Edward Martin Karuku, who was Charged with Embezzling $36 Million (Shs 3.6 Billion) from a Company has Been Extradited from Costa Rica
Edward Martin Karuku, alias Paul McDaniel, a former accounting manager is facing 10 wire fraud counts for allegedly embezzling more than $36 million (Shs 3.6 Billion) from his employer’s client and then using the bulk of the ill-gotten funds to pay off tens of millions of dollars of his credit card debt has been extradited to the United States from Costa Rica.
Paul McDaniel, 42, a.k.a. “Edward Martin Karuku,” who resided in the City of Orange before fleeing to Costa Rica in early 2017, arrived in Los Angeles after extradition proceedings in Costa Rica.
Karuku was be arraigned last Friday afternoon in United States District Court.
From July 2009 until December 2016, Karuku allegedly embezzled the funds from Hypermedia Systems, Inc., a media technology services firm based in downtown Los Angeles.
He was initially an independent contractor for and then an employee of E-Times Corp., a downtown Los Angeles-based professional services firm providing 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 purported Hypermedia vendors.
According to the indictment filed in September 2017, during the time he was working with Hypermedia Karuku formed a Nevada corporation with a name similar to one of Hypermedia’s vendors and then opened a bank account – under which he had complete control – in that entity’s name.
He then allegedly used his authority as Hypermedia’s accounting manager to approve and direct payments totaling more than $36 million to this bank account.
To justify the payments, Karuku allegedly created false and fictitious invoices on the letterhead of actual Hypermedia vendors, falsely stating that particular goods had been provided to the company.
The fraudulent payments were wired to the Karuku-controlled bank account.
Karuku used the funds to pay off $23 million (Shs 2.3 Billion) in credit card bills and transferred another $8 million (Shs 800 million) to his personal bank accounts, according to the indictment.
Investigators believe he spent additionally millions of dollars on miscellaneous expenses.
Karuku was arrested in Costa Rica in 2017 pursuant to a provisional arrest warrant filed by the United States. He was held in custody during extradition proceedings.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Each of the 10 counts of wire fraud charges in the indictment carries a statutory maximum penalty of 20 years in federal prison. This case was investigated by the Federal Bureau of Investigation.