Zenith Carex International, an Abuja-based logistics and freight forwarding firm is in the news again for the wrong reason.
This time, the Donald Trump-led U.S. government has fined Chemonics International Inc. $3.1 million over the fraudulent activities of its Nigerian subcontractor, Zenith Carex International.
Zenith Carex has been accused of inflating its bills, massively overcharging U.S. Agency for International Development (USAID) for distributing sensitive HIV/AIDS treatment packages.
Chemonics International has also agreed to pay the fine.
USAID had awarded the contract of delivering certain healthcare products to Chemonics, which later hired Zenith Carex for last-mile delivery (LMD) and long-haul delivery (LHD) services to execute the contract.
Zenith Carex International is said to have inflated its invoices to deliver the products which include HIV test reagents, a financial crime that lasted for years specifically between May 2017 and March 2020.
The company is owned by Dr. Adelana Olamilekan serving as the managing director/CEO of the company
Investigations revealed that the Nigerian company overcharged Chemonics based “on truck tonnage as opposed to the weight per kilogram of the commodity transported.”
Chemonics which did not immediately suspect foul play passed all the fraudulent bills to USAID for payment.
The U.S. government condemned Chemonics, particularly that the company “acted recklessly in failing to detect fraudulent charges by” Zenith Carex which must have had inside help to perpetrate the fraud.
“Government contractors must exercise responsible oversight and management of their subcontractors to ensure contract compliance and appropriate billing,” Principal Deputy Assistant Attorney General Brian M. Boynton said in a statement on December 19, 2024.
Chemonics was able to identify an employee suspected of colluding with Zenith Carex International to inflate invoices. The company fired the suspect, a move that convinced prosecutors that the Washington-based contractor was not in on the fraud.
Still, USAID asked Chemonics to pay $3.1 million in a settlement agreement as consequences for its laxity to conduct proper checks and balance.
“Today’s settlement demonstrates the department’s commitment to hold accountable those who knowingly or recklessly submit false claims for payment to the United States no matter where in the world the underlying conduct occurs,” Mr Boynton added.
Special agent Sean Bottary in charge of the case said the settlement was proof that justice will always be served and cannot be limited by borders.
“This settlement underscores that justice has no borders, and that USAID’s contractors and grantees must have systems in place to detect and prevent false invoices submitted by subawardees,” Mr Bottaru said.
