and scope of the problem, Nigeria can't afford to rely on a cumbersome legal process. "If he followed due process, the corrupt governors would still be in office today or would have escaped," insists Suleiman Hameen, vice chairman of the Port Industry Anti Corruption Committee in Lagos. "The two greatest evils today are terrorism and corruption - and corruption is worse." He adds that Western nations don't worry too much about rule of law when it comes to capturing a terrorist and sending him to Guantánamo Bay.

A European diplomat posted here says, "Ribadu has gone after Obasanjo's enemies. But he's also gone after a few of his friends. Either way, the question that should be asked is: Was he or she dirty?"

Since 2003, Ribadu's ranks of enforcers have swelled to some 1,200. His agency has built a reputation of tackling any kind of corruption - from investigations of 5,000 students and teachers suspected of cheating on university entrance exams to cases of bank fraud and extortion. Ribadu has successfully lobbied for such laws as competitive bidding on government contracts and public audits of the federal oil money distributed monthly to states.

He has worked closely with international law-enforcement agencies such as the FBI, the US Financial Crime Enforcement Network, the UN Office of Drug Control, and Interpol.

The US has lent support with $1 million and the training of 800-plus prosecutors. "We congratulate Nigeria's anticorruption agencies for obtaining results, and doing so in a tough environment," Linda Thomas-Greenfield, US assistant secretary for African Affairs, told Congress last year.

But as elections loom, Nigerians are wondering if the next administration will keep Ribadu - and, by extension, the EFCC.

"I am concerned," says Mr. Okauru, who left a good job in the US in 2003 to become the director of the EFCC's Financial Intelligence Unit. "Ribadu has the drive, energy, focus, and the political support of the president. That's key."

Okauru notes that Ribadu has inspired a corps of young judges to enforce the law in the face of bribes, and has drawn quality employees. "I have résumés on my desk now of law school graduates who are No. 1 in their class," Okauru says. "If Ribadu leaves ... he leaves an effective institution, new legal frameworks, and a lot of international support."

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