Three Kenyans sentenced in auditor scam, three more await sentencing

Robert Otiso, 36, and Angella Chegge ,34, who were the US based masterminds of the international scam.

CHARLESTON, W.Va. — Three Kenyan nationals were sentenced to prison in federal court Thursday for their roles in an international scam that tried to defraud state governments out of millions of dollars.

Robert M. “Robe” Otiso, 36, of Elk River, Minn., was sentenced to 72 months in prison by U.S. District Judge John T. Copenhaver Jr. Paramena J. Shikanda, 35, of Minneapolis, received 46 months, and Collins K. Masese, 21, of St. Paul, Minn., received nine months, which he has already served.

The scheme diverted almost $3.34 million from West Virginia, Kansas, Ohio and Massachusetts by rerouting state payments to vendors to fraudulent bank accounts set up with nearly identical names.

Authorities caught on to the scheme before most of the money left the country, but West Virginia lost more than $772,000.

The scheme initially involved only Angella Chegge-Kraszeski, a 34-year-old Kenyan woman who had settled in Raleigh, N.C. She testified during Thursday’s sentencing hearing that she had traveled to Kenya in late 2008, where she was recruited by a man she knew as Jimmy Ojwang.

Using a photo that was taken while she was in Kenya, Ojwang provided her with a fake South African passport under the name Christina Clay. She then incorporated three companies in North Carolina with names nearly identical to real vendors who provided services to state governments: Deloite Consulting Corp. instead of Deloitte Consulting LLC, Unisyss Corp. instead of Unisys Corp.

She then intended to use the articles of incorporation of the fake companies to set up bank accounts under the name of the real companies, which would allow her to redirect payments to the new bank accounts via direct deposit.

Chegge-Kraszeski said the plan hit a snag when a bank manager in North Carolina noticed the different spellings, and asked her for a second form of ID under the name of Christina Clay, which she did not have.

Her Kenyan contact told her via e-mail and phone to travel to Minneapolis, where other Kenyans would help her open dummy bank accounts.

That’s how Otiso, Shikanda and Masese became involved in the scam.

In March and April 2009, Chegge-Kraszeski traveled several times to Minnesota, first to set up fake bank accounts with the help of her co-conspirators, then to help wire money to Kenya once money arrived in one of the accounts.

During Chegge-Kraszeski’s testimony, Assistant U.S. Attorney Susan Robinson showed her a copy of an e-mail from her handler in Kenya with “WELL DONE GUYS” in the subject line after a payment of $919,916 from West Virginia intended for Deloitte Consulting arrived in a fake account.

Returning to Minnesota, Chegge-Kraszeski initiated a flurry of transfers to various banks in Nairobi between March 26 and April 1.

Overall, more than $772,000 made its way to Kenya, although bank officials got suspicious and froze the account before the conspirators could start wiring almost $1.3 million diverted from the state government of Massachusetts.

West Virginia Auditor Glen Gainer III’s office noticed the missing funds in May 2009.

Chegge-Kraszeski pleaded guilty to conspiracy to engage in illegal monetary transactions in December and agreed to cooperate with investigators.

Masese and Shikanda pleaded guilty to conspiracy to commit money laundering in April and May, respectively. Otiso pleaded guilty to conspiracy to commit mail and wire fraud in May.

Masese joined the ongoing conspiracy relatively late, in April 2009, and admitted that he used a fake California driver’s license helped set up a fake bank account that was never used.

Shikanda admitted that he accompanied Chegge-Kraszeski to a TCF Bank branch so he could introduce her to a bank employee he knew, thus subjecting the wire transfers to Kenya to less scrutiny.

Shikanda’s attorney, Gary Collias, said Thursday that Shikanda’s role in the scheme was simply to make introductions.

He read from a newspaper clipping that quoted West Virginia Auditor Glen Gainer III as saying, “These people are nothing but mules.”

“All of them were merely manipulated by puppet masters in Kenya,” Collias said.

Robinson opposed Collias’ efforts to downplay Shikanda’s role in the international scam.

“These people were not merely mules. But for their actions, these crimes could not have occurred,” she said.

Chegge-Kraszeski said her handler in Kenya put her in touch with Otiso, who picked her up at the airport and introduced her to the other conspirators.

Under questioning by Otiso’s lawyer, Jack Tinney, she admitted that she didn’t consider Otiso a leader in the scheme.

“There was no leader among us,” she said, referring to the conspirators in the United States. “They [in Kenya] told us what to do.”

The judge, however, referred to Chegge-Kraszeski and Otiso as “lieutenants” for the ringleaders in Kenya.

“You were an enabler, and an important one,” he said to Otiso before sentencing him.

Two other Kenyan men involved in the scheme, Michael M. “Mikey” Ochenge, 33, and Albert E. Gunga, 30, both of Minneapolis, have also pleaded guilty and are scheduled to be sentenced on Aug. 26.

Chegge-Kraszeski’s sentencing, initially scheduled for Thursday, was postponed until Aug. 31.

“Today represents a victory for taxpayers,” said U.S. Attorney Booth Goodwin in a prepared statement. “When the state itself is defrauded, we all suffer. 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.”

Reach Andrew Clevenger at acleven…@wvgazette.com or 304-348-1723.