Kenyan, Guyanese nationals indicted in Sh84.1 billion US Health Commodities Diversion Scheme
The investigation focused on the approximately $650 million USAID-funded KEMSA Medical Commodities Programme (MCP).
A Kenyan, a Guyanese national and their businesses have been indicted for conspiring against the US to illegally divert US-funded global health commodities valued at $650million (Sh84.1 billion) from the Kenya Medical Supplies Authority (KEMSA).
The two Eric Ndungu Mwangi, 40 and Davendra Rampersaud, 42, a Guyanese national, and their associated businesses were at first indicted by a federal grand jury in the District of South Carolina in 2021, but the file was sealed to allow the conclusion of a second probe by the Attorney's Office in the District of South Carolina.
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That long-term investigation led by the Office of the Inspector General for the US Agency for International Development (USAID) concluded on Tuesday.
The investigation focused on the approximately $650 million USAID-funded KEMSA Medical Commodities Programme (MCP).
Court papers indicate that the purpose of KEMSA MCP was to establish and operate a safe, secure, reliable, and sustainable supply chain management system for HIV/AIDS commodities needed to provide care and treatment of persons with HIV/AIDS in Kenya, and to support the warehousing and distribution of select family planning, nutrition, and malaria commodities.
However, at the beginning of 2014, Mwangi and his company, Linear Diagnostics (LD), systematically stole HIV test kits and other commodities intended for KEMSA.
The stolen goods found a buyer in Rampersaud and his Guyanese company, Caribbean Medical Supplies, Inc. (CMS).
"In 2015, Rampersaud fraudulently secured a 'Letter of Authority' to operate as an authorised distributor. This allowed him to secure a lucrative, sole-source contract with the Guyana Ministry of Health for the products he was acquiring illegally," the document adds.
Between 2015 and 2019, Rampersaud paid Mwangi over $177,000 for the diverted medical supplies, including the stolen, USAID-funded HIV test kits meant for Kenya.
He then profited again by selling these stolen health commodities to the Guyanese government.
He and his company also acquired and sold test kits stolen from another separate USAID programme.
"This was an incredibly complicated investigation, spanning years. These defendants jeopardised a vital public health mission and caused a significant loss to the American taxpayers," said Attorney Bryan Stirling.
Mwangi was arrested in 2021 on claims of theft and fraud and awaits trial in Nairobi.
Meanwhile, he is also facing charges in the US that could see him face up to 20 years on various counts, fines, and a term of supervised release.
His co-suspect, Rampersaud, was arrested in January 2023 on charges arising out of the superseding indictment.
The authorities nabbed him when he flew into Miami during a flight layover, while attempting to travel back to Guyana.
He was transported to Charleston, South Carolina, and pleaded guilty to conspiracy and to stealing or converting health commodities that USAID paid for as part of a health care benefit.
He was then sentenced by United States District Judge Richard Gergel.
"Rampersaud received credit for time served and was additionally sentenced to three years of supervised release and ordered to pay a $84,000 fine," the court says.
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