West African Man Charged With Fraudulently Obtaining $12 Million From The Global Fund To Fight AIDS, Tuberculosis And Malaria And The United States Agency For International Development

Preet Bharara, the United States Attorney for the Southern District of New York, announced the unsealing today of an indictment charging MALAMINE OUEDRAOGO, a citizen of Burkina Faso, with wire fraud in connection with a scheme to distribute ineffective malaria nets treated with little or no insecticide instead of the World Health Organization-certified nets treated with the proper quantity of insecticide that OUEDRAOGO had promised to supply to the West African country of Burkina Faso.  The malaria nets in question were to be distributed as part of an anti-malaria campaign by the Global Fund to Fight AIDS, Tuberculosis and Malaria (“Global Fund”), funding for which was provided, in part, by the United States Agency for International Development (“USAID”).  Because the counterfeit malaria nets that OUEDRAOGO obtained without the knowledge or permission of the Global Fund were significantly less expensive than the certified malaria nets OUEDRAOGO had agreed to purchase and supply, OUEDRAOGO defrauded the Global Fund and USAID out of more than $12 million.  OUEDRAOGO remains at large.

According to allegations contained the Indictment[1]:

USAID is an independent federal agency that provides loans, grants, and technical assistance to assist countries with, among other things, global health issues.  The Global Fund is an international financing organization based in Geneva, Switzerland, that disburses resources to prevent and treat HIV and AIDS, tuberculosis, and malaria.  The Global Fund regularly receives substantial funding from USAID.  The Programme D’Appui Au Développement Sanitaire (“PADS”), or Program for Health Development, is an entity within the Ministry of Health of Burkina Faso that receives and distributes funds contributed by donor countries and other organizations for health-related causes within the West African country of Burkina Faso.  Among these health-related causes is the prevention and treatment of malaria, which is a leading cause of morbidity and mortality in Burkina Faso.

Malaria is a mosquito-borne infectious disease.  The risk of malaria can be reduced by preventing mosquito bites through, among other things, the use of mosquito nets.  Mosquito nets are nets, constructed from polyester or other material, with mesh fine enough to exclude insects without unacceptably impeding visibility or the flow of air.

Mosquito nets are substantially more effective in preventing malaria if treated with an appropriate insecticide.  Nets not treated with insecticide are less effective because they fail to repel or kill mosquitos and can develop small holes over time through which mosquitos can penetrate.  Untreated nets therefore pose a higher risk of exposure to mosquitos, and an increased health risk for people using them.  Mosquito nets treated with insecticide, also known as long-lasting insecticidal mosquito nets, or LLINs, are substantially more costly to produce than untreated mosquito nets.

The World Health Organization (“WHO”) is a specialized agency of the United Nations that is concerned with international public health.  The World Health Organization Pesticide Evaluation Scheme (“WHOPES”) is a program within the WHO that promotes and coordinates the testing and evaluation of pesticides for public health.  WHOPES also conducts testing and review of long-lasting insecticidal mosquito nets (“LLINs”) used for the prevention of malaria, and issues recommendations of particular LLINs that meet certain criteria and requirements set forth by the WHO.

Because of the importance of LLINs in preventing the spread of malaria, WHOPES conducts and coordinates extensive evaluation and testing of mosquito nets to ensure that the nets are as effective as possible in preventing the spread of malaria.  After evaluation and testing, WHOPES issues recommendations of particular mosquito nets found to be effective in preventing the spread of malaria.  As a result, Global Fund and USAID only fund the purchase of LLINs that are recommended by, and conform to the standards of, WHOPES.

MALAMINE OUEDRAOGO, a citizen of Burkina Faso, obtained more than $12 million in funding from the Global Fund (provided to him via PADS) to purchase, and provide to the people of Burkina Faso, more than 2 million WHOPES-certified mosquito nets made by a particular WHOPES-recommended manufacturer in Thailand (the “WHOPES-Recommended Manufacturer”) and appropriately treated with long-term insecticides.  Contrary to the express, written promises that OUEDRAOGO made in securing that funding, however, nearly all of the mosquito nets he purchased and provided to the people of Burkina Faso were counterfeit, not manufactured by the WHOPES-Recommended Manufacturer, not certified by WHOPES, and not properly treated with insecticide.

Instead of purchasing WHOPES-recommended mosquito nets from the WHOPES-Recommended Manufacturer, as he had promised to do, OUEDRAOGO purchased counterfeit nets that were manufactured by a non-WHOPES-recommended manufacturer in China (the “Chinese Manufacturer”), but were fraudulently labeled and packaged to look like the nets produced by the WHOPES-Recommended Manufacturer.  The nets OUEDAROGO purchased and then distributed in Burkina Faso contained little or no insecticide.

OUEDRAOGO purchased the counterfeit mosquito nets from the Chinese Manufacturer for a small fraction of the price OUEDRAOGO knew it would have cost to purchase properly treated nets that satisfied WHOPES standards.  As a result, OUEDRAOGO fraudulently obtained over $12 million in illegal profits from the Global Fund and USAID.

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OUEDRAOGO, 33, of Burkina Faso, is charged with one count of wire fraud.  He faces a maximum sentence of 20 years in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Bharara praised the outstanding investigative work of the USAID Office of the Inspector General.  Mr. Bharara also thanked the Global Fund for its assistance in the investigation.   

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorney Elisha Kobre is in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.