Two Kenyans admit stealing Sh270m from schools in Dallas, Fort Worth

TEXAS

Two Kenyans have pleaded guilty to defrauding schools in two districts in the United States of $3.1 million (Sh270 million).

Florine Mati and David Mbugua, who run four tutoring companies in the Dallas and Fort Worth areas, pleaded guilty to the charge on Tuesday.

They admitted to billing the money to schools in the two districts for teaching services that they never rendered.

The tutoring companies, based in Hurst, Texas, had promised to help poor kids from schools in Dallas to access extra tuition.

Mati, 42, and Mbugua, 43, who appeared in orange prison jumpsuits and with their ankles in shackles before US magistrate Judge Paul D. Stinckey, pleaded guilty to one count of conspiracy to make false, fictitious or fraudulent claims.

They have been in federal custody since their arrest in March this year. They were detained after the court determined that they were flight risks.

They each face five years in jail and a $250,000 (Sh21.75 million) fine, and they must refund the stolen money.

MISLEAD

According to court files from the US attorney's office, the Kenyan natives formed four separate companies between 2011 and 2012 — Diverse Learning, Avenue Academy, Boost Academy and Wise Links (also known as Champions Mind) — to hide their true ownership and mislead the Texas Education Agency into believing that the firms were unrelated.

According to the court documents, the accused billed the Dallas and Fort Worth school districts about $4.1 million (Sh356 million), out of which only $1 million (Sh87 million) in services had been provided.

The Kenyans and their employees enrolled hundreds of students online from their offices and charged $100 (Sh8,700) per student.

Mati, who is a former schoolteacher, used her online access to the Dallas District network to find students to enrol.

SELL PROPERTY

She also went door to door, accompanied by her co-accused and employees, to seek students to enrol.

Mati and Mbugua admitted that they sent some of the proceeds to Kenya, where they bought property.

Mati wired $783,625 (Sh68.2 million) of the company's proceeds to her family members in Nairobi.

Mbugua admitted wiring $85,000 (Sh7.4 million) to himself and his family in Kenya, and the money was used to build a house.

As part of their restitution, they have agreed to work with the US government to sell the property in Kenya and turn over any proceeds.

The four companies were getting federal education funds under the No Child Left Behind federal law, which made it possible for students from poor backgrounds in public schools to access free extra tuition.

They will be sentenced on February 20, 2015.