The U.S. government is seeking to confiscate a $22 million Los Angeles mansion which used to belong to Nigerian businessman Kolawole Aluko as it goes after assets it says he bought with the spoils of corrupt Nigerian oil deals.
Aluko has been accused of taking part in a massive government bribery scheme in Nigeria involving energy contracts that generated more than $1.5 billion in revenue during the era of President Goodluck Jonathan.
The 15,000-square-foot, six-bedroom Bel Air property, which its developer says has an infinity pool and an “olive grove reminiscent of Southern Italy,” was sold in 2016 to Sarbonne Estate Inc., or SEI, by Aluko.
SEI is controlled by a private-jet entrepreneur, who isn’t accused of playing any role in the Nigerian scandal but has had a luxury jet (VistaJet) business collaboration with Aluko in Nigeria.
Initially, the Justice Department described SEI’s owner as a non-U.S. national who owns an aircraft services company and was a “close business associate” of Aluko.
However, SEI, according to a report by AJOT, in court filings, declared that it’s owned by a person whose business provides “global aviation services to high and ultra-high net worth clients.”
Last week, in its legal fight with the government, SEI filed a disclosure listing Thomas Flohr as the sole owner of the company, which he controls through an entity registered in the British Virgin Islands. Thomas Flohr is the name of the Swiss founder and chairman of VistaJet Group Holding Ltd.
In a civil lawsuit the U.S. filed in July to seize the Bel Air property, 755 Sarbonne Road, the government alleges that the buyer should have known the mansion would be subject to forfeiture because of an existing relationship with Aluko and news articles reporting that the Nigerian businessman was suspected of money laundering.
Aluko transferred the property to SEI in order to repay a $21.6 million debt he owed to another Flohr company, under a contract granting him “exclusive, owner-like access” to a Bombardier Global 6000 aircraft for 3 1/2 years starting in mid-2015, SEI told the court.
Instead of making the required lump sum payment, the parties agreed he could “settle the outstanding debt” with the transfer of the mansion in April 2016, it said.
But Aluko designed the transfer to conceal or disguise “the proceeds of specified unlawful activity,” according to the government’s lawsuit, filed in federal court in Houston. The U.S. makes no such claim against SEI.
SEI in its filings insisted that Flohr understood Aluko to be a man of legitimate means and had no reason to believe the businessman had acquired the property with ill-gotten gains.
At the time, Flohr “did not reasonably have cause to believe” that Aluko had acquired the property “using funds traceable to any crime giving rise to potential forfeiture,” SEI said. He understood Aluko to be “a very wealthy executive” capable of purchasing the real estate “from legitimate sources,” it said.
SEI said that it wants to sell the home but that the U.S. has threatened criminal prosecution if it does.
Flohr founded VistaJet in 2004 with three planes and now operates a fleet of 115 Bombardier Inc. business aircraft that ferry wealthy clients around the world. Aluko partnered with VistaJet starting in 2010 to help it expand into West Africa, according to a statement he put out and an archived VistaJet web page, both from 2012, according to the report.
The statement and web page described him as a member of the aviation company’s advisory board. He was “a loyal client with VistaJet for many years,” according to the page.
The VistaJet spokesman said “no advisory boards were established” and “Aluko never had any role within or ownership in the group including any of its affiliates at any point in time.” The company “respects the privacy and business affairs of all its customers and as part of company policy does not disclose or discuss their identity,” he said.