US seeks extradition of six Kenyans in Sh96m cyber fraud crackdown

The United States of America (USA) has come calling for six Kenyans it claims are linked to the American Universities heist syndicate.

The Standard can exclusively reveal that the USA wants Elvis Omari Obaigwa, Francis Mobisa Asanyo, Peter Omari, Linus Karani, Bernard Morara Osoro and Godfrey Julius Mbogori extradited to the USA, claiming that they were allegedly engaged in business email compromise fraud schemes that siphoned billions of Kenyan shillings from the US government entities and academic institutions.

Although the USA has an interest in the six, it is only Asanyo who moved to the High Court to challenge the law allowing the USA to come hunting for Kenyans whom it believes may have committed a crime.

Documents filed in court indicate that the jury in United States District Court in Virginia issued a warrant of arrest against Asanyo on November 15, 2023.  The charges in the USA against him are conspiracy to commit computer intrusions, aggravated identity theft and conspiracy to commit wire fraud.

Federal Bureau of Investigation (FBI), in its correspondence with the Kenyan government, indicated that it first noticed the alleged scam in April 2019, when a university in Eastern Virginia reported it.

It emerged that there was a ‘mule’ who masqueraded as an employee of a construction company that had a contract with the university. The target, according to court documents, was Sh96 million, which was to be sent to an account of a company that had a similar domain name to the real one.

“Fortunately, the victim university’s bank discovered the fraud in time such that only $20,000 was lost and unrecoverable,” the correspondence reads in part.

 A probe led investigators to Maryland, where they arrested and had the man they linked to Asanyo and Osoro charged. According to the court documents, Osoro and the mule allegedly communicated through WhatsApp.

Further, it also emerged that there was a ‘Sergey Polonov’ who communicated with the same mule, indicating that he would be dealing with him directly and not Asanyo. Now, Polonov, according to court documents, was one Elvis Obaigwa.

 The probe widened, and eight more US-based money mules were arrested, after which they agreed to co-operate with investigators in order to get the Kenyan-based handlers.

Among the mules named by the FBI are Ahmed Chala and Leon Wanjiku. The FBI stated that it had been able to allegedly recover at least Sh2.5 billion in attempted scams, while the biggest heist try was allegedly around Sh23 billion.

According to the US-based agency, Donald Trump has, however, lost around Sh563 million to the alleged syndicate.

“Asanyo operates as a middleman or handler in the Kenya BEC conspiracy. Asanyo serves as a conduit between Elvis Obaigwa and money mules, passing along Obaigwa’s instructions regarding registering companies and opening bank accounts, and sending back to Obaigwa the information about companies and accounts to be used in modifying the vendor accounts. At times, Asanyo served as handler for various USA-based mules,” it continued to read.

At the High Court, Asanyo claims that the extradition treaty between Kenya and the USA was ratified when Kenya was a colony and a protectorate in 1931, and it was allegedly between the USA and the United Kingdom.

He also argued that any case emanating from the scandal should be tried here in Kenya and not the USA.

“All acts attributed to the Petitioner were performed in Kenya, the Petitioner being described as "based in Kenya" throughout the extradition bundle. Section 6 of the Extradition (Contiguous and Foreign Countries) Act, Cap 76, bars the surrender of a person for acts committed within Kenya. Surrendering the Petitioner in these circumstances would constitute an arbitrary removal from Kenya contrary to Article 29(f) of the Constitution, there being adequate domestic remedies under the Computer Misuse and Cybercrimes Act, No. 5 of 2018 and the Penal Code, Cap 63,” argued Asanyo.

 A former University of Nairobi student, Jeffrey Ndungi Sila, is behind bars, serving a decade-long sentence, following another scam involving Sh434 million.

In 2016, the Internal Revenue Service (IRS) – the US equivalent of Kenya Revenue Authority – began investigating a scheme involving stolen tax refund cheques.

The IRS believed the scheme was being run out of Kenya and suspected one Lydia Breaux of acting as a stateside operative.

Breaux soon confided to an undercover IRS agent that Ndungi had entered the US from Kenya with a large tax refund cheque in need of cash.

The trio (the IRS agent, Breaux and Ndungi) met in a restaurant in Dallas, Texas to negotiate the purchase of the cheque by the IRS agent.

At this meeting, Ndungi showed the agent a picture of the cheque, made out to an individual named Cynthia Short, who had since died. Ndungi also assured the agent that he could get him a fake driver’s license in Short’s name.

Negotiations continued for a week until the trio met again to close the deal on August 9, 2016. The IRS agent bought the cheque at Sh4.8 million.

From the conversation, it appeared that Ndungi was in fact running a separate syndicate in the US, printing fake drivers’ licences. Ndungi promised to make for the agent a “nice-looking number plate”.

“I will make you a driver’s licence; you pay me. Email it, give me your email address and I will send it to you, perfect colour,” Ndungi is quoted to have told the agent.

A few days later, Ndungi made good his promise and e-mailed the agent a fake driver’s licence in Short’s name.

Further investigation revealed that other fraudulent tax refunds had been issued to a bank account linked to Breaux. One such refund, under the name Dietrich Eipper, was filed with an IP (Internet Protocol) address associated with Ndungi.

During his trial, the court was told that Ndungi illegally obtained the cash by presenting to the United States Department of the Treasury a cheque payable to Short that had been issued on a federal income tax return filed electronically from Kenya.

Ndungi was claimed to have stolen Sh434 million from dead pensioners in the US.

The undercover agent had negotiated with Ndungi for a discount, but the man informed him that a single cent out of the whole deal would lead to his death. At the time of his arrest, Ndungi had with him cheques worth Sh7.6 million.

“There are a lot of people involved with these cheques; if I tell them something happened, they can kill me,” Ndungi confided to the agent, adding that the cut for each of the players had been agreed upon.

The agent pressed him on whether he was in the syndicate alone and he answered that it was not his speciality, and in fact, the deal was too huge for him.

“I got to tell you this is not my area; I tell you there are a lot of other guys. I cannot talk on their behalf,” he told the agent who wanted a ‘small cut’ as a first-time customer.

Ndungi was arrested and charged with two counts of theft of public funds based on two fraudulent tax refunds, one in Short’s name and another in Eipper’s name.

He was jailed for 10 years, but he successfully appealed and is awaiting fresh sentencing.

Justices Patrick Higginbotham, Jennifer Elrod, and Catharina Haynes unanimously agreed that a Northern Texas Jury wrongly convicted him.

The three judges ruled that there was insufficient evidence to pin Ndungi and ordered that he should be re-sentenced.

“Drawing all reasonable inferences in support of the verdict, we hold that the evidence was insufficient to support Sila’s Count III conviction,” the Fifth Circuit Court ruled.

According to the three judges, the argument fronted by the US authorities that Ndungi was the only user of a PayPal account that was used to siphon taxpayers’ returns was watered down by the fact that the same account was used 1,000 times after he was taken into custody.