doj.gif

NEWS RELEASE

OFFICE OF THE UNITED STATES ATTORNEY

WESTERN DISTRICT OF MISSOURI


JOHN F. WOOD


Contact Don Ledford, Public Affairs ● (816) 426-4220 ● 400 East Ninth Street, Room 5510 ● Kansas City, MO 64106

www.usdoj.gov/usao/mow/index.html


JUNE 25, 2008

FOR IMMEDIATE RELEASE


KENYAN WOMAN PLEADS GUILTY TO $15 MILLION

TAX FRAUD CONSPIRACY


            KANSAS CITY, Mo. – John F. Wood, United States Attorney for the Western District of Missouri, announced that a Kenyan national pleaded guilty in federal court today to her role in a multi-million dollar conspiracy to defraud the Internal Revenue Service. The wire fraud scheme involved stealing the identities of hundreds of victims, primarily nursing home residents, which were used to seek more than $15 million in fraudulent federal tax refunds.


             Loretta Wavinya, 31, a citizen of Kenya residing in Kansas City, Mo., pleaded guilty before U.S. Magistrate Judge John T. Maughmer this morning to the charges contained in a July 18, 2007, federal indictment.


             By pleading guilty today, Wavinya admitted that she had a substantial role in a conspiracy to steal identity information (including Social Security numbers), predominantly from elderly nursing home patients, and use it to file at least 365 fraudulent federal tax returns from February 2005 to July 2007. They also filed fraudulent tax returns seeking refunds in 27 different states. In addition to the conspiracy, Wavinya pleaded guilty to wire fraud and aggravated identity theft.


             Wavinya worked as a tax preparer and as a certified radiology technician at Kansas City-area nursing homes and medical facilities. In the course of her employment, she had access to patient identity information that was later used in the conspiracy. While executing search warrants at Wavinya’s residence and elsewhere, law enforcement officers discovered patient information from area health care providers containing hundreds of patients’ names and identity information.


             In order to conceal their true identities, Wavinya and other conspirators filed these fraudulent tax returns electronically through public Internet “hot spots,” such as coffee shops or restaurants, and through unsecured private wireless networks maintained by unwitting individuals with no connection to the conspiracy. Law enforcement officers discovered evidence that Wavinya used her neighbor’s unsecured wireless network to connect to the Internet.


             The false tax information was used to generate federal refund claims in the range of $4,000 to $47,000 each. Conspirators also submitted false returns to state taxing agencies, typically in conjunction with federal returns, to generate claims in the range of $1,500 to $20,000 per return. Conspirators often filed multiple state tax returns in conjunction with a single federal tax return.


             Mail related to the returns and credit cards was sent to commercial mailboxes across Kansas City, and Wavinya and other conspirators often used “runners” to pick up this mail in order to conceal their own identities.


             Wavinya and other conspirators caused numerous bank accounts in Kansas City and elsewhere to be opened specifically for the purpose of receiving electronic fund transfers of tax refund payments. Shortly after a refund payment would be wired into an account, conspirators used runners to help them withdraw the money. Conspirators wrote checks to the runners in amounts less than $10,000 and drove the runners from bank to bank to cash the checks until the accounts were depleted, or the bank or the IRS detected the fraud and froze the account. The runners provided the withdrawn funds back to the conspirators and received a small payment for their services.


             Some of the money obtained by the conspiracy was wired to banks in Kenya, where refund money was sometimes withdrawn directly from accounts through automated teller machine (ATM) withdrawals occurring in Kenya. On some occasions the conspirators routed electronic transfers of tax refunds directly to prepaid debit-like cards obtained anonymously through an Internet application process.


             Wavinya, who remains in federal custody, is the third defendant to plead guilty to charges contained in the federal indictment. Co-defendants Vincent Niagwara Ogega, 24, a citizen of Kenya residing in Independence, Mo., and Rashira Lewis, 21, of Kansas City, Mo., each pleaded guilty on April 16, 2008, to wire fraud.


             Ogega is a former employee of Wilshire At Lakewood nursing home in Lee's Summit, Mo., Beautiful Savior Home in Belton, Mo., and Country Club Care Center and Johnson County Care Center in Warrensburg, Mo. Ogega’s role in the scheme was to cash the checks and provide the proceeds to other conspirators in exchange for being paid a flat rate fee. Specifically, Ogega admitted to participating in and aiding and abetting 12 fraudulent financial transactions totaling $81,000 from April 21 to Aug. 11, 2006.


             Lewis’ role in the scheme was to receive fraudulent refunds into her bank accounts and then withdraw the money and provide it to her co-conspirators. In total, Lewis admitted, the attempted loss attributable to her conduct is $222,944.


            Under federal statutes, Wavinya could be subject to a mandatory minimum sentence of two years in federal prison without parole, up to 27 years in federal prison without parole, plus a fine up to $750,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.


            This case is being prosecuted by Executive Assistant U.S. Attorney Daniel M. Nelson and Assistant U.S. Attorney Curt Bohling. It was investigated by the U.S. Postal Inspection Service, IRS-Criminal Investigation, U.S. Immigration and Customs Enforcement and the U.S. Secret Service.


****************

This news release, as well as additional information about the office of the United States Attorney for the Western District of Missouri, is available on-line at

www.usdoj.gov/usao/mow/index.html