Zenith Carex Fraud: US Firm Chemonics Fined $3.1 Million Over Scandal

A United States-based firm, Chemonics International, has been ordered to pay a $3.1 million fine following its involvement in a fraudulent scheme linked to Zenith Carex, a Nigerian logistics company.

The scandal, which has drawn international attention, stems from a contract awarded under the USAID-funded Global Health Supply Chain Program (GHSCP).

According to reports, Zenith Carex was awarded a contract to provide logistics services for the delivery of health supplies in Nigeria.

However, investigations revealed that the company engaged in fraudulent activities, including falsifying documents and inflating costs. Chemonics, which managed the GHSCP, failed to adequately oversee the contract, leading to the misuse of funds.

The U.S. government, through the U.S. Agency for International Development (USAID), conducted an investigation into the matter, uncovering significant irregularities.

As a result, Chemonics has been held accountable for its lack of due diligence and oversight, resulting in the $3.1 million fine.

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.

Zenith Carex, the Nigerian firm at the center of the scandal, has yet to comment on the matter.

Meanwhile, Chemonics has expressed regret over the incident and pledged to strengthen its internal controls to prevent similar occurrences in the future.