Binance Exec Evades Nigerian Tax Case After Fiery Hearing

Binance’s financial crime compliance chief, Tigran Gambaryan, eludes tax evasion charges in Nigeria for now.

Tigran Gambaryan is so angry his head is steaming.
Created by Gabor Kovacs from DailyCoin
  • Nigerian prosecutors have failed to successfully arraign Binance executive Tigran Gambaryan for tax evasion charges after two attempts.
  • The recent failure follows a heated court hearing that hinged on whether authorities could serve Binance through Gambaryan.
  • Gambaryan remains remanded in an infamous Nigerian prison amid ongoing proceedings in a separate money laundering case.

On Friday, April 19, 39-year-old Tigran Gambaryan looked solemn and uneasy as he stood in the witness box of a courtroom in the Nigerian Federal High Court Abuja. Often itching his forehead and shifting his weight, the Binance financial crime compliance chief switched his gaze between the judge and the attorneys who were set to duke it out to decide whether he could be prosecuted for the tax evasion charges brought against Binance, himself, and his colleague Nadeem Anjarwalla.

The Binance executive was initially supposed to be arraigned on April 4. However, the case was unable to move forward as Nigeria’s Federal Inland Revenue Service (FIRS) disclosed that they were inexplicably unable to serve Gambaryan, who had been in Nigerian custody for over a month at the time, forcing the court to adjourn till Friday, April 19.

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On Friday, April 19, the case came up again as scheduled. Still, the FIRS would again fail to arraign the Binance executive as they were met with significant resistance from the defense in a heated court hearing observed by DailyCoin.

Noticeable Absentees 

The pew on Friday was packed with lawyers, journalists, and what appeared to be an emissary of the U.S. consulate. Despite these numbers, there were noticeable absences.

As with the previous hearing on the matter, there were no representatives for Binance and Nadeem Anjarwalla. These absences, and the proper way to serve the absent parties, would form the crux of the contention in the hearing.

Tensions Fly in the Gambaryan Hearing 

In light of the absences of representatives for Binance and Anjarwalla, the FIRS had planned to serve Gambaryan on their behalf. The plot came as the judge presiding over the case, Justice Emeka Nwite, had allowed the Economic and Financial Crimes Commission (EFCC) to serve the Binance executive on behalf of the exchange in a related case on money laundering.

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However, the FIRS’ effort to employ this same tactic was, met with strong resistance from the defense.

Gambaryan’s lawyer, Chukwuka Ikwuazom, SAN, Head of Tax and Partner at Aluko & Oyebode, contended that serving the Binance executive on behalf of the exchange or Anjarwalla did not amount to proper service as enshrined in Section 126 of the Administration of Criminal Justice Act (ACJA) 2015. The section provides that when a court issues a summons to a person outside its jurisdiction, a duplicate has to be sent to a court in the jurisdiction where they work or reside.

The attorney contended that till proper service was done in accordance with this provision, the court could not assume jurisdiction over the matter.

Ikwuazom further asserted that in the EFCC case, the court had wrongfully applied Section 123 of ACJA 2015 to compel Gambaryan to be served and take a plea on behalf of Binance. The cited section offers provisions on how service can be effected on a corporation. 

Among other options, the section provides that service can be effected on a corporation by delivering it to a partner, a director, a secretary, or a chief agent within the jurisdiction. Ikwuazom argued that the court had mischaracterized Gambaryan as a chief agent in the EFCC case.

“My submission in that regard is that a person who is ordinarily not resident within the jurisdiction of court can not be a chief agent of another person within that jurisdiction,” he asserted.

Responding to the defense’s case, FIRS lawyer Moses Ideho disputed the claim that Gambaryan could not be held as a chief agent of Binance.

“He [Gambaryan] is the chief financial crime compliance officer of the first defendant!” he retorted.

Ideho further suggested that should the court disagree, there were specific provisions under section 49 of the FIRS Establishment Act of 2007 and section 37 of the Value Added Tax (VAT) Act of 1993 that supported the service of Gambaryan on behalf of Binance. Both sections provide that when a firm contravenes tax laws enshrined in the act, all officers of the firm can be convicted with the firm unless they can prove that the actions took place without their knowledge. According to Ideho, these provisions should override section 126 of ACJA 2015 in the case. 

The attorney then ignited a powder keg by launching a tirade about Binance’s model of operating without a known headquarters. Ideho alleged that the firm had fled from its first base in China to Japan and Malta after “regulatory infractions” there.

These submissions attracted a strong objection from the defense as Ikwuazom took issue with Ideho’s attempt to introduce what he described as “false” facts to the case through oral submission when he was not a witness to the case. 

Asking the court to disregard Ideho’s factual submissions, Ikwuazom asserted that the prosecution should file a formal application if there is any reason why they can not comply with section 126 of ACJA 2015 instead of trying to introduce facts through oral submissions in court.

Ikwuazom further disputed Ideho’s arguments that section 49 of the FIRS Establishment Act of 2007 and section 37 of the Value Added Tax (VAT) Act of 1993 allowed for the service of Gambaryan on behalf of Binance. 

The defense attorney pointed out that those provisions only applied when the firm itself had already been found guilty and not to service of charge. He argued that relying on those provisions at this stage would amount to pre-judging the case.

Ikwuazom called for the discontinuation of proceedings to allow for proper service of Binance and Anjarwalla or till the FIRS amended their charge.

Acquiescing this request, Justice Nwite adjourned the proceedings till May 17.

Gambaryan Remains in Prison 

Following Friday’s heated hearing, Gambaryan was escorted out of the court by officers of the Nigerian Correctional Service back to the infamous Kuje prison, where he has been remanded for trial on money laundering charges from the EFCC.

On Thursday, April 18, the court adjourned a hearing on Gambaryan’s bail application to May 22 as the EFCC asserted that they needed time to reply to the defense’s response to their objection to the defendant’s bail application.

On the Flipside 

  • While the tax evasion charges are pending, Gambaryan is still set to face trial for money laundering charges from the EFCC.
  • Binance maintains that it is in negotiations with Nigerian authorities to secure the release of Gambaryan.

Why This Matters 

So far, things have gone from bad to worse for Gambaryan, who has spent nearly two months in Nigerian detention for honoring an invitation to negotiate the resolution of issues between authorities and his employers. The recent court hearing marks the first real win for the Binance executive since the start of this debacle.

Read these for more information on Gambaryan’s Nigerian ordeal:
Binance Exec’s Nigeria Detention Extends as Bail Hearing Stalls
Binance Exec’s Nigerian Ordeal Worsens, Sent to Infamous Prison

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Okoya David

David Okoya is a crypto news reporter at DailyCoin based in Nigeria. He covers various topics related to the cryptocurrency industry, including exchanges, regulations, and price movements, and strives to bring fresh angles to breaking news. With experience as a freelance crypto news writer, David upholds the highest journalistic standards, telling complete stories and answering lingering questions whenever possible.