WASHINGTON (CN) – The son of the president of Equatorial Guinea can keep his $38 million jet, a federal judge ruled, finding no evidence that stolen money helped fuel the purchase.
The government’s forfeiture complaint against the aircraft owned by Teodoro Nguema Obiang Mangue gave a dizzying look at the pampered 45-year-old’s other extravagant expenditures, including “eight Ferraris, seven Rolls-Royces, five Bentleys, four Mercedes, a Porsche, two Lamborghinis and an Aston Martin,” as well as $275,000 for a glove once worn by Michael Jackson.
Nguema’s father, Teodoro Nguema Obiang Mbasogo, seized the presidency of Equatorial Guinea from his uncle in a 1979 coup.
The U.S. government says Nguema has abused his position as minister of Forestry and Agriculture in his father’s administration to extort companies currying favor in the oil-rich nation.
U.S. District Judge Rudolph Contreras found no evidence Friday, however, that such funds helped Nguema pay for the Gulfstream Aerospace model G-V aircraft.
“Although the government alleges that Nguema lives far beyond his means, the court cannot leap to the conclusion that his largesse is evidence of criminal activity,” Contreras wrote.
That Nguema lives beyond his means is an understatement to the government.
It said Nguema belongs to his father’s corrupt “Inner Circle: a small number of individuals who hold critical positions of political and economic power.”
“During President Obiang’s more than 30-year rule, members of the Inner Circle have amassed extraordinary wealth through a variety of corrupt schemes,” the complaint stated.
Nguema was well taken care of: “In 1991, at the age of 23, Nguema came to the United States to study English as a Second Language at Pepperdine University in Malibu, California,” the complaint stated. “He did not live on campus; instead, he shuttled between rooms at the Beverly Wilshire Hotel and a house he rented in Malibu. After five months, he dropped out of the program. His tuition and living expenses (including his hotel bill and the rental of the house in Malibu) were paid by an American Oil company operating in Equatorial Guinea.”
Dropping out of college didn’t hurt him, though. His father gave him concessions to harvest 88,000 acres of rainforest – National Forests – and also made him minister of Forestry, and junior was on his way, “to enrich himself through corrupt schemes in the timber industry,” according to the complaint.
Then President Obiang gave him control of the country’s infrastructure development, which allowed him to award his company multimillion-dollar government contracts for road construction, the government said.
The young heir apparent extorted millions from companies doing business in E.G., refusing to sign approvals for timber exports unless the exporter pays a “tax” for Nguema’s personal benefit, according to the complaint.
Uncle Sam said Nguema used his extorted wealth to buy millions of dollars worth of sports cars, mansions, celebrity memorabilia and sports boats, and spent $290,000 to design a $380 million yacht that he decided not to buy after all.
“In March 2001, Nguema bought a new 2001 Bentley automobile in Beverly Hills, California, paying for it with a personal check for $366,000, drawn on his Riggs Bank account,” the complaint stated. “A few months later, he bought a second 2001 Bentley, from the same dealership in Beverly Hills, for which he paid $57,500 in cash and $228,000 by personal check drawn on the same account.”
But the luxury houses in Bel Air and Cape Town, South Africa; the luxury cars; and $130,000 in Gucci and Dolce and Gabbana designer clothes were just the start, according to the government’s complaint and Contreras’ ruling. Nguema also sunk $2 million on two high-performance racing boats, one of which literally sunk and cost him $400,000 to salvage.
He also bought “$3.2 million worth of Michael Jackson memorabilia,” including Jacko’s “Bad Tour” glove, which cost him $275,000.
“When opening accounts at financial institutions in the United States, Nguema provided various explanations for his source of funds,” the government’s complaint stated. “For example, in March 2007, when opening a bank account at Comerica Bank in California, Nguema claimed that he acquired money from a ‘family inheritance’ and from ‘trading expensive and custom automobiles.’ In September 2006, when opening a bank account at Pacific Mercantile Bank in California, Nguema claimed to be self employed as an ‘investor,’ in addition to serving as Minister of Agriculture and Forestry. As a member of the Inner Circle, Nguema derived his funds from a variety of corrupt schemes.”
All this came to light due to a U.S. Senate investigation on money laundering and foreign corruption, “which focused in part on money brought to Riggs Bank in the United States from E.G. that was suspected of being proceeds of foreign corruption in E.G.,” the government said.
Nguema bought his jet from Blue Sapphire Services, a British Virgin Islands company. He paid the company’s escrow agent, McAfee & Taft, a $15 million down payment, but the agent stopped the deal because “Nguema refused to comply with that company’s requirements, including a requirement that Nguema identify the source of the funds,” Uncle Sam said in the complaint.
Nguema then bought the jet through another escrow agent, IATS of Oklahoma City, according to the complaint.
Contreras noted that the complaint surely “paints a troubling picture of endemic corruption in Equatorial Guinea. But the government has done so with brushstrokes that are much too broad. The government cannot proceed by casting general allegations of lawlessness in the county in which the relevant transactions took place.”
Troubled by the scale of the alleged corruption, Contreras dismissed the complaint but will Uncle Sam a chance to amend its claims.
“Absent some specific indication that the jet is derived from or traceable to illicit activity, the complaint must be dismissed,” he wrote. “The court has little doubt that the government could cure these deficiencies by filing an amended complaint that alleges additional facts. Thus, the court will dismiss the complaint without prejudice and grant leave to amend the complaint.”
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