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US jails Kenyan who stole Sh3.6 billion from US firm

The Kenyan accountant had fled to Costa Rica from where he was extradited.

Male prisoner talking with his sad wife in prison visit room

A former accounting manager for a Los Angeles firm in US was sentenced to 10 years in prison for embezzling more than Sh3.6 billion from his employer and then using the bulk of the illicit gains to pay off tens of millions of dollars in credit card debt.

According to a statement from the US Department of Justice, Edward Martin Karuku, also known as Paul McDaniel, was sentenced by United States District Judge John A. Kronstadt in April 2021 after pleading guilty.

Court documents showed that for more than seven years, Karuku embezzled the funds from Hypermedia Systems Inc, a media technology services firm based in Los Angeles.

Initially, he was an independent contractor for and then an employee of, E-Times Corporation, a Los Angeles-based professional services firm that provided accounting assistance to Hypermedia Systems.


Karuku was assigned to work at Hypermedia as an accounting manager. As part of his job, he would request payments to be made from a Hypermedia account to pay Hypermedia vendors.

"While working with Hypermedia, he formed a company with a name like one of Hypermedia’s vendors and then opened a bank account which he controlled,"

He then used his authority as Hypermedia’s accounting manager to approve and direct billions worth of payments to the bank account.

To justify the payments, Karuku created more than 100 false and fictitious invoices that appeared to be from actual Hypermedia vendors, falsely stating the goods and services had been provided to the company.


In total, he caused more than Sh3.6 billion to be fraudulently transferred by wire or cheque from Hypermedia to the bank account he controlled.

The accountant used the ill-gotten gains to pay off Sh2.3 billion in credit card bills and transferred another Sh800 million to his personal bank accounts.

As part of his sentence, Karuku was ordered to pay Sh3.6 billion in restitution to Hypermedia.

The accountant had fled to Costa Rica in early 2017, and he was arrested there later that year pursuant to a provisional arrest warrant filed by the United States.

He was extradited to the United States in February 2019 and has been in custody since then.


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