Woman Indicted for Corporate ID Theft

Set up dummy corps to defraud states
June 8, 2009

Corporate America needs to pay attention to this identity theft case: A woman has been indicted for defrauding West Virginia of about $2 million using identity theft and dummy corporations, according to media reports.

Federal prosecutors allege Angella Muthoni Chegge-Kraszeski, 33, of Raleigh, North Carolina, obtained a South African passport in the name of Christina Ann Clay, then used the fake identity to create dummy corporations in North Carolina, The Charleston Gazette reported.

Two of the defendant’s businesses were named Deloite Consulting Corporation and Unisyss Corporation. These are close to, but not quite, the names of actual companies (Deloitte Consulting LLP and Unisys Corporation) doing business with West Virginia’s government.

The indictment alleges Chegge-Kraszeski contacted West Virginia Auditor Glen Gainer’s office to divert funds to bank accounts using the similar but incorrect business names. Chegge-Kraszeski and co-conspirators then funneled the money to banks in Nairobi, Kenya, according to The Gazette.

The scam was discovered in May. The first payment of $919,916 intended for Deloitte Consulting for services provided to the state Department of Health and Human Resources was misdirected on March 19, according to the indictment.

Authorities have identified nine other states and five other corporations that may have been affected, Gainer said, declining to offer specifics while the investigation was ongoing.

Earlier this year, Chegge-Kraszeski was arrested for attempting to squeeze the state of Florida. State CFO Alex Sink stated May 14 that the defendant allegedly provided phony documentation directing the Department of Financial Services (DFS) to divert funds to a bank account for a fake corporation she set up using a fake identity.

“Not one dime was stolen from Florida taxpayers,” Sink stated, crediting “smart safeguards, an effective team and a quick response.”

West Virginia’s auditor, meanwhile, said the state’s payment process is under review. “We are very diligently and carefully scrutinizing every electronic payment because of this,” Gainer said. “We are erring on the side of caution.”

This case, the country’s first major “corporate identity theft,” should prompt many companies and state governments to review their payment processes, Fordham University’s Joel Reidenberg told The Associated Press. “This raises the need to have a robust debate on how an authentication network is created.”

This unusual con is also a simple reminder of the need for close attention to details, as it boldly demonstrates the big difference a single letter can make.