How Kenyan scammers targeted Uncle Sam

• Using slightly altered names of Deloitte Consulting, Unisys and other respected American firms, Kenyan crooks set out to defraud American states from Nairobi until things went wrong

To many Kenyans, America is the land of opportunity— the modern day version of Canaan. It is the place where money flows down golden streets.

The faraway land, whose name is synonymous with wealth and might, attracts millions of immigrants every year, droves of men and women flown across oceans by a desire to live the American Dream, to kiss want goodbye and usher in a new era of plentiful existence.

But this is also the land of one of the most efficient judicial systems in the world, and it is this last characteristic of the Promised Land of our times that landed six Kenyans in trouble last week after they were found guilty of trying to filch Sh272 million ($3.4 million) from state agencies across the country.

Angella Muthoni Chegge-Kraszeski, 34, wept in a Federal Court in the State of West Virginia as she was handed her sentence, but the judge was untouched.

“It’s fair to say you were the face of the conspiracy in the United States, at least to the extent that it was successful,” Judge John Copenhaver told Muthoni. “Many times, you could have withdrawn from it, but you didn’t.”

Overseers in Kenya

At an earlier hearing, Muthoni had told the same judge: “I did not know specifically what I had agreed to do, but I knew that it was not legal.”

A US Financial Fraud Enforcement Task Force, established by President Barack Obama recovered most of the funds that the Kenyan scammers had sought to swindle from the states of West Virginia, Massachusetts, Kansas, Ohio and, apparently, Florida and Utah as well.

But some $772,000 (Sh62 million) did make its way to the scheme’s overseers in Kenya. It may never be recovered.

Federal prosecutor Booth Goodwin hopes Kenyan authorities will act on leads and track down the scam’s masterminds. “We will continue to pursue more of the criminals who helped defraud the state,” says Mr Goodwin.

Muthoni apologised to the court on Tuesday for her crimes, saying: “I have brought so much shame... so much shame.” And, for her crimes, she will likely be deported from the United States after she completes the 20 remaining months of her time in prison, which began following her arrest in May 2009.

The five other Kenyans previously sentenced for their roles in the conspiracy also face deportation, including Paramena Shikanda, 36, who had been granted political asylum in the United States.

Two of the other fraudsters — Michael Mokua Ochenge, 33, and Collins Keanche Masese, 21 — were in violation of their US residency terms at the time of their arrests.

Chegge-Krazseski’s punishment is not limited to jail time and, due to the stain on her reputation, her attorney, Mary Lou Newberger, told the court on Tuesday: “In a very practical sense, it means the end of her marriage.”

The unemployed Kenyan’s 15-year-old son, who lives in Kenya, had been approved for a US visa, which has since been revoked.

Muthoni’s American husband, who attended Tuesday’s sentencing, will remain in the US, according to a report in the Charleston (West Virginia) Gazette.

Attorney Newberger raised concerns about her client’s safety once she is returned to Kenya, and pointed out that Muthoni had cooperated extensively with US prosecutors who cracked a conspiracy run by individuals in Kenya who have been identified only as ‘Jimmy’ and ‘Elvo’.

These two recruited Muthoni to organise the scam in the United States when she visited her son and mother in Kenya in December 2008.

She had her photograph taken at that time, with the ringleaders in Kenya using it in a forged South African passport under the name of Christina Ann Clay. The phony passport was then sent by Federal Express to Muthoni’s home in the state of North Carolina, according to court documents.

She then used the passport as identification in filing papers to establish four dummy corporations with names almost identical to those of well-known US companies that had provided services for the targeted states.

The fake firms were called Unisyss (derived from Unisys), Deloite Consulting (rather than Deloitte Consulting), Acenture (actual name: Accenture) and Electronic Data System (instead of Electronic Data Systems). Muthoni began working with the five other Kenyans living in the United States to carry out a scheme that US prosecutor Goodwin described as “rather ingenious”.

The ringleaders in Kenya put Muthoni in touch with Robert Menge Otiso, a 36-year-old living in Minnesota, whom she knew only as ‘Robe’. Muthoni began travelling to Minnesota after banks in her own state of North Carolina would not let her open fake accounts using only her phony South African passport. Otiso helped her open accounts in the names of the dummy companies at TCF Bank in Minnesota.

Otiso also recruited Ochenge, who in turn enlisted Shikanda. Albert Gunga, 31, another Kenyan living lawfully in Minnesota, also assisted with banking aspects of the fraud. Court documents hint that the Kenyans may have been aided by an unnamed friend of Shikanda’s who worked at TCF Bank.

Following instructions from Kenya, Muthoni and the other Kenyan crooks used forms available on the Internet to dupe officials in the various states to begin making electronic deposits to the accounts at TCF Bank. The actual companies were owed payments for services they had performed for the states.

West Virginia, for example, wired a payment of $919,916 (Sh73 million) to the ‘Deloite’ account that the state actually intended to go to Deloitte.

In March 2009, the Kenyans began withdrawing money from that phony account in a series of 12 transactions. Nine of them were wire transfers — all for sums of roughly Sh7 million — to accounts in Nairobi in the names of phony enterprises. The accounts had been established at CFC Stanbic Bank; Standard Chartered Bank, Kenya; Diamond Trust (K) and NIC Bank.

Using her alias of Christina Ann Clay, Muthoni also withdrew Sh5 million from one of her TCF Bank accounts that was used to make payments of Sh3 million to Gunga and Sh2 million to ‘James Mwangi’, an alias that had been created for Masese through a false California driver’s licence that Ochenge had helped Masese obtain.

Muthoni also wrote cheques totalling about Sh2.8 million from TCF accounts in the name of Christina Clay, yet she told the court some months ago that she did not expect to receive financial remuneration for her role in the conspiracy, and indicated she had made an arrangement for another form of compensation, which was not specified in the court proceedings.

According to the Associated Press, the Kenyan scammers apparently milked West Virginia out of an additional Sh8 million and tried to divert some Sh17 million from the state of Utah. Those sums are not specified in the charges on which the six Kenyans were convicted, but they would bring the scope of the attempted fraud to nearly Sh5.6 million.

A conspiracy of this sort could not have been hatched by Kenyans and was probably the work of Nigerians, the father of convicted scammer Collins Masese told the AP after the sentencing of his son.

Noting that the six Kenyans come from more than one ethnic community, Thomas Masese reasoned that Kenyan plotters would have likely been members of only one community— and would have recruited only its members. The elder Masese offered no proof for his contentions, and there was no indication during court proceedings that Nigerians had been involved.

In fact, Judge Copenhaver said during a recent court session that “virtually all the shots were called from Kenya, with elaborate instructions and falsified documents to enable the conspiracy at every turn”.

Shikanda’s defence attorney took the same position in remarks at that court session.

“All of these people, all of them, were merely servants of the puppet masters in Kenya who manipulated them from the safety of Kenya,” attorney Gary Collias declared, according to an AP report.

Four of the six Kenyans pleaded guilty to conspiring to launder the proceeds of the fraud. Ochenge received a four-year term; Gunga and Shikanda each got 10 months; and Masese was sentenced to the nine months he had already served while awaiting disposition of his case.

Otiso, who held a job at the Hennepin County Medical Center in Minnesota, pleaded guilty to a bigger role in the scam and was sentenced to six years in prison.

The comparatively light sentence given to Muthoni, despite her pivotal role in the fraud, reflected the extensive assistance she provided US prosecutors. Muthoni helped identify or explain the roles of the five other Kenyans in the case.

And, according to an AP report on Tuesday, she had also given US prosecutors the e-mail addresses used by the scam’s central figures in Kenya.

US prosecutor Goodwin says he does not think it is likely that the convicted Kenyans will be able to fulfil orders of restitution to the agencies they swindled.