The U.S. Department of Justice is pursuing Air Peace CEO Allen Onyema and his CFO Ejiroghene Eghagha over allegations of money laundering and obstruction of justice. The practice of “round-tripping” is key to understanding how Onyema has gotten into trouble with law enforcement in America.
The Key Allegations Against Allen Onyema
- Money Laundering: Onyema is accused of laundering millions of dollars by funneling funds meant for aircraft purchases into his personal accounts and repatriating them to Nigeria for resale at higher rates in the black market.
- Obstruction of Justice: Onyema and Eghagha allegedly falsified documents to obstruct a U.S. investigation, aiming to prevent the forfeiture of their U.S.-based assets.
Elites in Nigeria’s business, banking and political spheres have engaged in “round-tripping” since Nigeria started exporting oil and could afford to sell dollars cheaply to businesses. Disparities have always existed between the official and parallel (black market) exchange rates because the “cheap” exchange rates stimulated demand for dollars (and other foreign currencies) beyond what the Central Bank of Nigeria could supply even with gushing petrol dollars.
“Round-tripping” involves buying foreign currency at the lower official rate and selling it at a significantly higher rate on the black market, resulting in substantial, illicit, profits. Under Godwin Emefiele’s tenure as the Governor of the Central Bank of Nigeria during President Muhammadu Buhari’s administration, the multiple exchange rate system was rigidly maintained for 8 years, fostering opportunities for manipulation.
The official and black market rates diverged widely due to restricted access to foreign exchange, leading to rampant round-tripping by those with privileged access. This system was widely criticized for creating inefficiencies, fueling corruption, and worsening the economic situation for average Nigerians, as it distorted market dynamics and hindered fair competition.
Allen Onyema’s Mysterious Fund Transfers (2010–2014)
Between 2010 and 2018, Allen Onyema frequently travelled to Atlanta, Georgia, where he opened several personal and business bank accounts. Over $44.9 million was transferred into these accounts from foreign sources. These funds allegedly came from Nigerian non-governmental organizations (NGOs) controlled by Onyema, but during this period, Air Peace, his airline, did not yet exist. Air Peace was established in 2014, leaving a gap in justifying how Onyema received and moved such large sums of money before its founding.
From 2010 to 2014, Onyema transferred millions of dollars into his U.S. accounts, without any substantial business operations to explain this income. However, this alone was not what brought him into the crosshairs of U.S. authorities.
Alleged Fraudulent Aircraft Purchase
By the time Air Peace was up and running, Onyema shifted his financial activities to the aviation business. As a savvy businessman, he sought to exploit the foreign exchange market. In 2016, Onyema allegedly received $20 million from Nigeria’s Central Bank (CBN) at the official exchange rate. This sum was to be used for the purchase of five Boeing aircraft from a company called Springfield Aviation Company LLC, based in Georgia. However, Springfield Aviation turned out to be owned by Onyema himself and was managed by someone with no ties to the aviation industry.
It is alleged that Springfield Aviation never owned the aircraft it claimed to sell to Air Peace. The funds were reportedly transferred from the CBN to Springfield’s account in the U.S., and then funneled into Onyema’s personal accounts. This act constituted money laundering as the funds were used for purposes different from the official reason provided to the CBN.
By purchasing dollars at the official exchange rate, Onyema allegedly planned to repatriate the funds to Nigeria and sell them on the black market, where dollars were fetching double the price. This strategy, known as “round-tripping,” allowed Onyema to make quick profits. However, U.S. authorities flagged the transactions, launching investigations that led to a slew of money laundering charges against Onyema and his CFO.
Obstruction of Justice Through Forged Documents
By 2019, with U.S. investigators closing in, Onyema and Eghagha allegedly made a desperate attempt to cover their tracks. They reportedly created a fraudulent contract, backdating an “Aircraft Sales and Management Agreement” between Springfield Aviation and Air Peace to 2016.
The goal was to make it appear that the transactions had a legitimate business purpose before U.S. authorities launched their investigation. Onyema and Eghagha allegedly instructed Springfield’s manager to sign the backdated contract without providing a date. This falsified document was then submitted to the U.S. Attorney’s office to dissuade further investigation.
Unfortunately for Onyema, this act of presenting false documents not only failed but led to additional charges of conspiracy and obstruction of justice. The lawyer who submitted the forged contract may have testified against Onyema, invoking the crime fraud exception, which nullifies attorney-client privilege.
Air Peace Denies Charges of Roundtripping, Fraud and Obstruction of Justice
Air Peace has responded to the fresh fraud charges against its CEO, Allen Onyema, stating that Onyema and his legal team are cooperating fully with U.S. authorities. The company emphasized that its legal team is actively engaged in the matter and working to ensure that justice prevails. They expressed confidence that through due process, Onyema will be exonerated.
Despite the charges, which include allegations of submitting false documents to obstruct an ongoing investigation, Air Peace reassured the public that the airline’s operations remain unaffected, with the company continuing to provide top-tier aviation services. The airline reaffirmed its commitment to delivering excellent service, while remaining focused on addressing the legal issues at hand
Onyema’s legal troubles could severely damage the airline’s reputation. Despite being a major player in Nigeria’s airline industry, Onyema cannot risk traveling to the U.S. or other allied countries, for fear of arrest and extradition.
The allegations against Air Peace CEO Allen Onyema highlight significant policy lessons for Nigeria, particularly regarding foreign exchange management. It underscores how rigid controls and administrative allocation of forex was exploited for profit in the black market.
It is important that Nigeria builds on the transparent and market-driven foreign exchange regime that the Central Bank of Nigeria has adopted after Buhari. A market-drive system curbs speculative behaviors like round-tripping and creates a more stable economic environment and restore investor confidence.
