Five Indicted for Their Roles in a Multi-Million Dollar Fraud Scheme
State of West Virginia Among Other States Scammed
|U.S. Attorney’s Office November 17, 2009|
CHARLESTON, WV—Charles T. Miller, United States Attorney for the Southern District of West Virginia, announced today the unsealing of an eight count indictment charging five individuals with violations of federal law associated with a multi-million dollar, international fraud scheme.
The indictment, returned on November 10, 2009, alleges that Micheal M. Ochenge, 33, of Minneapolis, Minnesota; Robert M. Otiso, 36, of Elk River, Minnesota; Paramena J. Shikanda, 35, also of Minneapolis, Minnesota; and other known and unknown co-conspirators, located in Kenya and in the United States, devised a vendor payment diversion scheme by which they obtained and attempted to obtain millions of dollars from the state of West Virginia and other states and their legitimate vendors.
As further alleged in the indictment, known and unknown co-conspirators, believed to be primarily located in Kenya, targeted vendors of the state of West Virginia and other states who received significant revenues from the states on a routine basis. In order to execute their scheme, coconspirators located in the United States filed documents creating dummy entities with names similar to the legitimate vendors. Fraudulent bank accounts were then created in the names of the targeted vendors. With information acquired by unknown co-conspirators through the Internet and otherwise, direct deposit authorization forms were completed for the targeted vendors, including: Deloitte Consulting LLP; Unisys Corporation; Accenture LLP; and Electronic Data Systems, Inc. The authorization forms were then mailed to the states along with the voided starter checks on the fraudulent accounts. The direct deposit authorization forms purported to authorize the states to send electronic payments for goods and services to the targeted vendors. The fraudulently submitted forms were intended to and did cause several states to route payments to the fraudulent bank accounts established by the defendants and their co-conspirators. As a result, in excess of $3,379,000 was fraudulently diverted from the state of West Virginia and other states to accounts controlled by the defendants and their co-conspirators.
The Indictment further alleges that Ochenge, Otiso, and Shikanda, along with Collins A. Masese, 20, and Albert E. Gunga, 30, both of Minneapolis, Minnesota, conspired together and with other known and unknown co-conspirators to launder the proceeds of the fraud, including approximately $770,000 which was wired to accounts in Kenya.
Michael Ochenge, Otiso, and Shikanda, named in all eight counts of the indictment, are charged with conspiracy to commit mail and wire fraud, three counts of mail fraud, three counts of wire fraud, and conspiracy to commit money laundering. If convicted of all charges, each faces a statutory maximum sentence of 160 years in prison, an order of restitution and forfeiture.
The indictment charges Masese and Gunga with conspiracy to commit money laundering. If convicted, they face a statutory maximum sentence of 20 years in prison, an order of restitution and forfeiture.
Angella M. Chegge-Kraszeski, named as an unindicted co-conspirator in the indictment unsealed today, was previously charged for her role in the money laundering conspiracy on May 20, 2009. She has been ordered detained pending further proceedings.
The investigation and arrests of the defendants represent a collaborative effort of the following agencies: United States Secret Service; Internal Revenue Service, Criminal Investigation Division; United States Postal Service; United States Immigration and Customs Enforcement Service; West Virginia Commission on Special Investigations; Department of Defense, Defense Criminal Investigative Service; Federal Bureau of Investigations, Minneapolis Field Office; Wright County Sheriff's Office; Minneapolis Police Department; Minnesota Financial Crimes Task Force; Minnesota Bureau of Criminal Apprehension; Edina Police Department; Elk River Police Department; and the United States Attorney's Office for the District of Minnesota.
Assistant United States Attorney Susan M. Robinson is handling the prosecution.
*PLEASE NOTE: An indictment is merely a formal accusation, it is not proof of guilt; and the defendants are presumed innocent until and unless they are found guilty.