Federal Agencies Fall Victim to African Fraud Scheme

Jul 25, 2013 9:28am

Even the U.S. government has to deal with those pesky, Internet-based scams out of Africa.

New court documents show that several years ago, the U.S. Department of Defense, the National Institutes of Health and other federal agencies fell victim to an intricate fraud scheme, whereby individuals in Kenya were able to divert payments from those agencies to their own bank accounts.

In 2008, a group of unidentified individuals in Kenya somehow accessed the U.S. government’s Central Contractor Registry, a password-protected database that maintains bank account information of government contractors and research institutions doing work for the government, according to the court documents filed Friday in federal court.

After accessing the registry, the individuals changed bank routing information to divert the money to accounts they controlled, the documents said. In at least one case, those bank accounts were accessed from an Internet café in Kenya.

In June 2008, more than $135,000 paid by the National Institutes of Health and meant for the University of Notre Dame was diverted to the bank accounts. Two months earlier, more than $25,000 paid by the Department of Defense and meant for a technology institute was diverted, according to the court documents.

In total, the alleged fraudsters’ bank accounts received nearly $250,000 in diverted funds.

But most – if not all – of that money was frozen before the alleged fraudsters could take hold of it. The bank had launched its own investigation, and the FBI followed suit, court documents said.

Court documents name two men as persons of interest in the case, but one was deported from the United States due to “violent criminal conduct.” Another has yet to be located, though he may have previously been involved in money laundering and bank fraud, according to court documents.

A spokeswoman for NIH and a spokesman for the FBI’s field office in Baltimore, Md., which is handling the matter, did not immediately comment.

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