14 DAY TRIAL // Three Kenyan nationals, who defrauded four US states of almost $3.4 million by hijacking payments meant for legit vendors, were sentenced to prison on Thursday.
According to a Department of Justice press release, Robert M. Otiso, 36, of Elk River, Minn., was sentenced to 72 months in prison for conspiracy to commit mail and wire fraud; Paramena J. Shikanda, 35, of Minneapolis, was sentenced to 46 months in prison for conspiracy to commit money laundering; and Collins K. Masese, 21, of St. Paul, Minn., was sentenced to nine months in prison for conspiracy to commit money laundering.
The three individuals, all of Kenyan nationality, were found guilty of instrumenting a fraud scheme with the purpose of stealing money from several US states.
Eventually, the defendants succeeded in diverting a total of $3.379 million from the governments of West Virginia, Kansas, Ohio and the Commonwealth of Massachusetts to their own bank accounts.
The operation involved setting up fake companies with names similar to those of large vendors like Deloitte Consulting, Unisys, Accenture or Electronic Data Systems, which provide various services to public and private institutions.
The fraudsters then sent direct deposit authorization forms to the governments of numerous states suggesting that payments be made to the bank accounts associated with the rogue companies.
Many governments realized that this was a scam, but the four previously mentioned didn't and sent money to the payment hijackers, who wired over $770,000 to Kenya.
"Today represents a victory for taxpayers. When the state itself is defrauded, we all suffer," said U.S. Attorney for the Southern District of West Virginia R. Booth Goodwin II.
"Money taken from the public treasury is money not available for schools, roads, and police and fire departments. That is why this case was such a priority for my office," he explained.
Two other defendants, Michael M. Ochenge, 33, and Albert E. Gunga, 30, both of Minneapolis, have pleaded guilty to conspiracy to commit money laundering in connection to this scheme and will be sentenced next week.