5 Twin Cities Kenyans allegedly tricked 4 states

We've all heard of the Internet scam in which the supposed dethroned prince of Nigeria tricks people into giving money in return for future riches.

But a massive scheme that fools state governments?

Five Minnesotans of Kenyan descent have been indicted in connection with a wire fraud scam in which they created bogus bank accounts -- with names similar to actual state vendors -- to steal more than $3.3 million from West Virginia, Massachusetts, Kansas and Ohio.

Federal officials say the alleged thieves then wired a significant portion of that money to bank accounts in Kenya.

In an indictment unsealed this week after the five were arrested in Minnesota, investigators allege Michael M. Ochenge, 33, of Minneapolis; Robert M. Otiso, 36, of Elk River; and Paramena J. Shikanda, 35, of Minneapolis, used fraudulent bank accounts, phony companies and bogus direct deposit paperwork to have money that was intended for legitimate vendors deposited with them instead.

Two other Minneapolis men, Collins A. Masese, 20, and Albert E. Gunga, 30, are accused of helping launder the proceeds, including sending nearly $800,000 to accounts in Kenya.

They are in custody, and on Thursday in U.S. Federal Court in Minneapolis, they were ordered moved to West Virginia to face the charges.

According to the indictment, the five scanned the Internet to find businesses that made a lot of money from state contracts, set up phony entities and bank accounts with similar names, went to state websites to download direct deposit paperwork and then filed that paperwork with the states.

In all, according to the charges, they stole $1.2 million from Massachusetts, $919,000 from West Virginia, $301,000 from Ohio and $869,000 from Kansas.

SWAT team acts in Elk River

A SWAT team surrounded Otiso's home on a quiet street in Elk River around 7 a.m. Tuesday, a neighbor said. Other officers, wearing jackets emblazoned with yellow letters spelling out ICE, IRS and U.S. Secret Service, took part in the raid, said the neighbor, who did not want to give his name to protect his family's safety.

Investigators stayed about four hours and removed several boxes from the house where Otiso lives with his wife, teenage daughter, a young son and an older woman, according to the neighbor.

If convicted on all eight counts in the indictment, Ochenge, Otiso and Shikanda each face as many as 160 years in prison. If convicted of the money-laundering counts, Masese and Gunga face as many as 20 years in prison.

A North Carolina resident married to a U.S. citizen was named as an unindicted co-conspirator. She allegedly helped set up the bogus companies and bank accounts.