CHARLESTON, W.Va. — A Kenyan man accused of being involved in an international conspiracy that defrauded multiple states, including West Virginia, out of millions of dollars will remain in custody pending trial, a federal judge ruled Friday.
Robert M. “Robe” Otiso, 36, of Elk River, Minn., was arrested in November and charged with mail fraud, wire fraud and conspiracy to launder money. Prosecutors believe that Otiso and his alleged co-conspirators in the U.S. and in Kenya tricked state governments into diverting large payments into accounts bearing names that closely resembled those of actual vendors.
Last month, Angela Chegge-Kraszeski, a Kenyan woman living in North Carolina, admitted that she followed instructions e-mailed from Kenya to incorporate companies such as “Deloite” Consulting Corp. and “Unisyss” Corp., deliberate misspellings of real companies Deloitte Consulting LLC and Unisys Corp. She then mailed forms that instructed state governments to direct payments to the fake firms instead of the real ones, she said.
Otiso allegedly helped Chegge-Kraszeski open bank accounts under the names of the bogus firms in Minnesota. Money from those accounts was later wired to Kenya.
Jack Tinney, Otiso’s defense attorney, asked U.S. District Judge John T. Copenhaver Jr. to set bond so that Otiso could return home to Minnesota and be with his wife and 2-year-old child while awaiting trial.
Otiso has lived in Minnesota for 10 years, where he is employed and has a mortgage on his home, Tinney said.
“Mr. Otiso has far more ties to his communities than many, many of the American defendants who appear before this court,” he said.
Chegge-Kraszeski had been indicted in May 2009, and the case was well known within the Kenyan community in the U.S., he said. Since then, Otiso traveled to Kenya for his grandfather’s funeral in October, but voluntarily returned to the U.S., Tinney said.
“Mr. Otiso had ample opportunity, if that was his proclivity, to flee the U.S.,” he said.
Assistant U.S. Attorney Susan Robinson countered that Otiso had put a down payment on property in Kenya during his October visit, and had experience creating fraudulent documents and fake IDs. In addition, the case involves significant amounts of money that is still missing, she said.
In a recent court filing, Robinson put the figure at more than $677,000.
During Friday’s hearing, Secret Service Special Agent Seth Summers testified that he debriefed Chegge-Kraszeski after her guilty plea.
She said that Otiso, whom she only knew as “Robe,” picked her up at the airport during her first trip to Minneapolis in January 2009, Summers said. Otiso also provided her with a Brooklyn Park, Minn., address, which is where checks for the bank accounts were to be sent, he said.
Chegge-Kraszeski identified “Robe” in photos taken from surveillance at an ATM in Minnesota, Summers said.
“They needed some transactions on the account to make it look like a legitimate account,” he said.
After Otiso was arrested in November, he was interview by IRS Special Agent Matthew Schommer, and admitted that he accompanied Chegge-Kraszeski when she opened the accounts, he said. He also told Schommer that he knew she was using a fake passport, Summers said.
Otiso also acknowledged that he was going to get a cut of the stolen money, he said.
Tinney submitted a letter from a lawyer in Nairobi that purportedly indicated that Otiso’s real-estate deal had been voided because he failed to make an additional payment in December.
Copenhaver found that Otiso poses a flight risk, and ordered him held without bond pending trial. Although Otiso’s wife and infant child live in Minnesota, she is facing deportation after federal agents discovered she had overstayed a student visa and was using a fake Social Security card, he said.
The amount Otiso intended to pay for the Kenyan property — 700,000 Kenyan shillings — is the equivalent of roughly $9,500, he said.
In addition to West Virginia, Chegge-Kraszeski set up dummy corporations and bank accounts that targeted the state governments of Kansas and Florida, according to a stipulation of facts entered as part of her plea agreement.
According to the November indictment, before officials caught on, the scheme netted $919,916 from West Virginia, with an additional $1,288,037 stolen from Massachusetts, $869,546 from Kansas and $301,571 from Ohio.
Chegge-Kraszeski faces up to 10 years in prison when she is sentenced on May 11.
Otiso and his alleged co-conspirators — Michael M. “Mikie” Ochenge, 33, Paramena J. Shikanda, 35, Collins A. Masese, 20, and Albert E. Gunga, 30, Kenyan nationals who live in Minneapolis — are scheduled to go to trial on May 24.
Reach Andrew Clevenger at acleven…@wvgazette.com or 304-348-1723.
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