Kenyans 'Stole Sh1bn in U.S. Fraud Scheme'
The Nation (Nairobi)
NEWS
26 July 2007
By Mugumo Munene
Kansas City
Four Kenyans appeared in a US court chained hand and foot and dressed in the luminous orange American jail uniform to answer charges in a multi-million dollar tax swindling case. The alleged wire fraud scheme involved stealing the identities of hundreds of victims, primarily nursing home residents, which were used to obtain more than $13.1 million (about Sh970 million) in fraudulent tax refunds.
Kenya's ambassador to the US, Mr Peter Oginga Ogego, who attended the court session, said Kenya would co-operate in the investigations and ensure that any suspects in Kenya are arrested and charged.
Clanging of chains
A hush fell over the courtroom as the four suspects were escorted in, the silence only punctuated by the clanging of the chains that fettered their hands and feet. And 30-year-old Loretta Wavinya was identified in court as the mastermind of the racket which prosecutors say illegally harvested millions of dollars from the American taxpayer. "Wavinya was the leader of the scheme," special agent Elizabeth Ackely said in her testimony.
Already, the court heard, Ms Wavinya planned to sell her house and car in Kansas City, 1,500 kilometres west of Washington, DC, and move to New York City. In the courtroom sat Mr Ogego, the embassy's First Secretary, Mr Mohammed Seif, and a handful of other Kenyans, eagerly following the proceedings. The diplomats had first held a meeting with US advocates Brent Powell and Jeffrey Valenti at which they were briefed on the status of the cases facing 17 individuals, 12 of whom are believed to be Kenyans.
Mr Ogego told the Nation afterwards that the Government would offer support in hunting down at least five other suspects believed to be in Kenya. Authorities here are looking for three other Kenyans believed to be residing in the US and who they say are suspects in the case. "We have been assured that these will be treated as individual criminal cases and will not be used to taint the good name of hard-working Kenyans. They were very expressive about it. It's a reprieve for Kenyans over the anxiety they have had about this case," Mr Ogego said.
Yesterday, the four Kenyan suspects already in custody appeared before magistrate judge John T. Maughmer, who will decide whether to give them bond or retain them in jail pending the full hearing and determination of their cases.
Heard evidence
Before the court were Mr Aaron Mutavi, 28, Mr Moses Ndubai, 33, Ms Lilian Nzongi, 26, and Ms Wavinya. Along with them were Mr Vincent Niagwara Ogega, whose nationality was not immediately established and Ms Parker Willingham, an American. The court heard evidence from special agent Ackley of the Internal Revenue Service - the US equivalent of the Kenya Revenue Authority - relating to thousands of documents recovered from Ms Wavinya's house, car and her private store.
Along with the thousands of documents recovered were three laptops and one desktop computer, Ms Ackely said. The documents included lists of names of identities stolen from old people living in nursing homes, those used to execute the tax scam and those used to open and run numerous accounts in different banks across Kansas City.
In Ms Wavinya's custody were 11 driving licences which had been issued after claiming repeatedly that she had lost the last one, the court heard. It was the mountains of documents that revealed that Ms Wavinya had worked as a tax preparer, an X-Ray technician and a nurse. Ms Ackley told the court that she was in a team that raided Ms Wavinya's house last Wednesday where the suspect was found hiding in a space between the ceiling and the roof.
The witness said that her team had staked out outside Ms Wanyiva's for 10 minutes. "We knew there was someone when we knocked because we had seen the lights go out. But when we knocked, she did not open." When the agents broke in, they searched the house and found Ms Wavinya tucked in a corner in the ceiling above a closet. "You had to step in a closet to see her," Ms Ackley said.
The agent showed the court documents revealing how Ms Wavinya directed the filing of over 350 fraudulent tax refunds claims using identities stolen from unsuspecting residents of old people's homes. They are filed through the Internet, which the conspirators used as a window of opportunity to file for refunds using stolen identities. They then requested the Internal Revenue Service to pay the money into bank accounts they controlled.
As she directed the scheme, raking in millions of dollars in cash for the co-conspirators, investigators found that Ms Wavinya did not file her own tax returns since 2002, Ms Ackley said. The US Attorney for Missouri, Mr John Wood, has cautioned that the charges are still accusations and not evidence of guilt. Evidence supporting the charges will subsequently be presented to a federal trial jury, whose duty is to determine guilt or innocence. According to the charges, conspirators allegedly filed at least 365 fraudulent federal tax returns during the course of the conspiracy that began in February 2005. They also allegedly filed fraudulent tax returns seeking refunds in 27 different states.
Some of the money obtained through the fraudulent scheme was wired into Kenyan bank accounts and part of it withdrawn through ATMs.
