The Nigerian police high command has been compromised in the case of Jesam Michael, CEO of Afriq Arbitrage System (AAS), who was arrested for fraud and financial exploitation.
Sources informed SaharaReporters that Michael, identified as one of Nigeria’s cryptocurrency fraudsters, is accused of defrauding investors of $87.6 million. Numerous victims claim they have been unable to withdraw their principal funds or promised returns from AAS for over 18 months.
Also, sources revealed to SaharaReporters that the police hierarchy has been shielding Michael, even going as far as arresting and detaining more than four individuals for cyberbullying in connection to his case.
These individuals were held by the Special Investigation Unit of the Inspector General of Police (IGP).
“The police high command is compromised. Jesam Michael duped subscribers of over $87.6 million. Meanwhile, the guy got the police to arrest and detain over four persons and detained them for cyberbullying.
“Though they were later released, they were detained for a considerable period of time because this guy,” a source said.
SaharaReporters further learned that after Michael’s arrest by the Nigeria Immigration Service in collaboration with the police, the police hierarchy is making plans to secure his release.
“And now that he is arrested by Immigration along with the police, they are already trying to get him bailed out,” a source said.
SaharaReporters reported on January 30 that Michael’s arrest followed an investigation into Afriq Arbitrage System’s financial activities and the management of investors’ funds.
According to Nigerian police spokesperson Muyiwa Adejobi, the case began when Michael reported to the Inspector-General of Police (IGP) Special Investigation Unit (SIU) that he was defrauded of $87 million by Abayomi Segun Oluwasesan.
Although Oluwasesan admitted to the fraud, he contested the amount involved. Suspicion arose when Michael transferred the recovered assets into his personal name instead of Afriq Arbitrage System’s, raising questions about his true intentions.
Investigations into AAS operations revealed that investors had been unable to withdraw their funds or returns for over 18 months. Despite repeated requests from law enforcement, Michael was unable to provide credible proof of legitimate trading activities, a repayment plan for affected investors, or verifiable medical records for a surgery he claimed had impacted his ability to manage AAS operations.
“His lack of credible evidence, especially concerning his claimed health issues, which he suggests hindered his ability to grant full system access, raised serious questions about his credibility and the integrity of AAS,” the police said in their statement.
How Michael Carried Out Similar Scam In US
SaharaReporters learned that Michael similarly withdrew funds from a US-based cryptocurrency platform before it was shut down.
WATCH: How Nigeria Police Hierarchy Protected One Of Nigeria’s Cryptocurrency Criminals, Jesam Michael pic.twitter.com/NhwDBe5LSR
— Sahara Reporters (@SaharaReporters) February 12, 2025
In May 2022, the firm ceased honoring investor withdrawal requests, citing technical issues. Shortly thereafter, the platform stopped operating its website.
Exclusive documents obtained by SaharaReporters revealed that the State of California ordered a shutdown of Michael’s cryptocurrency firm, Cryptos OTC Trading Platform Limited, in 2022 for violating sections 25110 and 25401 of the state’s Corporations Code.
The State of California described the platform as a scam, comparing it to a Ponzi scheme.
The order issued by the Commissioner of Financial Protection and Innovation (Commissioner), Clothilde V. Hewlett, was signed by the Deputy Commissioner Enforcement Division, Mary Ann Smith.
The commissioner in the document obtained by SaharaReporters on Wednesday, said the Department of Financial Protection and Innovation (Department) regulates the offer and sale of securities in California under the Corporate Securities Law of 1968 (Cal. Corp. Code §§ 25000-25707) (CSL).
According to the Commissioner, Cryptos OTC Trading Platform Limited, doing business as COTP (COTP), has always been a Colorado limited liability company with a principal place of business at 6547 North Academy Boulevard, #2266, Colorado Springs, Colorado 80918, and a mailing address at 18351 Colima Road, #2896, Rowland Heights, California 91748, and operated the websites www.cotps.com and www.cotps.net.
The commissioner noted, “Beginning at least as early as 2022, COTP offered and sold securities in the form of investment contracts in California through general solicitations on its website. COTP referred to these investment contracts as “Investments.”
“COTP held itself out as a cryptocurrency trading platform. The purported purpose of the securities offerings was for COTP to use investor funds to engage in cryptocurrency trading, which in turn would generate returns for investors who purchased Investments.
D-R-Cryptos-OTC-Trading-Platform-Limited.pdf
“COTP’s Investments promised to pay a daily rate of return of approximately 3% to investors. The Investments were publicly available to investors in California via COTP’s website: www.cotps.com.
“After investors created their accounts on the COTP website, investors could log into their account using their username and password to monitor their purported balance and returns, deposit funds, and request withdrawals.
“COTP facilitated deposits and withdrawals using crypto assets, including Tether (USDT).
“COTP also had a referral program that operated in the manner of a pyramid scheme.”
The Commissioner further noted that the referral programme promised to pay investors to recruit new investors.
According to this referral programme, “Investors would be paid a commission based on the amount of funds deposited by the investors that they recruited.
“Investors would also be paid additional commissions when the investors that they recruited, in turn, recruited new investors.
“Investors seeking to take advantage of COTP’s referral program created and posted videos to YouTube and posted content on other social media websites to recruit others to invest in COTP.
“In fact, COTP was luring investors into what is known as a High Yield Investment Program (HYIP). HYIPs are unregistered investments typically run by unlicensed individuals – and are often frauds.
“The hallmark of an HYIP scam is the promise of high returns on an annual (or even monthly, weekly, or daily) basis at little or no risk to the investor.”
The Commissioner stated, “On or around May 13, 2022, COTP stopped honoring investor withdrawal requests, claiming that COTP was experiencing technical issues and that COTP would resolve the issues in a matter of days.
“COTP’s promises to resolve the purported withdrawal issues were false and COTP continued to prevent investors from withdrawing funds.
“On or around May 23, 2022, COTP represented to investors that its website had been hacked and that investors would be unable to access their funds for an additional three to five weeks.
“Within the following days, COTP stopped operating its website, leaving investors unable to access or withdraw their funds.
“To date, investors have not received their principal investments or their promised returns. COTP has ceased communicating with investors.
“The Investments offered by COTP were securities that were neither qualified nor exempt from the qualification requirement under the CSL.
“The Department has not issued a permit or other form of qualification authorizing COTP to sell these securities in California.”
The Commissioner threatened, “In connection with the offer or sale of these securities, COTP made material omissions to potential investors, including but not limited to the following:
“Failing to disclose that the offer or sale of its Investments was not qualified in California;
“Failing to disclose the identities of the individuals operating and/or managing COTP; and
“Failing to disclose that it used investor funds to pay purported profits to other investors, in the manner of a Ponzi scheme.”
Source: SaharaReporters
