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Archive for November 17th, 2009

Five More Kenyans Arrested in Alleged Multi-State Fraud Scheme

Posted by Administrator on November 17, 2009

***If convicted of all charges, three of the Kenyans will face 160 years each in prison while the other two will face 20 years each.

***Auditor Glen Gainer III calls the crimes “terrorist acts”.

CHARLESTON, W.Va. — An international team of scam artists defrauded four states, including West Virginia, out of $3.34 million by creating phony accounts with similar names to vendors with large state contracts, according to a federal indictment unsealed on Tuesday.

Using information about the contracts gleaned from government Web sites, the conspirators created dummy corporations and bank accounts, the indictment alleges. They then wrote to state governments and changed the payments to direct deposit to the fake bank accounts.

Once the funds cleared, they were transferred to various banks in Nairobi, Kenya, according to the indictment.

The alleged conspirators are: Michael M. “Mikie” Ochenge, 33; Robert M. “Robe” Otiso, 36; Paramena J. Shikanda, 35; Collins A. Masese, 20; and Albert E. Gunga, 30. Otiso is from Elk River, Minn.; the rest are from Minneapolis.

Angella Muthoni Chegge-Kraszeski, 33, of Raleigh, N.C., is not named as a defendant in the indictment, but she was charged in the same scam by a federal grand jury in June. On Tuesday, as the others were indicted, prosecutors asked a judge to schedule a guilty plea for Chegge-Kraszeski.

In May, the case made headlines in West Virginia, when state Auditor Glen Gainer III’s office discovered that three payments totaling roughly $2 million had not reached their intended destinations.

The indictment addresses at least one of those payments, a March 20 $919,916 transfer to Deloitte Consulting for providing data systems help to the state Department of Health and Human Resources. Instead of going to Deloitte, it went to Deloitte Consulting, which had been set up by Chegge-Kraszeski in January in North Carolina, the indictment alleges.

Before officials caught on, the scheme netted $919,916 from West Virginia, with an additional $1,288,037 stolen from Massachusetts, $869,546 from Kansas and $301,571 from Ohio, according to the indictment.

On multiple occasions, Chegge-Kraszeski, who had been express-mailed a phony South African passport under the name Christina Ann Clay from Dubai in the United Arab Emirates, flew to Minnesota, where she and the others set up bank accounts with TCF Bank in Minneapolis, the indictment alleges.

On Tuesday, as he praised the work of the U.S. Attorney’s Office in Charleston as “outstanding,” Gainer called the incident a “wakeup call.”

“We are under assault. As far as I’m concerned, these were terrorist acts,” he said.

The alleged conspirators specifically targeted state governments, and used public information to exploit a weakness in states’ payment systems, he said.

“They researched the states. We saw where they went in through the public [Internet] portal,” he said.

West Virginia has recovered roughly $500,000 of the missing funds, but the state’s losses still approach $1 million, he said.

Even the brief success of the scam in multiple states shows that officials need to be more vigilant, he said.

“Because state governments are now a target for international fraudulent activity, we must constantly be reviewing and changing our internal controls,” he said. “The trouble is you’re trying to stay one step ahead of the scammers.”

If convicted on all counts, Ochenge, Otiso and Shikanda face up to 160 years in prison. Masese and Gunga, who face charges of conspiracy to commit money laundering, could spend up to 20 years in prison.

Gainer said he knows that the suspects are all innocent until proven guilty, but if they are convicted, he plans to attend their sentencing hearings. In the meantime, he will continue to upgrade the safeguards in place to protect public funds.

“Our internal controls that we have today aren’t good enough for tomorrow,” he said.

Source: http://www.wvgazette.com

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Posted in Diaspora News | Tagged: , , | 46 Comments »

First U.S. marijuana cafe opens in Portland

Posted by Administrator on November 17, 2009

By Dan Cook

PORTLAND, Oregon (Reuters) – The United States’ first marijuana cafe opened on Friday, posing an early test of the Obama administration’s move to relax policing of medical use of the drug.

The Cannabis Cafe in Portland, Oregon, is the first to give certified medical marijuana users a place to get hold of the drug and smoke it — as long as they are out of public view — despite a federal ban.

“This club represents personal freedom, finally, for our members,” said Madeline Martinez, Oregon’s executive director of NORML, a group pushing for marijuana legalization.

“Our plans go beyond serving food and marijuana,” said Martinez. “We hope to have classes, seminars, even a Cannabis Community College, based here to help people learn about growing and other uses for cannabis.”

The cafe — in a two-story building which formerly housed a speak-easy and adult erotic club Rumpspankers — is technically a private club, but is open to any Oregon residents who are NORML members and hold an official medical marijuana card.

Members pay $25 per month to use the 100-person capacity cafe. They don’t buy marijuana, but get it free over the counter from “budtenders”. Open 10 a.m. to 10 p.m., it serves food but has no liquor license.

There are about 21,000 patients registered to use marijuana for medical purposes in Oregon. Doctors have prescribed marijuana for a host of illnesses, including Alzheimer’s, diabetes, multiple sclerosis and Tourette’s syndrome.

On opening day, reporters invited to the cafe could smell, but were not allowed to see, people smoking marijuana.

“I still run a coffee shop and events venue, just like I did before we converted it to the Cannabis Cafe, but now it will be cannabis-themed,” said Eric Solomon, the owner of the cafe, who is looking forward to holding marijuana-themed weddings, film festivals and dances in the second-floor ballroom.

NO PROSECUTION

The creation of the cafe comes almost a month after the Obama administration told federal attorneys not to prosecute patients who use marijuana for medical reasons or dispensaries in states which have legalized them.

About a dozen states, including Oregon, followed California’s 1996 move to adopt medical marijuana laws, allowing the drug to be cultivated and sold for medical use. A similar number have pending legislation or ballot measures planned.

Pot cafes, known as “coffee shops”, are popular in the Dutch city of Amsterdam, where possession of small amounts of marijuana is legal. Portland’s Cannabis Cafe is the first of its kind to open in the United States, according to NORML.

Growing, possessing, distributing and smoking marijuana are still illegal under U.S. federal law, which makes no distinction between medical and recreational use.

Federal and local law enforcement agencies did not return phone calls from Reuters on Friday seeking comment on the Portland cafe’s operations.

“To have a place that is this open about its activities, where people can come together and smoke — I say that’s pretty amazing.” said Tim Pate, a longtime NORML member, at the cafe.

Some locals are hoping it might even be good for business.

“I know some neighbors are pretty negative about this place opening up,” said David Bell, who works at a boutique that shares space with the cafe. “But I’m withholding judgment. There’s no precedent for it. We don’t know what to expect. But it would great if it brought some customers into our store.”

(Writing by Bill Rigby; editing by Mohammad Zargham)

Posted in US News | Tagged: | Comments Off on First U.S. marijuana cafe opens in Portland

Dual Citizenship In the New Draft Constitution

Posted by Administrator on November 17, 2009

One of the long awaited constitutional changes was availed today…

Dual citizenship

21. (1) A person who is a citizen does not lose citizenship by reason only of acquiring the citizenship of
another country.
(2) A person who as a result of acquiring the citizenship of another country ceased to be a Kenyan
citizen is entitled, on application, to regain Kenyan citizenship.
(3) Parliament shall enact legislation providing for conditions upon which citizenship may be granted to
individuals, other than individuals referred to in clauses (1) and (2), who are citizens of other
countries.
Deprivation of citizenship
22. A person may be deprived of citizenship only if the person acquired citizenship by means
of fraud, false representation or concealment of any material fact.
Residence
2 3 . (1) The following persons may enter and reside in Kenya if they comply with the
conditions prescribed by or under an Act of Parliament governing entry and
residence—
(a) a former citizen;
(b) a foreign wife or widow or foreign husband or widower of a citizen; and
(c) a child of a citizen.
(2) Parliament may enact legislation governing the entry into and residence in Kenya of
other categories of persons and providing for the status of permanent residents.
Responsibilities of a citizen
24. (1) All citizens have the responsibility to—
(a) acquire a basic understanding of the provisions of this Constitution and
promote its ideals and objectives;
(b) respect, uphold and defend this Constitution and the law;
(c) promote democracy, good governance and the rule of law;
18 Harmonized Draft Constitution of Kenya
(d) vote in elections and referenda;
(e) strive to foster national unity and live in harmony with others;
(f) co-operate with law enforcement agencies for the maintenance of law and
order;
(g) pay all due taxes;
(h) not to engage in corruption;
(i) engage in work for the common good and contribute to national
development;
(j) develop their abilities through acquisition of knowledge, continuous
learning and the development of skills;
(k) contribute to the welfare and advancement of the community where they
live;
(l) promote family life and welfare and act responsibly in the context of the
family;
(m) protect and safeguard public property from waste and misuse;
(n) protect the environment and conserve natural resources; and
(o) understand and enhance the Republic’s place in the international
community.
(2) The responsibilities set out in clause (1) apply equally, where appropriate, to noncitizens.
Legislation on citizenship
25. Parliament shall enact legislation—
(a) prescribing procedures by which a person may become a citizen;
(b) providing for voluntary renunciation of citizenship;
(c) prescribing procedures for deprivation of citizenship; and
(d) generally giving effect to the provisions of this Chapter.

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T.D. Jakes: Don’t Hold Back Those Who Want To Walk Away

Posted by Administrator on November 17, 2009

By T.. D. Jakes

There are people who can walk away from you.

And hear me when I tell you this! When people can walk away from you: let them walk. I don’t want you to try to talk another person into staying with you, loving you, calling you, caring about you, coming to see you, staying attached to you. I mean hang up the phone.

When people can walk away from you let them walk. Your destiny is never tied to anybody that left.

The bible said that, they came out from us that it might be made manifest that they were not for us. For had they been of us, no doubt they would have continued with us. [1 John 2:19]

People leave you because they are not joined to you. And if they are not joined to you, you can’t make them stay.

Let them go.

And it doesn’t mean that they are a bad person it just means that their part in the story is over. And you’ve got to know when people’s part in your story is over so that you don’t keep trying to raise the dead.. You’ve got to know when it’s dead.

You’ve got to know when it’s over. Let me tell you something.. I’ve got the gift of good-bye. It’s the tenth spiritual gift, I believe in good-bye.. It’s not that I’m hateful, it’s that I’m faithful, and I know whatever God means for me to have He’ll give it to me. And if it takes too much sweat I don’t need it. Stop begging people to stay.

Let them go!!

If you are holding on to something that doesn’t belong to you and was never intended for your life, then you need to……

LET IT GO!!!

If you are holding on to past hurts and pains ……..

LET IT GO!!!

If someone can’t treat you right, love you back, and see your worth……

LET IT GO!!!

If someone has angered you.

LET IT GO!!!

If you are holding on to some thoughts of evil and revenge…..

LET IT GO!!!

If you are involved in a wrong relationship or addiction… ..

LET IT GO!!!

If you are holding on to a job that no longer meets your needs or talents

LET IT GO!!!

If you have a bad attitude…. …

LET IT GO!!!

If you keep judging others to make yourself feel better……

LET IT GO!!!

If you’re stuck in the past and God is trying to take you to a new level in Him……….

LET IT GO!!!

If you are struggling with the healing of a broken relationship. …..

LET IT GO!!!

If you keep trying to help someone who won’t even try to help themselves.. ….

LET IT GO!!!

If you’re feeling depressed and stressed …………

LET IT GO!!!

If there is a particular situation that you are so used to handling yourself and God is saying ‘take your hands off of it,’ then you need to……

LET IT GO!!!

‘The Battle is the Lord’s!’

Posted in Features | Tagged: , | 2 Comments »

Kenyan Mum and kid in the UK win deportation reprieve

Posted by Administrator on November 17, 2009

Story By Alice McKeegan

A Kenyan Mum and her two-year-old daughter have been granted a last-minute reprieve in their battle against deportation.

Rose Jane Njoki Wanjohi, 43, and Natale were due to leave Britain at the end of last week, but were told that their deportation had been halted pending a review.

Rose claims she fled Kenya in fear of her life after her husband joined an outlawed sect.

The teacher was pregnant with Natale when she arrived in Hyde, Tameside, in December 2006 but her application for asylum was rejected earlier this year.

Her friends in Hyde welcomed the decision but warned that the fight was far from over.

Richard Bushell, 78, said: “We feel it’s a miracle that they are still here because Rose was starting to lose hope.

“We understand that new evidence has come to light which will be considered by immigration officials. We realise there’s a long way to go.”

He said that a couple of London-based friends had staged a demonstration at Heathrow before she was due to be deported. Mr Bushell said: “They handed out leaflets asking passengers not to fasten their seatbelts if Rose and Natale were on board but thankfully they were never faced with that situation.”
The pair are at a detention centre in Bedfordshire while their case is considered.

Source: Manchester Evening News

Posted in Diaspora News | Tagged: , , , | 1 Comment »

Kenyans in the US: TAX PREPARATION AND TAX FRAUD

Posted by Administrator on November 17, 2009

By Daniel Njenga (CPA) in Dallas

(*Names mentioned are fictitious and are used solely for presentation purposes)

I have known Mathew* for a period of five years but it was not until I introduced myself to him as a CPA that he opened up about his business. He told me that on average he gross earnings range between 70K and 150 K all from a self employed business.  Mathew was concerned by the many audits that the IRS was performing on his tax return starting with the 2005 return where he paid a fine of about $1000, 2006 a fine of $10,000 and on his 2007 returns which the IRS said were unfiled and had assessed him a tax amount of about $17,000.

In our discussions we talked about “Tax Avoidance” which is a legal way of avoiding taxes. I inquired about why his 2007 taxes are unfiled and his story is like the many that I have heard in the metropolis.

When Mathew started his business back in 2001, he reached out to Steve* and John*, fellow Kenyans with a tax office, to help him with his taxes.

All appeared well until 2004 when the FBI and the IRS raided the offices of Steve and John. John hastily left the country with a few possessions, leaving behind two brand new cars, a house and a thriving entertainment business.

Steve moved the location of the offices from Dallas to Arlington. When Mathew inquired about why the office was raided by the IRS, Steve explained that John had been involved in a tax fraud scheme and that Steve did not know about it until the FBI came knocking.

After filing his 2005 tax return, Mathew received an audit letter from the IRS, stating that he had claimed some deductions that he was not eligible to take. The IRS also asked him to refund some of the amounts that were sent to him.

Mathew could not remember claiming a these deductions or receiving a check from the IRS but reached out to Steve to inquire why the deductions were on his tax return and where the check from the IRS was. Steve was nowhere to be found and it was long after Mathew had paid the IRS fine that Steve was found.  Steve, insisted that the deduction information was provided by Mathew and that he, Mathew received the amounts claimed by the IRS. Mathew at the time was busy with his business and assumed that he must have forgotten about cashing the IRS check.

The story repeated itself in 2006 only with a bigger claim from the IRS.  When Mathew received the IRS audit letter, he went straight to Steve’s office. When Steve printed the 2006 tax return, Mathew could not recognize any of the numbers. His deductions were highly inflated and Steve had claimed a number of deductions that Mathew was not aware of.

Some of the obvious mistakes were that Steve had claimed children on Mathew’s return that he, Mathew did not even know existed. To make matters worse, the IRS refund did not get to Mathew. Steve claimed that the check must have been mailed to Mathew, but Mathew was sure he would remember a $14,000 check!!

Before Mathew could investigate, Steve went underground. He took with him, all documents relating to the 2006 and 2007 tax year. Until our meeting Mathew had not had any success in locating his documents.

Tax fraud perpetrated by Kenyans on their fellow Kenyans and on the IRS is on the increase. While some circumstances may be different, the end result is usually the same: the tax preparer goes to jail, is deported or goes missing, the tax payers  are haunted by the IRS for fraudulent deductions and claims and they end up losing money and property.

I will discuss some simple rules that will prevent tax fraud from camping at your door step.

Rule #1: Your Taxes are your responsibility. You cannot pass that responsibility to another person. Many people assume that because they pay for tax preparation services that they somehow pass the responsibility to the paid preparer. Take all precautions to make sure your taxes are filed correctly. Points to consider- do not ignore correspondence from the IRS. It does not go away. Make sure you get professional help from a CPA, an enrolled agent or an attorney when dealing with the IRS.

Rule #2: Identity theft is real. The media is full of cases of tax fraud. And that’s just the tip of the ice berg. Protect your tax information in the same manner that you protect your credit cards and checks. If you do not give your credit card numbers, social security card and your bank account information to strangers, then think twice before you give out your tax information to a stranger. It is your duties to safe guard your hard earned property including your identity.

Rule #3: Qualifications do matter. If the person preparing your taxes is under a tax authority for example a state board, the IRS or any authoritative body, it is more likely than not that your taxes will be prepared right. In my opinion an authoritative body works to make sure that

a) The tax preparer is knowledgeable in the corresponding field,

b) That the prepare operates under certain guidelines and does not break the law

c) That you, the client, have an avenue of redress

This is important to you. Ask your tax preparer about their qualifications and about where you can file a grievance. Also the tax code changes a whole lot during the year. If your tax preparer does not keep up with these changes, then your tax filing could be erroneous.

Point to consider- Do not let the qualifications stop you from seeking help; sometimes tax clients equate higher qualifications with a higher tax filling cost. In fact in most cases CPAs charge less than most off the beat tax preparers and they are better knowledgeable of the tax rules.

Rule # 4: Always double check your tax forms. Make sure that the tax preparer gives you a copy of the tax return. Keep this copy and once the tax return is filed, contact the IRS and get a free transcript of your return. Compare the transcript with the filed return. Always make sure that you retain all documents that support a filed tax return. These documents can be used to respond to the IRS in case of an audit.  Point to note;–The statute of limitation for most tax offences are between 3-6 years.

Rule # 5: Use technologies to your advantage. Just because you are stuck in rural Blunts North Dakota does not mean you cannot access a CPA in Dallas, Texas. With a computer and a few clicks your tax filing will be performed by a professional and you do not have to settle for less even in Boring, MD.

Rule #6: Do not play with the numbers. Some people use math to commit fraud. They figure that is the IRS has over 139 million individual returns to sift through, on average they are unlikely to be audited. Well, if you are stepping on hot coals and your head is in the freezer, then on average you should be just fine!  When your number is picked up, please be ready to support your tax return numbers.

Rule #7: Report all tax fraud. It is your duty and a responsibility to report all Tax fraud to the IRS and/or to the local police.

In addition to the above “rules” please remember “a stitch in time saves nine”

I hope the above “rules” will help you avoid very costly mistakes. Please reach out to us with any comments and questions. If we cannot help you, we know someone that can.

Please visit us at www.njengacpa.com and /or email the author at info@njengacpa.com for more information

 

The author is the President and Principal Accountant of Daniel Njenga CPA LLC. He is a Certified Public Accountant (CPA) – Texas State Board and a Certified Internal Auditor (CIA) – Institute of Internal Audit and a graduate of both the University of Virginia McIntire Business School and the University of Texas Arlington College of Business.

 

Posted in Kenya | Tagged: , , | 10 Comments »

 
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