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12.03.2007 General News

Ghanaian charged in US for $10m fraud

By The Statesman
Ghanaian charged in US for $10m fraud

He earns $82.00 (¢761,488.90) an hour. He is Ghanaian, married with two kids, and changes his luxury 4 wheel drives like some of us change our tro-tro to work.

Today, he is now under FBI lock-and-key, facing a 20-year maximum jail term for defrauding Cisco Systems of $10 million in computer parts over a period of five years.

"I knew what I was doing was wrong and that it was stealing,” he told agents, according to the charge sheet.

The official name in his now-at-risk green card (residence permit) is Michael Kyereme, aged 40. But, those who know this New Jersey-based Mfantsipim old boy know him as Kwadwo Benneh, aged 36. He is married to Alice, also known as Maame Tiema.

Last Thursday, US Magistrate Judge Mark Falk detained him without bail, after his bail hearing failed.

Mr Kyereme, who lives in a mansion at plush Piscataway, New Jersey, has been charged for mail fraud, facing a fine of $250,000 on top of a probable jail term. He worked as an independent contractor for Cisco Systems, hired to provide information technology support to the City of Newark employees and network troubleshooting to the city.

Checks made by The Statesman indicate that Mr Kyereme owns other properties in the US, including one in Delaware, and a house that he bought for $219,100 two years ago at Saratoga Dr, Janesville, Wisconsin. He also owns at least two houses in Ghana, East Legon, Accra, and Kumasi.

“He's a very nice guy,” appears to be the view of all those who know him, when The Statesman sampled the views of some New Jersey-based Ghanaians.

In a statement, the FBI said: “Kyereme used his position as an independent contractor to engage in a scheme to defraud Cisco of money and property valued at more than $10,000,000.”

After Federal investigators executed a search warrant at his house, Mr Kyereme allegedly confessed to exploiting the technology giant"s program for replacing faulty hardware, authorities said.

Under a service contract with Cisco, Newark is entitled to immediately obtain replacement parts for faulty hardware as long as the old hardware is returned within 10 days.

If it was determined that a computer-related problem could not be solved without outside assistance or a replacement part, Mr Kyereme was authorised to contact Cisco Systems for technical assistance and, if necessary, to request a replacement part.

But the upwardly Ghanaian allegedly made false claims that certain Cisco parts in Newark's IT system were defective, according to the criminal complaint released by the FBI. It is alleged that Mr Kyereme would falsely claim that certain Cisco parts in the City of Newark's computer systems were malfunctioning and needed replacing.

According to the charge sheet, since August 2002, Cisco sent about 280 replacement parts that they expected Mr Kyereme to install on the City's computer system. Instead he kept the parts and has allegedly confessed to the FBI that he resulted to selling them to a computer reseller, after being offered an “overwhelming” amount of money.

According to the complaint signed by FBI Special Agent Jason DiJoseph, the accused person often never sent back replacement parts. When he did, they were often parts from other computer companies or Cisco parts of drastically lower values, the complaint said.

On one occasion, he received a $260,000 one-port optical card from Cisco and sent back a $2,000 eight-port adapter, authorities said. The city computer mainframe doesn't even contain the part, which typically is used by global companies like PepsiCo and Exxon, authorities said.

An Associated Press claims that a search of his home on March 2 uncovered more than $3m worth of parts - all allegedly ordered under false pretenses on behalf of City of Newark.

Excluded from the report was the fact that Mr Kyereme allegedly tried to cover up his fraud by occasionally returning parts of lesser commercial value to Cisco. The company, which is cooperating with investigators, said almost 150 apparently defective parts have never been returned.

Out of the 132 parts that were retuned, just 33 of those matched Cisco's records, the charge sheet reads.

He was a graduate of the New Jersey Institute of Technology and Seton Hall University, South Orange and one of several Ghanaians who are earning hundreds of thousands of dollars a year providing IT support in the US.

Mr Kyereme was paid approximately $82 per hour by Newark City for his work as a senior engineer. The company that employs him, Specialty Systems of Toms River, was paid $13,000 per month. The company is on the state's approved vendor list, said Lupe Todd, a spokeswoman for City of Newark Mayor, Cory Booker.

“It's a total surprise,” said Emil Kaunitz, president of Specialty Systems. “He's a good worker.”

Mr Kaunitz said Mr Kyereme, who has worked for the company since 2001, has been fired. He has also been barred from doing business with the city, according to a report in the Star-Ledger.

City officials said they were cooperating with the FBI investigation. They declined to discuss how Mr Kyereme could have ordered parts without anyone's knowledge.

The FBI is involved in a similar case in Boston, and the agency is now investigating whether Cisco is the subject of organised and/or concerted scams by fraudsters.

In another incident involving Cisco, Michael Daly, a 53-year-old Massachusetts man, was arrested on Tuesday, accused of fraud after he allegedly used false identities to order replacement parts from Cisco on at least 700 occasions. The scheme involved pretending to be a customer, then ordering parts from the company to “replace” Cisco parts that had broken. The supposedly broken parts were sold on the open market. On occasions when he was challenged, Daly allegedly returned worthless parts.