Former Bay Springs City administrator sentenced to prison for federal crimes related to embezzlement of city funds

 

Date: March 4, 2021

Contact: newsroom@ci.irs.gov

Hattiesburg, MS — Randy James, the former City Clerk of Bay Springs in Jasper County, was sentenced today before U.S. District Judge Taylor McNeel, for the federal crimes of money laundering and making false statements on a federal tax return, announced Acting U.S. Attorney Darren J. LaMarca, Special Agent-in-Charge James E. Dorsey of the Internal Revenue Service – Criminal Investigation (IRS-CI), Atlanta Field Office, and Mississippi State Auditor Shad White. James pleaded guilty and was convicted on October 7, 2020, by Senior U.S. District Judge Keith Starrett.

James was sentenced to serve a total of 50 months in federal prison with a 30-month sentence for money laundering and a 20-month sentence for tax evasion to be served consecutively. Upon his release from federal prison James also was sentenced to serve an effective total of 3 years of supervised release with a 3-years of supervised release for money laundering and 1-year of supervised release for tax evasion to be served concurrently.

Additionally, James was ordered to pay restitution in the amount of $420,561.84, with $265,561.84 of that amount being owed to the Office of the Mississippi State Auditor on behalf of the City of Bay Springs; $95,000.00 being owed to the IRS; and, $60,000.00 being owed to RLI Surety, which had been the bonding surety company for the City of Bay Springs. Finally, James also was ordered to pay $30,200.00 in fine and special assessments.

During 2017 and 2018, Randy James was employed by the City of Bay Springs, Mississippi, as City Clerk, and had control over certain financial aspects of the city. During this time, James embezzled just over $300,000 from Bay Springs between August 2017 and April 2018 by creating fraudulent invoices from fictitious companies for the costs of false services that were never approved or incurred by the city.

James diverted city funds by obtaining checks from the City of Bay Springs, cashing the checks at a local bank, and wiring those funds overseas to international scammers in the hope of winning money in a lottery scheme. James also made false statements on his personal 2018 Federal Income Tax Return by under-reporting gross receipts by $193,331.00.

The State Auditor's Office previously issued a demand letter to James for $325,562 which included the amount of his embezzlement, plus interest and investigative costs. In his publicly filed plea agreement with the U.S. Attorney's Office, James agreed to pay a total of $420,562 in restitution. Acting U.S. Attorney LaMarca commended the federal, state and local law enforcement cooperation displayed in this case. The case was investigated by the Internal Revenue Service – Criminal Investigation and the Mississippi State Auditor's Office. The case was prosecuted by Assistant U.S. Attorney Stan Harris.