A Kenyan national has been indicted in the United States for his alleged involvement in a $650 million fraud scheme that diverted USAID-funded health supplies meant for HIV treatment, malaria prevention, and family planning programs in Kenya.
The indictment, filed in the U.S. District Court of South Carolina, accuses Eric Ndungu Mwangi and his company, Linear Diagnostics, of systematically stealing HIV test kits and other medical commodities funded by USAID from the Kenya Medical Supplies Authority (KEMSA).
“This was an incredibly complicated investigation, spanning years and an ocean,” said U.S. Attorney Bryan Stirling for the District of South Carolina.
“These defendants jeopardized a vital public health mission and caused a significant loss to the American taxpayers.”
The case has placed renewed scrutiny on KEMSA, which has been under fire for years over allegations of corruption and mismanagement.
According to the indictment, Mwangi is accused of diverting supplies between 2015 and 2019 and selling them to Guyanese businessman Davendra Rampersaud of Caribbean Medical Supplies for over $177,000, Business Insider Africa reported.
Rampersaud allegedly went on to profit further by securing a sole-source contract with the Guyana Ministry of Health using the stolen goods.
Mwangi, who is awaiting trial in Kenya, faces up to 20 years in prison if convicted of the U.S. charges.
Rampersaud was arrested in Miami in 2023, pleaded guilty, and was sentenced to time served, three years of supervised release, and fined $84,000.
Although the indictment does not directly implicate KEMSA, it marks another strain in the relationship between the Kenyan agency and USAID.
The U.S. Attorney’s Office for the District of South Carolina reported that Mwangi and Linear Diagnostics began diverting HIV test kits and other health commodities in 2014, selling them to Rampersaud’s company, Caribbean Medical Supplies, Inc. (CMS).
In 2015, Rampersaud fraudulently obtained a “Letter of Authority” naming him as an authorized distributor, which allowed him to secure a lucrative sole-source deal with Guyana’s Ministry of Health using the stolen medical products.
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In 2021, amid ongoing tensions, USAID severed ties with KEMSA and contracted U.S.-based Chemonics to handle the delivery of its donated medical supplies.
The move caused chaos in Kenya, delaying shipments and leaving HIV drugs stranded at Mombasa Port, which led to critical shortages for patients.
At the same time, KEMSA has faced a series of domestic scandals.
Accusations of COVID-19 fund misuse, a damning 2020 audit report citing “possible fraud,” and the cancellation of a Global Fund mosquito-net tender have all fueled calls for reform.
In response, President William Ruto dissolved KEMSA’s board, suspended its CEO, and pledged comprehensive restructuring to restore accountability and efficiency within the agency.
The Mwangi indictment also comes against the backdrop of U.S. President Donald Trump’s trade-first policy in Africa, which represents a pivot away from traditional medical aid toward trade-focused partnerships.
Trump has argued that African nations must develop self-reliant systems instead of depending on foreign assistance, prompting USAID to scale back direct support for health supply chains across the continent.
African countries have begun adapting to this policy shift. Kenya has increased funding for its public health sector, South Africa is advancing its national health insurance reforms, and Nigeria is emphasizing local pharmaceutical production.
These measures underscore a growing recognition across Africa that sustainable health security must be built on domestic capacity rather than foreign aid, which remains vulnerable to changing U.S. priorities.
For Kenya, the indictment of Eric Ndungu Mwangi serves as a stark reminder of the vulnerabilities within its health supply chain and the urgent need for reform.
As Washington pivots toward trade-driven engagement, Kenya and other African nations face the pressing challenge of maintaining essential health services while pursuing greater accountability, independence, and resilience within their systems.
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Image Credit: CPHDA
