The following examples of public corruption investigations are written from public record documents on file in the court records in the judicial district in which the cases were prosecuted.

Former Director of Linden Housing Rehabilitation Program Sentenced to 60 Months in Prison for Taking Bribes

On September 22, 2009, in Trenton, N.J. Frank Rose, former field representative for the City of Linden’s Neighborhood Redevelopment Program, was sentenced to 60 months in prison and ordered to pay $189,000 in restitution to the U.S. Department of Housing and Urban Development (HUD). Rose pleaded guilty in February 2008, and admitted to accepting more than $180,000 in corrupt cash payments and other benefits in exchange for giving favorable treatment to certain contractors.  According to court documents, Rose took cash in exchange for exercising and agreeing to exercise his official influence in favor of the contractors’ companies. He also pleaded guilty to filing a false income tax return.  Also sentenced today was Walter Zawacki, a partner in Zawacki Construction, a construction and maintenance business. Zawacki was sentenced to three years of probation with six months of home confinement, plus ordered to pay a fine of $29,000. Zawacki had pleaded guilty and admitted that he was among the contractors who paid bribes to Rose in exchange for Rose’s official assistance and influence in awarding housing rehabilitation contracts.

Illinois Mayor’s Assistant Sentenced for Misapplication of Property and Filing False Income Tax Return

On September 11, 2009, in Fairview Heights, Ill., Linda Connor, of Belleville, Illinois, was sentenced to 36 months in prison, three years of supervised release and ordered to pay restitution of nearly $370,000 to the Village of Washington Park and more than $60,000 to the Internal Revenue Service (IRS).  Connor was indicted in March 2009 on charges of filing a false federal tax return and misapplication of property.  According to court documents, Connor served as Treasurer and the Mayor’s Assistant for the Village of Washington Park.  She embezzled and intentionally misapplied more than $369,000 from employee pension funds and caused the village to file bankruptcy in July 2009.  Connor also filed a false 2006 tax return that understated her income by $190,000.

Administrator of the Lackawanna County's Workers Compensation Fund Sentenced to 70 Months in Prison

On August 13, 2009, in Scranton, Pa., Charles A. Costanzo, of Dunmore, Pennsylvania, was sentenced to 70 months in prison and ordered to pay in excess of $500,000 in restitution. Costanzo was convicted on April 22, 2009 after a three-day trial for fraud, money laundering, and tax charges in connection with the administration of the Lackawanna County Workers’ Compensation fund. According to the Superseding Indictment, from on or about November 11, 2004, and continuing until on or about September 5, 2005, Costanzo conspired with Marc Boriosi to misappropriate approximately $647,260 of Lackawanna County funds. Boriosi previously pleaded guilty to conspiracy and tax evasion in connection with the scheme. Boriosi is awaiting sentencing.

Former Florida County Sheriff Sentenced to 71 Months in Prison

On August 11, 2009, in Pensacola, Fla., Charles W. Morris, former Okaloosa County Sheriff, was sentenced to 71 months in prison, to be followed by three years of supervised release, and ordered to pay $212,537 in restitution and a $600 special assessment.  Morris pleaded guilty in May 2009 to charges of conspiracy to commit theft of programs receiving Federal funds, by converting to their own use and the use of others property and funds of Okaloosa County and of the Sheriff’s Department; stealing, fraudulently obtaining, converting to the use of others, and misapplying over $5,000 of those funds; conspiracy to commit money laundering; engaging in monetary transactions and property derived from specified unlawful activity; and conspiracy to commit theft of honest services by means of wire fraud.  According to court documents, while the incumbent Sheriff of Okaloosa County, Morris and his then-Director of Administration and Finance and co-defendant, Teresa Adams, created fictitious bonuses to sheriff’s department employees. Sheriff’s Office employees were directed to return all or a portion of the bonuses in the form of cash and cashier’s checks under the pretense that these returned funds were to be used for charitable purposes. Morris’ plea was incident to a “Plea and Cooperation Agreement” and includes Morris’ commitment to surrender all forfeitable assets to the United States or agencies designated by the United States.

Former Detroit Police Officer Sentenced On Tax Evasion

On August 5, 2009, in Detroit, Mich., Vincent Crockett, a former Detroit Police Officer was sentenced to 16 months imprisonment, followed by two years supervised release. The court also ordered Crockett to pay $14,547 in restitution to the Internal Revenue Service (IRS) and cooperate in filing accurate 2007 tax returns.  According to court records, in 2007, Crockett received over $72,000 in income from criminal activities.  He later made cash deposits with some of the proceeds into different bank accounts in amounts less than $10,000, in order to avoid the filing of currency transaction reports. Crockett knew that this income was taxable and he failed to report it to the IRS on his 2007 federal income tax return.

Former Louisiana Film Commission Director Sentenced in Bribery Scheme

On July 29, 2009, in New Orleans, La., Mark S. Smith, an attorney and former Director of the Louisiana Film Commission, was sentenced to 24 months in prison, to be followed by three years of supervised release, and ordered to pay a $67,500 fine. According to court documents, Smith pleaded guilty in September 2007 to a two-count Bill of Information charging him with conspiracy and bribery in connection with a program receiving federal funds. Smith admitted that between 2003 and 2005, while serving as Director of the Louisiana Film Commission, he approved fraudulently inflated movie budgets submitted by a film production company in order for the film company to receive state tax credits. In return, Smith accepted cash bribes totaling over $65,000. Additionally, Smith admitted that a businessman wrote corporate checks to a third party who cashed the checks and passed the cash to Smith. 

Former Pennsylvania State Senator Sentenced on Fraud, Tax, and Corruption Charges

On July 14, 2009, in Philadelphia, Pa., Vincent J. Fumo, former Pennsylvania State Senator, was sentenced to 55 months in prison. Fumo and three of his aides were indicted in February 2007 on numerous charges of fraud, tax offenses, and obstruction of justice. According to court documents, from 1999 to 2005, Fumo, along with defendant Ruth Arnao, the executive director of Citizens Alliance, persistently used funds and employees of Citizens Alliance for their personal and political benefit.  Citizens Alliance for Better Neighborhoods, a nonprofit, tax-exempt organization, was established by Fumo and his aides to improve neighborhoods in the City and County of Philadelphia.  Senator Fumo, aided by Arnao and two Senate computer aides, Leonard P. Luchko and Mark C. Eister, engaged in extensive obstruction of justice, by endeavoring to destroy e-mails and other electronic evidence on Senate and Citizens Alliance computers once they learned of this federal investigation.

Leader of D.C. Property Tax Refund Fraud Scheme Sentenced to 17 ½ Years; Ordered to Pay Over $48 Million

On June 30, 2009, in Washington, D.C., Harriette Monica Walters was sentenced to 210 months in prison and ordered to pay over $48 million in restitution and forfeiture and approximately $16 million in taxes owed to the federal and District of Colombian governments.  Walters pleaded guilty in September 2008 to charges of wire fraud, money laundering conspiracy, federal tax evasion, and District of Columbia tax evasion.  According to the Statement of the Offenses stipulated to by Walters, the scheme to defraud Office of Tax Revenue began in 1989 and lasted eighteen years, until Walters and others were arrested in November 2007. As manager in the Real Property Tax Unit, Walters used her experience and her knowledge of the District of Columbia’s property tax refund process to prepare 226 fraudulent property tax refund vouchers. As the leader, Walters embezzled $48,115,419 from the District of Columbia over the eighteen years of her scheme. She prepared the fraudulent property tax vouchers and then used her position of authority to shepherd the fraudulent vouchers through the approval process. Walters procured the fraudulently obtained property tax refund checks and gave them to her co-conspirators to deposit or cash. They then split the proceeds of the scheme.  Walters was aided in her ability to distribute the proceeds from the scheme by bringing a bank employee into the conspiracy.  The breadth and scope of Walters’s scheme increased over time. At the beginning of the scheme, Walters prepared individual fraudulent property tax refund vouchers that were in amounts just over $4,000. By the end, in 2007, Walters prepared a fraudulent property tax voucher that was in excess of $500,000. The amount Walters stole each year also generally increased, from $31,734 in 1989 to a high of $8,641,750 in 2004. Harriette Walters is the last of eleven defendants in this scheme to be sentenced; previously sentenced were:

• Jayrece Turnbull was sentenced to 108 months of imprisonment
• Ricardo Walters was sentenced to 78 months of imprisonment
• Richard Walters was sentenced to 51 months of imprisonment
• Walter Jones was sentenced to 78 months of imprisonment
• Patricia Steven was sentenced to 70 months of imprisonment
• Samuel Earl Pope was sentenced to 51 months of imprisonment
• Connie Alexander was sentenced to 46 months of imprisonment
• Robert Steven was sentenced to 46 months of imprisonment
• Alethia Grooms was sentenced to 37 months of imprisonment
• Marilyn Yoon was sentenced to 12 months and 1 day of imprisonment

Former U.S. Army Lieutenant Colonel Sentenced for Role in Fraud Scheme Arising out of Al-Hillah, Iraq

On June 4, 2009, in Trenton, N.J., Debra Harrison, a former lieutenant colonel in the U.S. Army Reserves, was sentenced to 30 months in prison for her participation in a scheme to defraud the U.S. government, the Republic of Iraq and the Coalition Provisional Authority - South Central Region (CPA-SC) in Al-Hillah, Iraq. Harrison was also ordered to serve two years of supervised release following her incarceration and to pay $366,640 in restitution.  Harrison pleaded guilty in July 2008 to one count of honest services wire fraud. At the plea hearing, Harrison admitted that in August 2004 she received a Cadillac Escalade from Philip Bloom, a contractor at the CPA-SC. The Escalade was financed through a series of wire transfer payments, which form the basis of the wire fraud charge. Harrison also admitted that she took more than $300,000 from the CPA-SC while deployed there and that she used some of the stolen money to make improvements at her home.  Harrison also admitted that in July 2004 she helped to move unregistered firearms from a hotel in North Carolina to the home of Robert Stein, a co-conspirator who worked with Harrison at the CPA-SC. Stein was sentenced on January 29, 2007, to nine years in prison and ordered to forfeit $3.6 million. He pleaded guilty on February 2, 2006, to conspiracy, bribery, money laundering, possession of machine guns and being a felon in possession of a firearm for his role in the scheme to defraud the CPA-SC. On February 16, 2007, Bloom was sentenced to 46 months in prison and ordered to forfeit $3.6 million.  Lt. Col. Bruce Hopfengardner was sentenced in July 2007 to serve 21 months in prison and ordered to forfeit $144,500.

Veteran Florida County Commissioner Sentenced in Public Corruption Probe

On June 4, 2009, in West Palm Beach, Fla., Mary B. McCarty, of Delray Beach, Fla., was sentenced to 42 months in prison, to be followed by three years of supervised release.  McCarty pleaded guilty in March 2009 to an Information charging her with a mail and wire fraud conspiracy to deprive the citizens of Palm Beach County of their intangible right to her honest services as a county commissioner.  As described in the charging document, and as the defendant admitted at her plea, McCarty engaged in a pattern of defrauding the public of her honest services as an elected official, by misusing her position as a Commissioner on the Palm Beach County Board of County Commissioners (BCC), to personally enrich herself, her husband, and their associates through a series of municipal bond transactions and through her receipt of gifts and gratuities from entities and persons doing business before the BCC.  Further, McCarty advocated and voted on numerous matters before the BCC while she concealed her true financial interests, received significant and material gifts and gratuities from individuals and entities doing business before the BCC, and failed to file or filed incomplete or false disclosure reports to conceal from the public her true financial interests.

Businessman and Former Oklahoma Legislator Sentenced in Kickback Scheme

On May 28, 2009, in Muskogge, Okla., Michael Don Mass, former Oklahoma state lawmaker, was sentenced to 24 months in prison for his role in a kickback scheme. Oklahoma businessman Steven R. Phipps was sentenced to 12 months and one day in prison. According to court documents, Phipps admitted he paid three legislators, including Mass, kickbacks to steer state taxpayer money toward his companies.  Both defendants pleaded guilty to conspiracy to defraud the United States. The charging document alleges that the purpose of the conspiracy was to steer funds appropriated by the Oklahoma state legislature to an entity known as the Rural Development Foundation (RDF) which then provided the funds to National Pet Products and Indian Nations Entertainment (INE) Corporation. Phipps agreed to periodically pay Mass and two other legislators a percentage of the gross income from the gaming machines that were manufactured by INE as a result of funds funneled through RDF. Mass and the other legislators were referred to as ‘investors’ even though they did not invest any of their own funds with INE. According to court document, Mass and the other two legislators were periodically paid in cash the amount of their agreed percentage of the gross profits from the designated gaming machines and used their influence to help place INE gaming machines in Indian casinos. In addition to the prison sentence, Following their prison terms, Mass and Phipps were ordered to serve two years of supervised release. Phipps was ordered to pay a $50,000 fine and to jointly pay with Mass $279,258 in restitution.

Former State Senate Computer Aide Sentenced to 30 Months in Prison for Obstruction of Justice

On May 20, 2009, in Philadelphia, Pa., Leonard Luchko, of Collingdale, PA, a former employee of Senate Democratic Computer Services, was sentenced to 30 months in prison, to be followed by three years of supervised release, and ordered to pay a $1,000 fine and $2,900 special assessment.  Luchko pleaded guilty in August 2008 to 29 counts of conspiracy and obstruction of justice. The criminal charges were a result of efforts by Luchko and others to thwart a federal investigation of Pennsylvania State Senator Vincent J. Fumo; Citizens Alliance for Better Neighborhoods (Citizens Alliance), a nonprofit organization controlled by Fumo; and other companies and individuals associated with Fumo and Citizens Alliance.  According to court documents, Luchko and other conspirators endeavored to destroy e-mail and other electronic evidence in order to prevent the FBI, the IRS, and the federal grand jury from receiving or reviewing such evidence in the course of the investigation. Luchko, along with his co-defendants and others, worked exhaustively to destroy electronic evidence.

Former Alabama State Senator Sentenced for Conspiracy, Bribery, and Money Laundering

On May 19, 2009, in Birmingham, Ala., Samuel P. Pettagrue was sentenced to five years probation, with the first 12 months to be served in home detention, and ordered to pay $306,909 in restitution. On May 15, 2009, former State Senator Edward B. McClain was sentenced to 70 months in prison, to be followed by three years supervised release, and ordered to pay $306,909 in restitution.  McClain was convicted by a jury in January 2009 for charges involving conspiracy, mail fraud, bribery, and money laundering.  According to court documents and trial evidence, McClain conspired with Pettagrue, a former pastor of Sardis Baptist Church, who controlled Heritage to Hope Foundation, Inc. (HTHF), a nonprofit entity.  From April 2001 to November 2006, McClain and Pettagrue conspired to defraud the State of Alabama and its citizens of their right to McClain’s honest services.  McClain used his official position in the Alabama legislature to ensure that “pass through” grants, funded through discretionary funds administered by the Alabama Department of Economic and Community Affairs (ADECA), would be awarded to the HTHF.  Pettagrue made bribe payments to McClain upon receipt of the state funding, fraudulently labeling the payments as “consulting fees” or “wages” in an effort to conceal their true, corrupt nature.  Between May 2001 and January 2003, McClain engaged in official acts to secure over $370,000 in grants to HTHF and received over $170,000 in payments back from Pettagrue.  In February 2003, the Governor of Alabama issued Executive Order No. 05, which placed significant restrictions on the use of “pass through” grants.  From that point forward, the conspiracy and scheme shifted from the use of direct grants to the funneling of taxpayer money through various community colleges, via public contracts, to HTHF – and then to McClain.  McClain repeatedly engaged in official acts and misused his official position in order to secure funds for HTHF and received corrupt payments during the scheme. 

Former South Tucson Police Officer Sentenced for Theft and Tax Evasion

On April 10, 2009, in Tucson, Ariz., former South Tucson Police Lieutenant Richard R. Garcia was sentenced to 33 months in prison. Garcia pleaded guilty on January 26, 2009, to charges of theft from an organization receiving federal funds, as well as to subscribing and filing false income tax returns. As a condition of his guilty plea, Garcia was ordered to pay $254,318 in restitution to the City of South Tucson and $200,244 in restitution to the Pima County Anti-Racketeering Fund. He was also ordered to file amended tax returns with the Internal Revenue Service (IRS). Garcia admitted that between February 24, 2004 and May 21, 2008, he stole $560,177 in property or funds intended for the City of South Tucson and the Pima County Anti-Racketeering Fund. According to court documents, he kept $454,963 and failed to file tax returns on the money taken during tax years 2004 through 2007.  Garcia admitted that he stole cash and cashed checks made payable to the City of South Tucson Police Department to fund his gambling habit. After the execution of search warrants in May 2008, $10,795 remained in one bank account Garcia used and was returned to the City of South Tucson. Agents also discovered that Garcia had secretly paid back over $94,000 into the city’s general fund throughout the course of the thefts.

Indiana Political Insider Sentenced to 6 1/2 Years

On March 31, 2009, in Hammond, Ind., Robert J. Cantrell was sentenced to 78 months in prison to be followed by three years of supervised release.  In addition, the court ordered Cantrell to make restitution in the amount of $68,000 to North Township Trustee. Cantrell was indicted in 2007 on 11 felony counts, including insurance fraud, filing false tax returns and depriving the public of honest services.  In June 2008, after a seven day trial, a jury convicted Cantrell on all counts. According to court documents, from 2000 until 2006 Cantrell was a public servant, employed by Indiana's North Township in various capacities including Supervisor, Liaison to Trustee, Inter-Agency Liaison and Office Manager.  While employed by North Township, Cantrell concealed and failed to disclose to North Township that he had a financial interest in contracts between Addiction and Family Care (AFC) and North Township. AFC was hired by the North Township Trustee's office to provide counseling services to employees and clients of government entities.  Cantrell illegally received payments from AFC for helping the company win contracts with government entities.  Cantrell also profited by convincing AFC to fraudulently provide health insurance for two people who were not on AFC's payroll.  Additionally, over a four year period, Cantrell failed to report the cash payments he  received from AFC on his tax returns.

Former Kodak Employee, Real Estate Appraiser and his Wife Sentenced for Defrauding Eastman Kodak Company and Tax Fraud

On February 19, 2009, in Rochester, N.Y., three individuals were sentenced for their roles in defrauding Eastman Kodak Company, IBM, Global Crossing, ITT Industries, Inc., and the taxpayers of Greece, New York. John Nicolo, a real property appraiser, was sentenced to 12 years in prison; Nicolo's wife, Constance Roeder, was sentenced to probation; and David Finnman was sentenced to 21 months in prison. The defendants were convicted by a jury on various federal charges including money laundering, conspiracy, mail and wire fraud and tax fraud. According to court documents, during the years 1997 through 2005, Finnman, while working at Kodak, hired Nicolo to perform real property appraisal services for Kodak in connection with many Kodak properties. In return for hiring Nicolo, Finnman would receive money representing kickbacks from Nicolo. In addition to the kickbacks received by Finnman, the trial established that the Greece Town Assessor also received payments from Nicolo in connection with various property tax assessment matters involving property located in Greece. While there were several schemes proven at trial, the largest scheme involved the Town Assessor accepting bribes in return for reducing the real property tax assessment for Kodak property located in Greece. Kodak had property located in Greece known as Kodak Park. The indictment also contained forfeiture allegations against Nicolo and Finnman. The government seized over $12 million in assets during the investigation. Additionally, a forfeiture money judgment was ordered against Nicolo in the amount of $9.7 million and against Finnman in the amount of $140,000.

Former Chicago Alderman Sentenced on Mail Fraud and Tax Fraud Charges

On February 17, 2009, in Chicago, Ill., former Chicago 20th Ward Alderman Arenda Troutman was sentenced to 48 months in prison for mail fraud and tax fraud. According to the plea agreement, Troutman admitted that she and others acting for her, solicited payments and other things of value from persons who sought her support for a specific land use, zoning change, or alley access. Troutman admitted that over a five year period, she used her official position to coerce $21,500 in kickbacks from developers to support their projects in her south side ward and in one case outside her ward. According to the plea agreement, Troutman made it clear that her support for the developer's project would either not be forthcoming or would be delayed if she was not paid. Troutman also failed to report as other income on her tax return, at least $10,000 in cash that she received. She also listed her total income as being $77,801, when it was actually substantially more than that. The court ordered Troutman to forfeit $20,000 in kickbacks she received. Troutman was also ordered to repay $5,000 in government funds obtained during the commission of the offense.

Former Oklahoma State Auditor Sentenced to Prison for Conspiracy to Defraud the United States

On January 26, 2009, in Muskogee, Okla., former Oklahoma State Auditor Jeff McMahan and his wife, Lori McMahan, were sentenced to 97 months imprisonment and 78 months imprisonment, respectively. The McMahans were found guilty in June 2008 by a federal jury of conspiring with each other and with others to engage in interstate travel in aid of racketeering and conspiracy to defraud the United States. Trial evidence showed that the defendants received bribes and gratuities in exchange for favorable treatment by Jeff McMahan. During Jeff McMahan’s campaign for Oklahoma State Auditor, Jeff McMahan, Lori McMahan and others, on McMahan’s behalf, received cash, jewelry, other items of value and straw contributions which far exceeded the legal limits of allowed contributions.

Former Bank Manager Sentenced to Over Six Years in District of Columbia Property Tax Refund Fraud Scheme

On January 5, 2009, in Greenbelt, Md., Walter Jones, of Essex, Maryland, was sentenced to 78 months in prison, followed by three years of supervised release, and ordered to pay $17,941,817 in restitution.  Jones was sentenced for conspiracy to commit money laundering in connection with a property tax refund scheme in which over $48 million were stolen from the District of Columbia Office of Tax and Revenue.  According to his plea agreement, Jones was employed by a bank, first as a banking center service manager, and then as an assistant manager.  Jones met Harriette Walters in 1994 or 1995 when she was a bank customer.  Walters gave Jones monetary gifts of approximately $1,000 per gift, for assisting with her banking transactions.  At the request of Harriette Walters and other co-conspirators, between 2000 and 2006, Jones deposited 61 fraudulently obtained District of Columbia government checks totaling $17,941,817.  On several occasions, Harriette Walters called Jones to tell him that someone would be arriving at the bank with a District of Columbia government check and provided Jones with instructions as to how the proceeds of the checks should be distributed.  For example, in October 2006, Jones prepared 15 cashier’s checks payable to other co-conspirators or businesses at the direction of Richard Walters, who had deposited a $460,000 District of Columbia government check at the bank.  Jones received cash gifts, including gifts of $25,000, $50,000 and $100,000, from coconspirators in exchange for processing these fraudulent checks. In all, Jones received a total of at least $366,000 for his assistance in the scheme.

Former County Tax Collector Sentenced For Tax Evasion

On December 12, 2008, in St. Louis, Mo., Danny Wayne Gladden was sentenced to 27 months in prison for failing to report more than $300,000 of funds he embezzled as Crawford County Collector.  According to testimony presented at trial, Gladden was elected as the Crawford County Collector in March 1991.  In that position, he was responsible for collecting taxes, maintaining records of the collections, and disbursing the funds to the Crawford County Treasurer.  Gladden was responsible for preparing the deposit slips and depositing the collected funds to the Crawford County Collector’s account at the bank.  He did not permit other employees to share this responsibility, and he was the only person who reconciled the bank account.  In 2001, Gladden began to embezzle funds by taking cash tax payments from the amounts collected by the Crawford County Collector’s office. Gladden used the illegally obtained cash to pay his personal living expenses or deposited into his personal bank accounts. During 2005, the Missouri State Auditor’s Office audited the Crawford County Collector’s Office. The audit showed that between March 2001 and February 2005, over $300,000 was missing from the Crawford County Collector’s bank accounts. The audit also discovered that the missing funds had been concealed through Gladden’s use of an annual separate tax payment known as the “Private Car Tax,” which are taxes collected by the State on railroad cars which travel through the state. Gladden received and deposited these payments into the Collector’s bank account.  This helped conceal the shortage from the regular tax payments received in the Collector’s Office.  They should have been paid to the Crawford Treasurer. For the tax years 2001 through 2004, Gladden failed to disclose the embezzled income which resulted in $82,645 additional tax.

Former Housing Rehabilitation Director in New Brunswick Sentenced to 87 Months for Taking $112,500 in Bribes

On December 10, 2008, in Newark, N.J., William Walker, the former director of housing rehabilitation for the city of New Brunswick, was sentenced to 87 months in federal prison for extortion and tax evasion for accepting bribe payments and free home renovations from contractors in exchange for contracts. Walker was ordered to pay $112,500 in restitution to the federal Department of Housing and Urban Development, which subsidizes the New Brunswick housing program. Walker pleaded guilty on April 30, 2008, and admitted that he accepted bribes from two contractors and failed to report the approximately $112,500 in corrupt cash payments on his federal tax returns for tax years 2004, 2005 and 2006. He pleaded guilty to one count of extortion under color of official right and one count of tax evasion. According to his plea agreement, Walker admitted that between about January 2004 and September 2006, he had agreements with two construction and maintenance contractors doing business with the city of New Brunswick – Friendly Maintenance, based in Middlesex County, and Taj Maintenance, based in Perth Amboy. Walker admitted that he accepted monthly cash payments of between $1,000 and $3,500 in exchange for his rewarding contracts to Friendly Maintenance valued at more than $1.3 million. Walker admitted that, with Taj Maintenance, he initially accepted cash payments of about 7 percent of the value of each rehabilitation contract he awarded the company. In 2006, he said he began accepting about $2,000 per month from Taj Maintenance. In exchange for the corrupt payments, Walker admitted that Taj Maintenance received rehabilitation payments of more than $900,000 from the city of New Brunswick.

Former Police Officer Sentenced to 120 Months

On December 8, 2008, in East St. Louis, Ill., Mickey Dooley, a former police officer of the Alton Police Department, was sentenced to 120 months in prison, to be followed by three years of supervised release, and ordered to pay $48,738 in restitution.  Dooley was convicted on September 15, 2008, by a trial jury on charges that include making false statements, wire fraud, misapplication of property, and failure to file a tax return.  According to trial evidence, Dooley at one time served as that Alton Police Department’s Evidence Custodian.  An audit of the evidence vault revealed the disappearance of money that had been seized and retained as evidence in federal bank robbery prosecutions.  Dooley was found guilty of taking the stolen money from the evidence vault and converting it to his personal use.

Former IRS Employee and Wife Sentenced in D.C. Property Tax Refund Fraud Scheme

On December 8, 2008, in Greenbelt, Md., former IRS employee Robert O. Steven was sentenced to 46 months in prison, and his wife, Patricia A. Steven, was sentenced to 70 months for conspiracy to commit money laundering and receipt of stolen property. They were sentenced for their part in a property tax refund scheme in which over $48 million were stolen from the District of Columbia Office of Tax and Revenue. The Stevens’ were ordered to each pay $8.8 million in restitution and to forfeit three Jaguar cars, two residences, jewelry and monies held in four bank accounts. According to the plea agreements, Patricia Steven first met Harriette Walters, a former manager within the District of Columbia Office of Tax and Revenue, in the mid-1970s. By the late 1980's, Harriette Walters proposed that Patricia Steven deposit a check drawn on a District of Columbia government bank account and made payable to Patricia Steven. Walters explained that Steven would be allowed to keep a portion of the proceeds from the check, but would have to return a substantial portion to Walters. Despite knowing that Walters obtained the check fraudulently, Patricia Steven agreed and deposited the first check. Robert and Patricia Steven opened a clothing design business called “Bellarmine Design” that never grossed more than $15,000 in a single year. From 1990 to 2007, Patricia Steven and Harriette Walters made 67 deposits of fraudulently obtained District of Columbia government checks or cash proceeds from the scheme into a Bellarmine Design checking account maintained by Steven and Patricia Steven. The individual checks ranged in amounts from a handful of initial deposits over $4,000 each, to deposits of up to $490,000. Patricia Steven also transferred at least $344,700 to Harriette Walters. Patricia and Robert Steven transferred at least $1,709,500 of these funds into another bank account used primarily by Robert Steven.

Former Secretary and Treasurer of the Board of Education for Prince George's County Sentenced to 6 Years on Fraud and Obstruction of Justice Charges

On November 25, 2008, in Greenbelt, Md., Andre J. Hornsby was sentenced to 72 months in prison, followed by three years of supervised release, and ordered to pay fines totaling $20,000 and restitution of $70,000.  In July 2008, Hornsby was convicted by a federal jury of honest services wire fraud, witness and evidence tampering and obstruction of justice arising from a scheme to cause the Prince George’s County Public Schools (PGCPS) to award lucrative contracts to benefit close associates and himself.  Hornsby served as Chief Executive Officer and Secretary and Treasurer of the Board of Education for Prince George’s County (Board) beginning in June 2003 until his resignation in May 2005.  According to court documents, Hornsby received kickbacks from E-Rate and LeapFrog contracts with the PGCPS system.  Hornsby owned and operated Quality Schools Consulting, Inc. (QSCi), which assisted schools in preparing applications to secure funds under the federal E-Rate program. Cynthia Joffrion assisted Hornsby in providing these services and purportedly operated a non-existent company, Erate Managers D.B. Inc.  Testimony at trial showed that as a result of Hornsby’s intervention, PGCPS issued a purchase order to Erate Managers.  Hornsby and Joffrion agreed that Hornsby would receive half the proceeds from the E-Rate contracts.  During one meeting between Joffrion and Hornsby, Hornsby took $1,000 in cash as a down payment and proposed various methods to evade detection of the payments, including arranging for Joffrion to purchase valuable items for him such as property, a truck, art and a yacht.  LeapFrog Enterprises, Inc. (LeapFrog) developed and marketed technology-based educational products.  In May 2004, Hornsby directed that PGCPS establish a summer program for kindergarten students who were being held back, and suggested using LeapFrog products. After receiving proposals from the Maryland sales representative for LeapFrog, PGCPS personnel recommended using a LeapFrog package for 33 classrooms.  The LeapFrog representative was Sienna Rochelle Owens.  Evidence in court showed that Owens paid Hornsby $10,000 in cash for his assistance in securing the LeapFrog contract.  Testimony at trial showed that Hornsby made false statements to conceal any kickbacks on the LeapFrog and E-Rate contracts. After the news of the federal investigation, Hornsby instructed PGCPS personnel to destroy back-up computer tapes containing his and other employee email.  Additionally, Hornsby attempted to persuade Joffrion, who was cooperating with the FBI, not to produce the computer files from the Compaq computer used by Owens to create the commission-share agreement, which had subsequently been sent to Joffrion, as requested by a grand jury subpoena.  Sienna Owens, who testified at trial, pleaded guilty to endeavoring to impede the internal revenue laws for failing to report the commission income from the LeapFrog contract. She is awaiting sentencing.

Former Executive Director of the Alabama State Fire College Sentenced to Over 10 Years in Prison

On October 29, 2008, in Birmingham, Ala., William Luther Langston, the former executive director of the Alabama State Fire College, was sentenced to 125 months in prison and ordered to pay $1.4 million in restitution. Langston was found guilty in June 2008, on a 38-count indictment which charged mail fraud, wire fraud, conspiracy, money laundering conspiracy, and theft from an organization receiving federal funds.   According to court documents, Langston was an Alabama state employee who served as the executive director for the Alabama Fire College (Fire College). He was responsible for the overall management of the Fire College and as such, he signed contracts and obligated state funds for the college. In addition, Langston served as the president and as chairman of the Alabama Fire College Foundation (Foundation) Board of Directors. Langston used his various positions with the Fire College and its Foundation to divert approximately $65,000 in Foundation funds for his personal benefit and for the benefit of family members and friends. From January 1998 until June 2006, Langston and co-conspirators put relatives of friends on the Fire College payroll and did not require them to provide services commensurate with their pay. He also obtained employment contracts and agreements for his two children at other Alabama Department of post-secondary institutions and provided documents and other assistance so that his relatives could obtain money from these institutions. Langston was also found guilty for the diversion of discretionary funds directed by co-conspirator Bryant Melton, a former member of the Alabama House of Representatives. These funds were diverted into the Foundation and then dispersed back to Melton through phony scholarships to Melton’s daughter. From May 2003 until August 2004, Langston diverted approximately $100,000 of state money from the Fire College and Shelton State to pay for his house. Langston and others attempted to conceal that state funds were being used by hiring contractors who did work for the Fire College or Shelton State to work on the house. For several of the final counts, Langston was found guilty for the diversion of state funds to co-conspirator Robert Lloyd Nix through Access Group, Inc, a computer software firm that did business with the Fire College, and through the Poison Center.

Former North Carolina County Sheriff and Co-Defendants Sentenced on Charges of Corruption, Extortion, and Money Laundering

On October 6, 2008, in Asheville, N.C., Bobby Lee Medford, the former sheriff of Buncombe County, was sentenced to 180 months in prison, to be followed by three years of supervised release, and ordered to forfeit $287,776 in proceeds of his criminal activities, and to pay a $1,100 special assessment. Medford was convicted at trial in May 2008 of conspiring to extort money from persons involved in the illegal video poker machine business beginning October 1, 2000 and continuing through December 3, 2006. Medford was convicted of depriving the citizens of Buncombe County of the right to his honest services while employed as sheriff and as a sheriff’s special deputy for Buncombe County. Medford was also convicted of conspiring to obstruct local or state law enforcement and of conspiring to commit money laundering.  Also sentenced this week were three of Medford’s codefendants: John David Harrison, Ronnie Eugene Davis, and Guy Kenneth Penland. Harrison, a former lieutenant at the Buncombe County Sheriff’s Office, was sentenced to 30 months in prison, followed by three years of supervised release. Davis was sentenced to 60 months in prison to be followed by three years of supervised release. Penland was sentenced to 60 months in prison to be followed by a three year term of supervised release. Court documents show that Medford and his co-defendants received over $300,000 in bribe payments from various video poker machine operators. According to testimony presented at the trial, the corruption scheme involved multiple methods of extorting cash by Medford and his sheriff’s office co-defendants, including: that companies registering machines in the county pay bribes to get those machines registered; the solicitation of cash payments under the guise that the payers were sponsoring teams at the twice-yearly golf tournaments put on by Medford and his deputies; and more direct demands that the poker operators bring cash in to Medford and his co-defendants. Testimony at trial also established that Medford and several of his deputies engineered a scheme in 2006 to convert cash payments into money orders, in false names, in order to convert these bribes into funds that could be deposited into his re-election campaign account.

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