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Awka Anambra State
The Economic and Financial Crimes Commission (EFCC) has arraigned a businessman and two companies before a Federal High Court in Lagos for their alleged involvement in a ₦1.07 billion diesel supply fraud.
The case, which underscores the EFCC’s renewed drive to combat financial crimes in Nigeria’s oil and gas sector, involves allegations of conspiracy, obtaining money under false pretence, and diversion of funds meant for petroleum product supply.
Details of the Arraignment
The defendants, identified as a Lagos-based businessman and two associated firms, were brought before Justice on multiple counts bordering on fraud, conspiracy, and stealing.
According to the EFCC, the defendants allegedly defrauded their business partners of over ₦1.07 billion under the guise of supplying automotive gas oil (AGO), commonly known as diesel, but failed to deliver the product or refund the funds.
The EFCC’s prosecution counsel told the court that the alleged offenses were committed between 2021 and 2023 in Lagos and involved the use of forged documents and deceptive contracts to lure investors into making large prepayments.
The charge sheet stated that the defendants violated Sections 1(1)(a) and 1(3) of the Advance Fee Fraud and Other Fraud Related Offences Act, 2006, and Section 390(9) of the Criminal Code Act, Cap C38, Laws of the Federation of Nigeria, 2004.
How the Alleged Fraud Was Perpetrated
Investigations by the EFCC revealed that the defendants presented themselves as credible oil and gas operators with access to major depots across Nigeria. They allegedly entered into agreements with several clients to supply diesel in large quantities for industrial and marine use.
However, after receiving payments amounting to over ₦1.07 billion, they allegedly failed to supply the products or make any refunds.
Instead, the funds were reportedly diverted into personal and company accounts for purposes unrelated to the contractual agreement.
The EFCC also discovered that the suspects used forged delivery documents and falsified waybills to deceive their victims into believing that the products were being transported.
When their clients demanded delivery or a refund, the defendants allegedly became evasive, prompting petitions to the EFCC.
EFCC’s Investigation and Findings
Following multiple complaints from victims, the EFCC launched an extensive investigation into the matter.
The commission traced several suspicious financial transactions linking the defendants to fraudulent activities involving diesel supply contracts.
Bank records, transaction slips, and internal communications reportedly showed deliberate attempts to mislead clients and conceal the whereabouts of the funds.
The EFCC stated that the alleged fraud not only caused massive financial losses but also disrupted the operations of several local businesses that depended on the diesel supply for their industrial processes.
In a statement released after the arraignment, the EFCC reiterated its commitment to prosecuting financial crimes within Nigeria’s oil and gas sector, which it described as a “high-risk area for fraudulent activities due to the large volume of cash-based transactions.”
Court Proceedings
During the arraignment, the defendants pleaded not guilty to all the charges.
The prosecution, requested that the court set an early trial date to ensure speedy proceedings, citing the public interest in the case and the need to recover stolen funds.
The defense counsel, however, applied for bail on behalf of the businessman, arguing that the charges were bailable offenses and that his client was willing to cooperate fully with the court and the EFCC.
Justice granted the bail application conditionally, setting stringent terms to ensure the defendant’s presence at subsequent hearings. The case was adjourned to a later date for trial.
Reactions from the EFCC and Industry Observers
The EFCC’s spokesperson described the arraignment as a major milestone in the agency’s ongoing efforts to rid the oil and gas industry of fraudulent operators.
According to the agency, petroleum product supply fraud has become increasingly common, with perpetrators exploiting the high demand for diesel and fuel scarcity to defraud unsuspecting clients.
The EFCC warned that any company or individual involved in such fraudulent practices would be thoroughly investigated and prosecuted, regardless of their status.
Industry analysts also commended the commission’s intervention, noting that fraud within the oil supply chain has far-reaching implications for Nigeria’s economy.
Energy consultant noted that large-scale supply fraud undermines investor confidence and discourages legitimate business operators.
Nigeria’s Growing Diesel Market and Fraud Risks
Nigeria’s diesel market has grown significantly in recent years, largely driven by heavy reliance on generators for power and the rising cost of fuel imports.
As a result, diesel trading has become a lucrative but loosely regulated business, attracting both genuine investors and fraudulent actors.
Reports indicate that several individuals and companies have fallen victim to fake supply deals involving billions of naira, leading to losses and business closures.
The EFCC has repeatedly cautioned businesses to verify the authenticity of suppliers, check depot access licenses, and avoid making large prepayments without confirmed delivery guarantees.
EFCC’s Broader Anti-Fraud Efforts
The EFCC has intensified its crackdown on financial crimes across various sectors, including oil and gas, real estate, and foreign exchange.
In recent years, the agency has recovered billions of naira in fraud-related cases and secured several convictions involving fuel marketers and fraudulent contractors.
The commission has also partnered with the Department of Petroleum Resources (DPR) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to monitor transactions and ensure compliance with industry standards.
The latest diesel supply fraud case is part of a broader effort to sanitize Nigeria’s petroleum distribution network and restore trust among investors and consumers.
Conclusion
The arraignment of the businessman and two firms over an alleged ₦1.07 billion diesel supply fraud underscores the EFCC’s determination to enforce accountability in Nigeria’s energy sector.
As the trial proceeds, the case will serve as a test of Nigeria’s legal and regulatory systems in addressing financial crimes that threaten economic stability and investor confidence.
For many industry stakeholders, this case is a wake-up call to strengthen due diligence, enhance contract transparency, and promote ethical business practices in the oil and gas industry.
The EFCC has reaffirmed that no individual or corporation involved in fraud will go unpunished, reiterating its commitment to transparency, justice, and the protection of Nigeria’s economic integrity.
