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U.S. indicts Ogun state governor aide with $350,000 fraud

Abidemi Rufai, the Nigerian citizen accused of stealing more than $350,000 as part of Washington state’s $650 million unemployment fraud, reportedly was also a government official in his home state of Ogun.

According to European and African media accounts on Tuesday, Rufai was a senior special assistant on housing in the Nigerian state of Ogun and an aide to Ogun Governor Dapo Abiodun.

Rufai, of Lekki, Nigeria, was arrested Friday evening by federal agents at New York’s John F. Kennedy airport as he prepared to fly first class to Nigeria by way of Amsterdam, according to federal law enforcement officials.

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Rufai, 42, appeared in federal court in New York on Saturday on charges that he used the identities of more than 100 Washington residents to file bogus unemployment claims with the Washington state Employment Security Department (ESD) during the COVID-19 pandemic last year, according to the federal complaint. It was the first “significant” arrest in that fraud, federal officials said.

On Tuesday, federal prosecutors with U.S. Attorney’s Office for the Western District of Washington in Seattle filed papers arguing that Rufai presents “an extreme risk of flight” and requesting that he be held in custody until his trial in federal court in Tacoma.

Rufai’s attorney, Michael C. Barrows of Garden City, New York, said his client “denies any involvement in these transactions.”

A spokesperson for Gov. Abiodun told the Nigerian newspaper The Vanguard that Rufai has been suspended from his post. “We received the very disturbing news of the arrest of one of the governor’s political appointees, Mr. Abidemi Rufai, in New York over alleged unemployment benefits and fraud in the United States, this morning,” said Kunle Somorin, Abiodun’s chief press secretary, according to The Vanguard.

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On an Instagram account, since made private, Rufai posted photos mentioning his government position. He also shared photos of his candidacy for the Nigerian House of Representatives in 2019, which included flyers with the slogan “Ready and Committed to Serve with Trust and Ethics.”

Rufai also owned a sports betting company called Ecobet, according to a profile in a Nigerian business magazine, which described him as “a young business turk,” “a philanthropist of note” and a “gregarious and enterprising dude.”

Rufai was arrested almost a year to the day after ESD officials announced the temporary suspension of unemployment benefit payments, following the discovery that criminals had used stolen Social Security numbers and other personal information to file bogus claims for federal and state unemployment benefits. Other states reported similar attacks.

The federal complaint alleges that Rufai arrived in the United States on Feb. 19, 2020 and left on Aug. 9, 2020, “and was therefore apparently present in the United States during the period of the fraud.”

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Federal investigators initially identified Rufai through a single Gmail account he used to file 102 claims for pandemic-related unemployment benefits from the ESD, as well as claims at programs in other states, according to the complaint.

According to the complaint, fraudulently obtained unemployment benefits were transferred by ESD and other state unemployment agencies to online payment platforms such as Green Dot, as well as to bank accounts operated by accomplices known as “money mules.”

Bank records show that between March 3 and Aug. 2, 2020, $288,825 was deposited from multiple sources, including Green Dot, into a Citibank checking account in Rufai’s name, according to the complaint and federal officials. Additional funds were transferred to the account of a second individual, the complaint states.

The email and banking tactics allegedly used by Rufai appear to link him with a Nigerian crime organization known as Scattered Canary, which has been blamed for much of the unemployment fraud, according to an expert who has studied the group.

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News of Rufai’s arrest and suspension touched off a flurry of posts on Nigerian social media bemoaning the country’s reported problems with corruption. Nigeria was ranked 149th out of 180 countries on Transparency International’s 2020 Corruption Index.

In August, around the time that Rufai departed from the United States, he was appointed to the post of senior special assistant on housing in Ogun, according to Michael Orodare, a Nigerian journalist with Neusroom.

With the arrest, the Abiodun administration appeared to distance itself from Rufai. “While the governor cannot be held responsible for the actions of a full-grown adult, especially outside the jurisdiction of Ogun State and Nigeria, he has since suspended the suspect from office to enable him to answer the charges levelled against him,” Somorin told the Vanguard.

Investigators say Rufai returned to the United States at some point after his August departure.

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Federal officials acknowledged that Rufai’s presence in the United States probably was unusual in the unemployment fraud scheme. Many of the fraudulent claims that hit the ESD were likely filed from outside the United States, according to the complaint.

At the peak of the fraud last May, up to 13,000 fraudulent unemployment claims were being created per day. Nigeria was the fourth-highest source of Internet traffic accessing Washington’s unemployment system, up from 64th previously, according to internal ESD communications released under public records laws.

After initially paying out many of the fake claims, Washington officials moved to block the foreign scammers — at one point blocking all Internet traffic from outside of the U.S. and Canada to the ESD website.

In January, a federal judge issued a warrant to Google, which operates Gmail, allowing investigators to search Rufai’s Gmail account, according to the complaint.

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Although the Gmail account used Rufai’s alias — Sandy Tang — a Nigerian-based cell phone number linked to the Gmail account was traced to Rufai’s 2019 U.S. visa application, according to the complaint.

Late last week federal officials learned that Rufai was preparing to fly on Friday night from JFK to Amsterdam with a final destination of Lagos, Nigeria, according to a federal affidavit filed Saturday. An arrest warrant for Rufai was issued Friday.

Federal agents arrested Rufai after he arrived at JFK at around 7:45 Friday evening.

If found guilty, Rufai faces up to 30 years in prison.

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Rufai is scheduled for a detention hearing Wednesday in New York. Barrows, Rufai’s attorney, said his client doesn’t represent a flight risk, in part because Rufai has given up his passport.

Further, Rufai could be prevented from fleeing through “less restrictive means than having him remain in jail,” including travel restrictions and electronic surveillance, said Barrows.

He noted that defendants accused of substantially larger financial crimes have avoided pre-trial detention. “You have white-collar criminals [such as] insider traders who steal millions of dollars who are released on their own recognizance,” Barrows said.

Federal prosecutors contended that Rufai does indeed represent a flight risk.

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In Tuesday’s filings, federal prosecutors noted that Rufai was attempting to leave the country at the time of his arrest and that he has “strong ties to Nigeria, and no ties at all (apart from this fraud) to the Western District of Washington.”

Rufai also has economic resources “that could facilitate his flight from prosecution,” federal prosecutors said. Although Rufai told law enforcement authorities he had just $16,000 in his bank accounts, he “was preparing to board a first-class flight to Nigeria with five debit cards and two credit cards in his wallet, a luxury Cartier watch, seven pieces of luggage, and three smartphones on his person,” federal prosecutors noted.

Further, if Rufai were able to “escape to Nigeria, extradition will be extraordinarily difficult or impossible because of his ties to the Nigerian government,” federal prosecutors added.

According to a recent report by the state auditor’s office, fraudsters filed tens of thousands of bogus claims worth $646.8 million. (Not all of the impostor claims were paid; many were stopped by the ESD before funds went out.) Of that, the state has recovered $370 million, according to the audit.

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