EFCC v. Chidolue [2019] 2 NWLR (Pt. 1657) 442 at 461, paras. B-C, per Okoro JSC:

“My understanding of the above provisions [Section 14(2) and (3) of the Economic and Financial Crimes Commission (Establishment) Act, 2004] is that where a person, be it Federal Government, State Government, Local Government, an institution or an individual complains to the EFCC that someone has defrauded him or it, and the EFCC, in the process of investigation, makes financial recoveries, such recoveries being part of the monies of the complainant, belongs to the complainant and ought to be paid to the complainant.”

Notes:

The Economic and Financial Crimes Commission (EFCC) is one agency of the Federal Government established to tackle cases of financial crimes and the Commission has been doing a remarkable job in this regard over time. It is common for persons including individuals, corporate entities and even the Government (at all levels) to engage the services of the EFCC in cases of financial fraud and other criminal misappropriation of funds by any person.

In the process of carrying out the necessary investigation, the accused person(s), being under the EFCC net, may make some refunds. Naturally, it would be expected that there ought not to be any controversy regarding who is entitled to such refunds. In practice, the EFCC ensures the complainant gets the refund made. However, this is not always the case as we shall soon see from the facts of the instant case of EFCC v. Chidolue. The controversy arose from the provisions of Section 14(2) and (3) of the Economic and Financial Crimes Commission (Establishment) Act, 2004 (EFCC Act).

Section 14(2) thereof provides that the EFCC has the powers to compound any offence punishable under the EFCC Act by accepting such sums of money as it thinks fit, exceeding the maximum amount to which that person would have been liable if he had been convicted of that offence. Section 14(3) thereof provides that all monies received by the EFCC where an offence is compounded should be paid into the Consolidated Revenue Fund of the Federation.

To compound an offence means to receive some money or property or other consideration in return for an agreement not to prosecute or inform on one who has committed a crime. (Black’s Law Dictionary, 6^th Edition). According to Okoro JSC, for the EFCC to properly compound an offence under the EFCC Act, the following must co-exist:

“1. The accused must not only have knowledge of the offence, there must be the actual commission of crime.

2. There must be an agreement not to prosecute.

3. There must be a receipt of consideration, i.e., sums of money exceeding the maximum amount to which that person would have been liable if he had been convicted of the offence.

4. The offence must be punishable under the EFCC Act.”

The Supreme Court has clearly drawn a distinction between two categories of funds which can come into the hands of the EFCC from an accused person. The first is money recovered as part of the money belonging to the complainant. The second is money paid by an accused person in furtherance of an agreement with the EFCC that the Commission would not prosecute the accused person for a particular crime under the EFCC Act. This second category may arise even where the offence in question may not necessarily involve recovery of monies (lost through fraud) belonging to any complainant. The apex Court has now made it clear that only monies received for purposes of compounding an offence that must be paid in to the Consolidated Revenue Fund of the Federation pursuant to Section 14(3) of the EFCC Act.

Therefore, the Commission must at all times keep adequate record of any money received from an accused person to avoid any confusion. Thus, where any money is recovered from a person accused of defrauding another person, such money must be returned to that other person (the complainant). It must be mentioned that this does not mean that the EFCC thereby becomes a debt collecting agent. The Supreme Court has held in plethora of cases that the EFCC and other law enforcement agencies are not debt collectors.

In EFCC v. Chidolue, the Respondent sold a property (Chelsea Hotel Abuja) to a company owned by the former of Governor of Bayelsa State (Late Chief DSP Alamieyeseigha) for about 1.5 Billion Naira. This was discovered by the Appellant (EFCC) following an investigation carried out based on a petition against the ex-Governor (now deceased). Following the filing of a charge against the ex-Governor, the EFCC obtained an interim forfeiture Order against the properties mentioned in the Charge. While the Order was still pending and the ex-Governor impeached, the Respondent made moves to re-transfer the Property (Hotel) to the Bayelsa State Government. In the process, the Respondent was alleged to have misled the Bayelsa State Government that he had sold the Property earlier for 2 Billion Naira out of which he had received 1.5 Billion Naira only leaving a balance of 500 Million Naira. Due to this development, a fresh agreement was reached whereby the Bayelsa State Government paid the Respondent 400 Million Naira. The EFCC discovered the alleged fraud in the course of investigation and invited the Respondent. According to the Respondent, he was detained in the EFCC’s custody for over 30 days and was later granted an administrative bail after a statement under caution, signing of bail bond and payment of a cheque in the sum of 100 Million Naira. Upon his release on bail, the Respondent commenced an action for the recovery of the 100 Million Naira deposited with the EFCC, among other claims.

The trial Court dismissed the suit. The Respondent appealed to the Court of Appeal which allowed the appeal in part and directed the EFCC to release to the Respondent the said cheque in the sum of 100 Million Naira. The EFCC appealed to the Supreme Court. The appeal was unanimously dismissed. It was the Appellant’s contention that the 100 Million Naira taken from the Respondent was part of the money he should pay to facilitate the compounding of the offence he was alleged to have committed. The Supreme Court would have none of that. Okoro, JSC expressed the opinion of the apex Court thus:

“…However, the Respondent says the money was collected from him under duress in order to secure his bail after being incarcerated for over 30 days. The question now is, where is the agreement? Unfortunately, there is none. In this type of transaction [compounding of offence], no matter how small or how big the amount involved, there ought to be a written understanding signed by the parties evidencing the payment and reason for the payment of the money. It cannot be left in the heart or subconsciousness of either party. The courts, not being present at the time parties enter into transaction, rely on evidence of such transaction tendered by the parties. Had an agreement been written and signed by the parties, this controversy would have been easy to resolve, especially as the Appellant states in its brief that the Respondent agreed to return the N400m he collected from Bayelsa State Government and deposited N100m as part payment of the said sum.”

To drive home the point more directly, his Lordship stated:

“Clearly, that sum of N100m was not money for compounding offence but part of money belonging to the Bayelsa State Government as stated by the Appellant itself. The question may be asked, had the Respondent refunded the entire N400m, could the Appellant have paid same into the Consolidated Revenue Fund of the Federation? I do not think so. The reason is that the money contemplated by Section 14(2) of the EFCC Act is the fine exceeding the maximum amount to which the Respondent would have been liable if he had been convicted of that offence. Definitely not the monies belonging to the complainant. Conviction takes place in court, not at the EFCC office.”

The Supreme Court further found that, aside the absence of any agreement evidencing the compounding of the offence, there was no evidence that the Appellant paid the N100m into the Consolidated Revenue Fund of the Federation or returned same to the Bayelsa State Government. The only reasonable guess, according to the Court, would be that the money was with the EFCC. The money was paid in 2006 but up to 2008 when the Respondent filed the case, nothing happened. The Respondent was neither charged to court nor further payments made. Also, no evidence of the maximum amount payable upon conviction.

Absolutely dissatisfied with the conduct of the EFCC, Okoro, JSC censured the Commission as follows:

“I need to emphasise that security agencies saddled with the enforcement of certain statutes are bound to do so within the bounds of the rule of law. Those entrusted to enforce the law, should not themselves break the law. Had the EFCC followed the law to the letter, and made a valid agreement to compound the offence the Respondent is alleged to have committed, there would have been no lacuna which the Respondent appears to have exploited in this case.”