5 indicted in scam targeting agencies in 4 states
CHARLESTON, W.Va. — A federal grand jury in West Virginia has linked five more people to an international scam that allegedly tricked government agencies in several states into paying at least $3.3 million to bogus companies with names that sounded like legitimate firms.
The charges unsealed Tuesday implicate Minnesota residents Michael M. “Mikie” Ochenge, 33; Robert M. “Robe” Otiso, 36; Paramena J. “Joseph” Shikanda, 35; Albert E. Gunga, 30; and Collins A. Masese, 20.
All were born in Kenya and live in or near Minneapolis, prosecutors said. All but Masese were in custody Tuesday, and scheduled to appear before a U.S. magistrate judge in Minneapolis.
The felony counts allege Ochenge, Otiso and Shikanda helped devise a scheme that exploited increasing reliance on the Internet by both the public and private sectors to conduct business.
Posing as businesses that provide services to state agencies, the conspirators tricked officials between March and July into giving them money owed to the legitimate vendors, the indictment says.
They managed to scam $1.2 million from Massachusetts, $919,000 from West Virginia, $869,000 from Kansas and $301,000 from Ohio, the indictment says. The money had been intended for either Deloitte Consulting or Accenture Corp.
Along with Gunga and Masese, Ochenge, Otiso and Shikanda allegedly conspired to launder the proceeds, with $770,000 wired to Kenya. Most of those funds had come from West Virginia. Officials in the other three states identified in the indictment report that they’ve since recovered their money.
The indictment also repeatedly mentions Angella Muthoni Chegge-Kraszeski. The Kenyan-born North Carolina resident, married to a U.S. citizen, was indicted in May in connection with the scheme. Prosecutors on Tuesday requested a guilty plea hearing for the 33-year-old, indicating that she has been cooperating with them.
Chegge-Kraszeski allegedly registered corporations with names similar to the legitimate firms — spelling them as “Deloite” and “Acenture.” At times aided by Ochenge, Otiso and Shikanda, she set up bank accounts in Minnesota and North Carolina, the charges allege, using a false South African passport that identified her as “Christina Ann Clay.”
Investigators allege computers in Kenya repeatedly accessed state government Web sites to glean information for the scheme. The conspirators also received packages from there containing the bogus passport and two batches of sealed, pre-addressed envelopes later placed in the U.S. mail. Two of the packages were routed through the United Arab Emirates.
But the conspiracy may extend beyond what’s alleged in the two indictments. West Virginia was hit by a similar scam that netted around $1 million during the same period. Utah officials reported earlier in the year that the same sort of fraud attack diverted $2.5 million. Chegge-Kraszeski was arrested in May after Florida thwarted a ploy attempted there.
Masese relied on phony California and New Jersey drivers licenses to help Gunga and the others launder the defrauded funds, the indictment alleges. Ochenge, Otiso and Shikanda face all eight counts in the indictment unsealed Tuesday, which includes mail fraud and wire fraud charges in addition to conspiracy and money laundering. Prosecutors also seek to have assets forfeited by any defendants convicted to recoup the scammed funds.
Massachusetts Comptroller Martin Benison said his state discovered the ruse within a few days, and with a bank’s help recovered its funds. His office has since audited for any other cases of fraud, and hired an outside consultant.
“We’ve done extensive work to improve our procedures to put in additional checks and balances,” Benison said.
Ohio Budget Director Pari Sabety said her state had added safeguards to its process after she learned about the scam in May from colleagues in other states — but was still duped.
“It’s something that we’ve dealt with,” Sabety said. “We’ve taken the measures that we think we need to safeguard the system against future incidents.”
An array of law enforcement have helped develop the case, from local police in Minneapolis to the FBI, Secret Service and other federal agencies. Investigators in West Virginia, North Carolina and Minnesota have also taken part.
Associated Press Staff Writer John Hanna in Topeka, Stephen Majors in Columbus and Steve LeBlanc in Boston contributed to this report.
Related News
Haryana to register recruiting agentsNovember 9th, 2009 CHANDIGARH - In a bid to avoid unscrupulous agents, the Haryana government has made it mandatory for the recruiting agencies and agents, who are facilitating job seekers to get an overseas job, to get themselves registered. "We have advised all recruiting agencies to follow the provisions of the Emigration Act, 1983.
Florida attorney general's office sues 2 companies for alleged mortgage scamsNovember 9th, 2009 Fla. AG sues 2 companies in alleged mortgage scamsTALLAHASSEE, Fla. — The state is suing two central Florida companies for allegedly scamming homeowners trying to rescue their properties from foreclosure.
Star witness in Petters fraud case says despair of finding way out of scam drove her to fedsNovember 3rd, 2009 Petters aide weeps as she recalls going to fedsST. PAUL, Minn. — The star prosecution witness in the fraud trial of Minnesota businessman Tom Petters wept Tuesday as she explained her decision to go to federal investigators.
New Jersey telemarketer admits role in Internet scam that feds estimate may have cost up $75MOctober 30th, 2009 NJ telemarketer admits role in big Internet scamPHILADELPHIA — A former telemarketing company official admitted Friday that he scammed small businesses out of millions of dollars by duping them into paying for Internet services without their consent. Neal Saferstein, 36, of Mount Laurel, N.J., pleaded guilty Friday to mail fraud and tax-evasion charges.
Ga. grand jury won't indict man accused of stalking Miley Cyrus, cites insufficient evidenceOctober 28th, 2009 Ga. grand jury won't indict accused Cyrus stalkerSAVANNAH, Ga. — A grand jury on Wednesday refused to indict a 53-year-old man jailed since August on charges that he tried to stalk Miley Cyrus as the teen star filmed a movie on the Georgia coast.
Amitabh, Amar Singh accused of Rs.500 crore scamOctober 16th, 2009 LUCKNOW - Bollywood mega star Amitabh Bachchan and Samajwadi Party general secretary Amar Singh have been accused of involvement in a Rs.500 crore money laundering scam, according to a complaint lodged with Kanpur police. Lodged by local businessman Shivkant Tripathi late Thursday, the first information report has charged the two well-known faces, who are close friends, of being involved in a major fraud through money laundering.
Man gets 7 years for duping Egyptian government in $7M frozen chicken scamOctober 7th, 2009 Man sentenced to 7 years in frozen chicken scamNEW ORLEANS — A man who duped the Egyptian government into paying more than $7 million for a shipment of frozen chicken he never delivered has been sentenced to seven years in prison and fined $15,000. Fifty-nine-year-old Alexander Legault pleaded guilty in July and was sentenced Wednesday by U.S.
Two-year jail for Indian Oil officialSeptember 30th, 2009 CHANDIGARH - A special Central Bureau of Investigation (CBI) court here Wednesday sentenced a former Indian Oil official to two years in jail for illegally issuing gas connections about two decades ago. According to CBI officials, the case was registered against R.C.
Vietnam officials jailed in office rental scam connected to Japan-funded road projectSeptember 25th, 2009 Vietnam officials jailed in office rental scamHANOI, Vietnam — A Vietnamese court sentenced two officials to up to three years in prison Friday for collecting $80,000 in rent from Japanese consultants but dividing it among colleagues instead of putting it in state coffers, a court official said. The embezzled rent was part of a bigger scandal over a Japan-funded road construction project that prompted Tokyo — Vietnam's biggest donor — to temporarily suspend millions of dollars in development loans in December and demand that Hanoi make more vigorous efforts to combat corruption.
Vietnam officials jailed for office rental scam in connection with Japan-funded road projectSeptember 25th, 2009 Vietnam officials jailed in for office rental scamHANOI, Vietnam — A Vietnamese court sentenced two officials to up to three years in prison Friday for collecting $80,000 in rent from Japanese consultants but dividing it among colleagues instead of putting it in state coffers, a court official said. The embezzled rent was part of a bigger scandal over a Japan-funded road construction project that prompted Tokyo — Vietnam's biggest donor — to temporarily suspend millions of dollars in development loans in December and demand that Hanoi make more vigorous efforts to combat corruption.
Feds fight to reverse trial court ruling excluding evidence against Barry BondsSeptember 17th, 2009 Feds fight for key evidence against BondsSAN FRANCISCO — Federal prosecutors are urging an appellate court to let them present critical evidence they say proves Barry Bonds knowingly used steroids. A trial court judge excluded urine samples and other evidence from the upcoming trial of the San Francisco Giants slugger, who is accused of making false statements to a grand jury and obstructing justice.
News report on Goa bulb scam now a court caseSeptember 15th, 2009 PANAJI - The Panaji bench of the Bombay High Court has taken cognisance of a newspaper report on an alleged scam in the purchase of Compact Fluorescent Lamps (CFL) worth over Rs.50 lakh (Rs.5 million) and ordered that the article be converted into a public interest litigation (PIL). The division bench comprising of Justices S.B.
Court refuses to stay scribe's trial in cash-for-query scamSeptember 15th, 2009 NEW DELHI - Declining to stay the proceedings against journalist Anirudh Bahal, who conducted a sting operation in the 2005 cash-for-query scam, the Delhi High Court exempted him from appearing in the case till further orders. Justice M.C.
SC asks Indian embassy to ensure safety of students in AustraliaSeptember 4th, 2009 NEW DELHI - The Supreme Court on Friday asked the Indian High Commissioner and Consulate General in Australia ensure the safety of Indian students and to prevent them from falling prey to fake educational institutions in that country. An apex court bench headed by Chief Justice K.G.Balakrishnan expressed concern over Indian students falling prey to fake Universities.
'Intelligence dabbling in politics affecting Pakistan' rule of law'September 1st, 2009 ISLAMABAD - A senior Pakistani official told a standing committee of the National Assembly Tuesday that the involvement of the country's intelligence agencies in the affairs of the political parties has deteriorated the law and order situation, the Online news agency reported. Federal human rights secretary Muhammad Farid Khan said the intelligence agencies are not doing their jobs and instead taking part in political affairs, resulting in the deteriorating law and order and human rights abuses in the country.
