Defendant In Children Charity Fraud Case Pleads Guilty
GRAND RAPIDS, MICHIGAN – Nehemiah Muzamhindo, a resident of Grand Rapids, Michigan and citizen of Zimbabwe, pled guilty to federal money laundering and income tax charges before U.S. Magistrate Judge Ellen Carmody, U.S. Attorney Patrick Miles announced today. Joining Miles in the announcement were Scott Collins, Special Agent in Charge of the Diplomatic Security Service (“DSS”) and Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation.
Muzamhindo faces a maximum sentence of 23 years in prison; an order of restitution and criminal fines, and deportation. Sentencing, which will be conducted by U.S. District Judge Janet T. Neff, has not yet been scheduled.
Muzamhindo was investigated by federal agents in 2008 for his role in a scheme to obtain fraudulent U.S. passports. While conducting a search warrant on his home, agents discovered evidence that Muzamhindo had received large wire transfers from bank accounts held by the W.K. Kellogg Foundation (“WKKF”) in the Republic of South Africa. WKKF has its headquarters in Battle Creek, Michigan and is one of the world’s largest children’s charities. The investigation ultimately determined that Muzamhindo was part of a fraudulent scheme to submit bogus invoices for payment to WKKF, which paid members of the scheme approximately $800,000 between 2006 and 2008 before learning that it was being swindled.
By pleading guilty to a federal money laundering charge, Muzamhindo admitted to being part of the scheme, and to wiring roughly half of the fraudulent funds back to Africa, where one of his accomplices lived. He also admitted that he had filed false income tax returns during 2006 and 2008 because he did not report any of the money he received from WKKF during those years.
U.S. Attorney Miles commented that “The positive result in this case is directly attributable to the dedicated and coordinated efforts of federal law enforcement, beginning with the Diplomatic Security Service uncovering Muzamhindo’s scheme in the course of an unrelated passport fraud investigation. Their diligence prevented the loss of even more money meant to help disadvantaged children. Then agents of the IRS worked to have Muzamhindo held accountable for his attempt to cheat on his taxes, reinforcing the message that swindlers will be held accountable for the full measure of their deceit in this district.”
“The worldwide presence and investigative capabilities of the Diplomatic Security Service enabled us to pull all of the pieces together – uncovering the connections to South Africa; allowing DS agents to compile the evidence that assisted the prosecution team to accepting Muzamhindo’s guilty plea,” said Scott Collins, Assistant Special Agent in Charge of the Chicago Field Office of the Diplomatic Security Service. “Our Detroit Resident Office led our investigation and worked collaboratively with the IRS and U.S. Attorney’s Office. DSS takes very seriously our charge to protect the integrity of the U.S. passport and visa. Those who fraudulently acquire U.S. travel documents often do so in order to commit other crimes.”
Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation added that Muzamhindo’s crime was worse than many typical fraud cases: “He diverted money intended for children for his own greedy purposes.”
The case was prosecuted by Assistant U.S. Attorney Timothy VerHey and was investigated by special agents of the IRS-Criminal Investigation and of the Diplomatic Security Service.