The FBI has identified Izunna Okonkwo, a celebrated Pastel tech startup co-founder who made the highly coveted Forbes 30-under-30 list in 2023, as a person of interest and co-conspirator in an insider trading and money laundering scheme that generated $41 million in illegal profit from several companies within five years, court filings reviewed by Peoples Gazette showed.
Mr Okonkwo, who took graduate studies at Stanford University, was buying stocks and securities based on the material non-public information shared by investment banker Gyunho Justin Kim with his American-Pakistani friend, Saad Shoukat.
Messrs Kim and Shoukat were good friends who met in 2018 while interning at different multinational establishments. The friendship devolved into criminal activity as Mr Kim shared crucial MNPI about upcoming acquisitions with Mr Shoukat, who then tipped Mr Okonkwo and other co-conspirators. The Nigerian and Pakistani were friends who met in college.
Mr Okonkwo, 30, knew Mr Kim was the source of the illicit gains and eventually suggested facilitating a new employment for him after years of raking in millions from the tip-offs.
Mr Kim worked at Citibank Investment Group’s division in San Francisco and was privy to confidential financial intelligence, as Citibank often acted as a middleman, providing financial advisory when negotiations for company acquisitions began.
“Okonkwo knew that KIM worked at the Investment Bank, and Saad Shoukat and Okonkwo communicated on an encrypted messaging app about the impending Reata deal before it was public,” FBI Special Agent Antony Belitti wrote in a complaint to the U.S. District Court for New Jersey on November 24. “Saad Shoukat exchanged messages with Okonkwo about helping Kim find a new job.”
Mr Shoukat brokered a deal with Mr Okonkwo to use his brokerage accounts to trade. The deal would fetch the Nigerian tech boss 50 per cent of all ill-gotten proceeds. Mr Okonkwo also cultivated his own personal relationship with the Citibank snitch to secure continued access to insider information.
“Saad Shoukat and Okonkwo drafted a written agreement in which Okonkwo allowed Saad Shoukat to access and make trades through Okonkwo’s accounts in exchange for Okonkwo getting approximately 50% of trading profits,” the court filings stated.
When Gilead hired Citibank to broker a deal for the acquisition of Immunomedics (a biopharmaceutical company that manufactures a breast cancer drug) in 2020, Mr Kim quickly notified Mr Shoukat, who then passed the information to Mr Okonkwo and other co-conspirators to buy large stocks before the deal would be finalised and announced.
Mr Kim learnt of the acquisition on June 23, 2020. By July 2, Mr Okonkwo, Mr Shoukat, and additional co-conspirators began accumulating Immunomedics shares ahead of the public announcement.
The FBI traced logins to Mr Okonkwo’s brokerage account to an address in London, the same residence where the Nigerian tech boss had purchased a home and where Mr Shoukat stayed while conducting illicit trades.
“Around the same time, there were logins to Saad Shoukat’s account from the same IP address in the United Kingdom from which there were logins to Okonkwo’s account,” an FBI special agent submitted to the district court.
By September 2020, Gilead announced it had acquired Immunomedics for $21 billion. Mr Shoukat, Mr Kim, and others made $4.9 million from the takeover.
The FBI intercepted messages on an encrypted messaging app showing exchanges between Mr Okonkwo and a friend about buying Immunomedics stocks in August 2020.
The buyout landed Mr Okonkwo $2.3 million while Mr Okonkwo’s relative got $465,299.
When Mr Kim was added to the team leading points on Amgen’s acquisition of Five Prime on January 27, 2022, Mr Okonkwo opened a brokerage account in Five Prime the following day, buying stocks at $15 per share.
Amgen bought Five Prime for $1.9 billion at $38 per share. Mr Okonkwo illegally cornered $166,000 from the deal. In a similar GSK buyout of Sierra, Mr Okonkwo pocketed some $370,000, and his relative illegally gained $41,000.
Pfizer acquired GBT for $5.4 billion in a deal that leapfrogged Mr Okonkwo’s profit by $3.5 million in August 2022. His relative, a resident of Atlanta, Georgia, netted $617,727. Mr Shoukat also made $5 million.
Days after cashing out $3.5 million, Mr Okonkwo’s startup Pastel publicly announced that it had raised $5.5 million in seed funding.
The Nigerian money-laundering suspect co-founded Pastel in 2021 with fellow Stanford mates Olamide Oladeji and Abuzar Royesh. A 2023 Forbes article celebrated Mr Okonkwo and his partners as rising African business executives under 30, reporting that their company had raised over $6 million and helped 120 businesses use offline software tools to manage their operations.
Mr Okonkwo received $4.7 million in July 2023 after Biogen finalised the Reata takeover. The Pastel co-founder made another $2.9 million following AbbVie’s acquisition of Immonogen in November 2023.
“Over the course of the insider trading scheme, the insider trading profits of Saad Shoukat, Arham Shoukat, Shahwaiz Shoukat, Okonkwo, and Khan combined to total at least $41 million,” federal prosecutors told U.S. Magistrate Judge Michael A. Hammer.
Already, Mr Kim was facing six counts of insider trading, wire fraud, and money laundering for violating Citibank’s confidentiality regulation in leaking inside information to associates to trade illegally.
It was not immediately clear whether or not Mr Okonkwo had been taken into custody. The indictment against Mr Kim identified Mr Okonkwo as a dual Nigerian-American citizen who has been running his business from Nigeria and Atlanta.
Mr Okonkwo’s online listing showed he has been running Pastel out of a Nigerian tech neighbourhood in Yaba, Lagos. He grew up in the Atlanta area and appeared to have used an office space there while setting up Pastel in 2022.
Mr Okonkwo did not immediately return a request seeking comments about the FBI’s case against him. A spokesperson for Pastel, formerly Sabi Cash, declined comments on Friday morning.
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