A Kenyan man based in California has been sentenced to 10 years in federal prison for embezzling more than $36 million from his employer’s client and then using the bulk of the illicit gains to pay off tens of millions of dollars in credit card debt.
Paul McDaniel, 44, a.k.a. “Edward Martin Karuku,” who resided in Orange before fleeing the United States to Costa Rica over four years ago, was sentenced by United States District Judge John A. Kronstadt. McDaniel pleaded guilty in September 2019 to one count of wire fraud
For more than seven years, McDaniel embezzled the funds from Hypermedia Systems Inc., a media technology services firm based in downtown Los Angeles. McDaniel initially was an independent contractor for, and then an employee of, E-Times Corp., a downtown Los Angeles-based professional services firm that provided accounting assistance to Hypermedia Systems. McDaniel 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
According to the Justice Department, while working with Hypermedia, McDaniel formed a Nevada corporation with a name like one of Hypermedia’s vendors and then opened a bank account – which he controlled – in that entity’s name. He then used his authority as Hypermedia’s accounting manager to approve and direct tens of millions of dollars’ worth of payments to this bank account.
Court documents seen by African Warrior Magazine show that to justify the payments, McDaniel 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 the end, McDaniel caused more than $36 million to be fraudulently transferred by wire or check from Hypermedia to the bank account he controlled. McDaniel used the ill-gotten gains to pay off $23 million in credit card bills and transferred another $8 million to his personal bank accounts.
As part of his sentence, McDaniel was ordered to pay $36,332,388 in restitution to Hypermedia
In 2017, McDaniel fled to Costa Rica where FBI acting on a tip off arrested him, and processed his extradition to the United States.