State agency repays vendors in auditor scam [The Charleston Gazette, W.Va.]

Dec. 18--CHARLESTON, W.Va. -- Settlements totaling $1.5 million have been paid by the state Board of Risk and Insurance Management to pay two corporations that were victims of an international scheme to redirect payments to dummy companies.

BRIM Director Chuck Jones confirmed Thursday that the agency made payments of $769,516 to the Department of Health and Human Resources, and $741,401 to the state Insurance Commission so the agencies could complete payments totaling nearly $2 million to Deloitte Consulting and Sedgewick Claims Management Services.

Those payments, from State Auditor Glen Gainer's office, were diverted this summer as part of an international scam that set up dummy corporations to receive electronic payments in excess of $3 million from four states, including West Virginia.

Federal authorities indicted six individuals connected with the scheme. One of them, Angela Chegge-Kraszeski, 33, a native of Kenya who has lived in Raleigh, N.C., for the last few years, pleaded guilty earlier this week to mail and wire fraud.

On Thursday, Gainer announced that the vendors who had been affected by the scam had received the final payments from the state agencies.

The payments include nearly $500,000 of funds recovered by investigating authorities, along with the $1.5 million in BRIM payments.

"I hope now that the vendors have been made whole, the agencies involved will join with me in urging our insurer to seek recovery from both the entities that allowed these fraudulent accounts to be created, and those that bear the contractual responsibility for the losses related to these electronic payments," Gainer said in a statement issued Thursday.

Jones said BRIM is conducting its own investigation to determine if the agency can recover some of the $1.5 million in settlements it paid out.

"We're exploring and investigating ourselves to determine who's responsible," he said. "We'll see if we're able to recover anything from anybody."

The defrauded companies filed claims this summer seeking the payments due.

Gainer at the time said the Auditor's Office was not liable for the payments, citing a state law that prohibits the office from paying the same invoice twice.

Jones said any more funds recovered as part of the ongoing investigation should come back to BRIM to offset the settlement payments.

Reach Phil Kabler at philk@wvgazette.com or 304-348-1220.

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