The W.K. Kellogg Foundation in Battle Creek, Mich. (file photo)
Updated: Friday, 21 Aug 2009, 3:43 PM EDT
Published : Friday, 21 Aug 2009, 1:11 PM EDT
GRAND RAPIDS, Mich. (WOOD) - Two West Michigan residents and a woman living in South Africa have been indicted by a federal grand jury for defrauding the W.K. Kellogg Foundation out of $800,000.
"We are out those assets and we hope through this judicial process we'll be able to recover them," said Joanne Krell, a spokeswoman for the Battle Creek-based foundation. "We take seriously the funds that we have to improve the conditions of vulnerable children in the U.S. and around the world and the idea that there was anything fraudulent associated with that was frankly sickening."
Nehemiah Muzamhindo, of Kentwood, and Tichaona Machamire, of Berrien Springs, are charged in the case along with a third defendant, Sabina Brand, who authorities said is living in South Africa and in the process of being extradited. Each is charged with conspiracy, wire fraud and money laundering.
The grand jury accused Brand, a former employee of the foundation's office in Pretoria, South Africa, of creating and approving phony invoices that allowed shell companies created by Muzamhindo and Machamire to be paid with foundation money.
According to the indictment, the two created shell companies with "names that were intentionally similar to organizations that had legitimate contractual relations" with the charitable foundation, created in 1930 by cereal giant W.K. Kellogg.
Brand would wire foundation money to Kent and Berrien county bank accounts registered to the shell companies, the grand jury charged, and in exchange, Muzamhindo and Machamire would wire money to accounts controlled by Brand.
The Kellogg Foundation's finances, including those at its South Africa office, were audited by a third party, Krell said. After the federal government notified the foundation of the issue roughly a year ago, the foundation launched an internal investigation, she said. The foundation suspended operations in southern Africa in October 2008 because of the audit, according to a statement on its Web site. And in June 2009, the Pretoria, South Africa office was closed.
If convicted, the three would be ordered to repay the money to the Kellogg Foundation. Brand faces up to 85 years in prison for two counts of wire fraud, two charges of money laundering and one charge of conspiracy. Muzamhindo and Machamire each face up to 45 years for one count of wire fraud, one count of money laundering and one count of conspiracy.
The case was uncovered when agents for the U.S. Diplomatic Security Service were investigating Muzamhino and Machamire for passport fraud, according to a statement from the office of the U.S. Attorney for the Western District of Michigan. 24 Hour News 8 reported in July 2008 that Muzamhindo was charged federally with running a ring to create fraudulent passports.
On the Net: