US Court Awards $250 Million in Fraud Case Against Nigerian Entrepreneur Mmobuosi Odogwu Banke
The United States District Court for the Southern District of New York has recently granted a substantial monetary claim exceeding $250 million against Mmobuosi Odogwu Banke, also known as Dozy Nwabuosi, the Nigerian founder of Tingo Group. This ruling comes after Nwabuosi was indicted by Nigeria’s Securities and Exchange Commission for extensive fraudulent activities that spanned several years, impacting investors globally.
The Case Against Tingo Group and Its Affiliates
The court proceedings involved Tingo Group, Agri-Fintech Holdings Inc., and Tingo International Holdings—three entities under the control of Mr. Nwabuosi, who serves as their CEO. These companies, based in the US, ostensibly engage in various sectors including fintech, agritech, telecom, insurance, and microfinance.
According to a 78-page complaint filed by the US Securities and Exchange Commission (SEC) in December, the scale of the fraud is described as staggering. The SEC reported that since 2019, the defendants orchestrated billions of dollars in fictitious transactions through two Nigerian subsidiaries established and managed by Nwabuosi, falsely reporting hundreds of millions in non-existent revenues and assets.
“The scope of the fraud is staggering,” the complaint stated. “Defendants have booked billions of dollars’ worth of fictitious transactions, reporting hundreds of millions in non-existent revenues and assets.”
Nwabuosi is facing a potential 45-year prison sentence. The SEC detailed how the fraudulent activities funded an extravagant lifestyle, including luxury cars, private jets, and even a failed attempt to purchase English Football Club Sheffield United.
Nigerian Investigation and Recent Developments
In Nigeria, Mr. Nwabuosi faced similar charges, but the Nigerian Police Force cleared him and his companies of accusations including fund diversion and forgery in July. Commissioner Ohiozoba O. Ehiede issued a statement exonerating him, despite the ongoing US investigation.
The SEC accused Nwabuosi of masterminding a scheme to inflate the financial metrics of his companies and subsidiaries to deceive investors worldwide. The regulator claimed that the supposed empire built by Nwabuosi was a mere “fiction.”
“Tingo Group’s fiscal year 2022 Form 10-K filed in March 2023 reported a cash and cash equivalent balance of $461.7 million in its subsidiary Tingo Mobile’s Nigerian bank accounts when in reality those accounts had a combined balance of less than $50,” the SEC stated.
Following the investigation, the SEC obtained a temporary asset freeze, an injunction, and emergency relief against the defendants last December. On August 28, 2024, Justice Jesse M. Furman ruled that Nwabuosi and his companies “failed to answer, plead, or otherwise defend this action.”
The Decline of Tingo Group and Nigerian Police’s Vindication
In June 2023, forensic research firm Hindenburg Research accused Tingo Group of accounting fraud, misrepresentation, and tax evasion, causing the company’s Nasdaq share price to plummet by approximately 50% in one day. Tingo Group denied these allegations, claiming the report was misleading and libelous.
Charges against Nwabuosi were filed after the SEC suspended trading of Tingo Group and Agri-Fintech Holdings shares for two weeks due to concerns over the accuracy of publicly available information. Tingo Group subsequently delisted from Nasdaq amid the controversy.
Recently, the Nigerian Police Force’s legal/prosecution section requested the Inspector General of Police to absolve Nwabuosi, Tingo Foods Plc, and Tingo Mobile Plc of charges, stating no evidence supported the case. This followed a petition by Ayoola Olaide, the acting managing director of Tingo Foods and Tingo Mobile, who had previously requested an investigation into alleged fund diversion and misrepresentation.
The Nigerian police found that suspects named in the case were missing and discovered that certain employees had manipulated accounts and documents.
Nwabuosi’s Response
In response to the SEC’s asset freeze, Nwabuosi described the move as a blow to the “lifeblood” of his 23-year endeavor. He criticized the SEC for attempting to tarnish the efforts of many involved in his businesses, claiming the allegations were exaggerated and designed to prevent a proper defense due to the financial strain.
Nwabuosi also noted that a potential buyer has shown interest in acquiring Tingo Group, which he supports.
For further details on this case, PulseN
Court Awards $250 Million in Fraud Case Against Nigerian Entrepreneur Mmobuosi Odogwu Banke
The United States District Court for the Southern District of New York has recently awarded over $250 million in a case against Mmobuosi Odogwu Banke, also known as Dozy Nwabuosi, the Nigerian founder of Tingo Group. This decision follows indictments by Nigeria’s Securities and Exchange Commission for a sweeping fraud scheme that affected investors globally over several years.
Entities Involved
The litigation implicated Tingo Group, Agri-Fintech Holdings Inc., and Tingo International Holdings—three companies under Nwabuosi’s control, where he also holds the CEO position. These US-based entities operate in various sectors including fintech, agritech, telecom, insurance, and microfinance.
According to a detailed 78-page complaint filed by the US Securities and Exchange Commission (SEC) in December, the fraud’s magnitude is overwhelming. The SEC reported that since 2019, the defendants executed billions of dollars in fictitious transactions through two Nigerian subsidiaries controlled by Nwabuosi, falsely declaring hundreds of millions in non-existent revenues and assets.
“The scope of the fraud is staggering,” the SEC noted. “Defendants reported fictitious transactions and inflated revenues and assets.”
Nwabuosi is now facing a potential 45-year prison sentence. The SEC revealed that the fraudulent activities financed a lavish lifestyle, including luxury vehicles, private jets, and a failed bid to purchase the English Football Club Sheffield United.
Nigerian Investigation and Recent Developments
In Nigeria, Mr. Nwabuosi was also investigated for similar allegations. However, the Nigerian Police Force cleared him and his companies of charges such as fund diversion and forgery in July. Commissioner Ohiozoba O. Ehiede officially exonerated him, despite ongoing investigations in the US.
The SEC accused Nwabuosi of orchestrating a scheme to exaggerate the financial performance of his companies to deceive global investors, labeling his claimed empire as a “fiction.”
“Tingo Group’s fiscal year 2022 Form 10-K filed in March 2023 reported a cash balance of $461.7 million in its subsidiary Tingo Mobile’s Nigerian accounts, whereas the actual balance was under $50,” the SEC reported.
Following the investigation, the SEC secured a temporary asset freeze, an injunction, and emergency relief against the defendants in December. Justice Jesse M. Furman’s final judgment on August 28, 2024, found that Nwabuosi and his companies “failed to answer, plead, or otherwise defend this action.”
The Fall of Tingo Group and Nigerian Police’s Vindication
In June 2023, forensic financial research firm Hindenburg Research alleged that Tingo Group engaged in accounting fraud, misrepresentation, and tax evasion, causing its Nasdaq share price to drop by about 50% in a single day. Tingo Group dismissed these claims as false and libelous.
Charges against Nwabuosi followed the SEC’s suspension of trading in Tingo Group and Agri-Fintech Holdings shares for two weeks due to concerns over the accuracy of their public disclosures. Subsequently, Tingo Group voluntarily delisted from Nasdaq amid the controversy.
Last month, the Nigerian Police Force’s legal/prosecution section requested the Inspector General of Police to clear Nwabuosi, Tingo Foods Plc, and Tingo Mobile Plc of charges, citing a lack of evidence. This followed a December 2023 petition by Ayoola Olaide, the acting managing director of Tingo Foods and Tingo Mobile, requesting an investigation into alleged fund diversion and misrepresentation.
The Nigerian police discovered that suspects were missing and noted that employees had manipulated accounts and documents.
Nwabuosi’s Statement
In response to the SEC’s actions, Nwabuosi criticized the move as a significant blow to his 23-year business effort. He condemned the SEC for allegedly attempting to discredit the contributions of many involved in his enterprises, asserting that the accusations were exaggerated and strategically designed to prevent a thorough defense.
Also Read: TotalEnergies sells its Nigeria onshore oil assets to Chappal Energies for $860 million
“Whilst I do not attest to be a saint, I can unequivocally state that the SEC has gone to great lengths to tarnish the hard work and aspirations of so many people – from those at board level to junior staff working in the rural communities in Nigeria,” he stated.
“They levied spurious and egregious allegations at us knowing that they would not be forcefully opposed – not because of any supposed substance to their allegations but because they were (and indeed still are) acutely aware that the defendants would not be able to raise the necessary funds to mount a rigorous defence.”
Nwabuosi also mentioned that a potential buyer has expressed interest in acquiring Tingo Group, which he supports.
“I will continue to encourage this proposed buyout,” he said.
For ongoing updates and detailed reports, PulseNets will continue to provide comprehensive coverage of this case.
