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Case Number: 4:19-cr-00688
Judge: D. P. Marshall, Jr.
Court: United States District Court for the Eastern District of Arkansas (Poluaki County)
Plaintiff's Attorney: United States Attorney’s Office in Little Rock
Description: Little Rock, Arkansas criminal defense lawyers represented Defendants charged with conspiracy to defraud the government in violation of 18 U.S.C. 371.
Seven defendants were sentenced to federal prison for their involvement in a scheme to defraud the U.S. Department of Agriculture out of more than $11.5 million that was intended to benefit farmers who had been discriminated against. Chief United States District Judge D.P. Marshall, Jr. sentenced the defendants earlier today.
As documented in plea agreements, the defendants submitted claims under two programs: the Black Farmers Discrimination Litigation (BFDL) settlement and the Hispanic and Women Farmers and Ranchers (HWFR) claim program. The BFDL settlement resulted from a class action lawsuit filed in 1997 in which a group of black farmers claimed they had been discriminated against when they applied for farm credit, credit servicing, or farm benefits from USDA. Similarly, the HWFR claim program was created after groups of Hispanic and women farmers filed separate lawsuits against USDA, also alleging discrimination in their farm benefit programs.
Both BFDL and HWFR resulted in a claims process where farmers who could show they had applied for participation in a USDA benefit program and believed they had been discriminated against could make a claim for financial relief. A successful claim resulted in an award of $62,500. Of that, $50,000 would be made payable to the claimant, and $12,500 would be transferred directly to the Internal Revenue Service as a tax withholding. Altogether, the sisters were involved with 192 claims, almost all of which were successful, resulting in a loss of over $11.5 million. The claims were false because the claimants had not suffered discrimination and, in most cases, had not even attempted to farm.
The indictment alleged that Martindale would deposit claim checks into his law firm trust account, issue a check from that trust account to the claimant, and withhold his attorney fee. For both BFDL and HWFR, attorney fees were restricted to $1,500 per claimant. The indictment alleged that the four sisters entered an agreement with Martindale in which they would split the attorney fee. The sisters also demanded and received additional money from the claimants themselves.
The money received from a claim was income that should have been reported on the claimant’s tax return. The sisters and their accountant, Green, admitted that Green provided tax preparation services for the claimants they recruited and that Green falsified the tax returns in order to create a tax refund.
Three of the sisters—Lynda Charles, Rosie Bryant, and Delois Bryant—filed false tax returns of their own and used money from the conspiracy to purchase homes and properties, a Chevrolet van, and a Mercedes G550. The United States is pursuing recovery of those assets, and any additional fraud proceeds used to purchase assets, in the criminal case, as well as in a separate civil forfeiture proceeding.
“These sisters defrauded two programs meant to help those that were discriminated against and instead lined their pockets,” said Christopher J. Altemus Jr., Special Agent in Charge IRS Criminal Investigation, Dallas Field Office. “We want every American to take advantage of the programs, deductions, and credits to which they are entitled to by law; however, no one is entitled to defraud the government. Protecting taxpayer money is a matter IRS-CI takes extremely seriously and today’s sentences reinforce our commitment to the public that we will investigate and prosecute those who steal from American taxpayers.”
“Discrimination is real. The 192 settlement claims submitted by these defendants, requesting millions of dollars, were not,” said United States Attorney Jonathan D. Ross. “Today’s sentences send the message that the United States is committed to prosecuting those who steal from programs designed to provide justice for victims of discrimination, and the Court takes seriously crimes such as these. We will continue to seek prison time for fraudsters who re-victimize those the government sought to make whole.”
Special Agent-in-Charge Dax Roberson from the United States Department of Agriculture, Office of Inspector General (USDA-OIG), said, “I want to thank the United States Attorney’s office, USDA-OIG Special Agents, and our investigative partners for their hard work on this investigation. When fraud is committed to deprive proper recipients of USDA funds, OIG will pursue justice to the fullest extent of the law.”
In addition to their sentences of imprisonment, each defendant was sentenced to two years of supervised release following imprisonment, and the defendants were ordered to pay more than $9,000,000 in restitution.
The investigation is being conducted by USDA-OIG and IRS-CI with assistance from the United States Marshals Service and the United States Postal Inspection Service. The case is being prosecuted by Assistant United States Attorneys Cameron McCree, Bart Dickinson, and Amanda Fields.
18:371 Conspiracy to Defraud the Government
Outcome: Everett Martindale, 76, of Little Rock, was sentenced to a year and a day in federal prison. Martindale worked as an attorney and acted as the legal representative for most of the claimants that the five women recruited. Jerry Green, 42, of Grand Prairie, Texas, a tax preparer hired by the sisters to falsify tax returns, was also sentenced to a serve a year and a day.
Niki Charles, 50, of Puerto Rico, was sentenced to serve 16 months in federal prison for her involvement in the fraud scheme. Charles admitted during her guilty plea that she and others solicited people to file false claims, asserting they were discriminated against when they tried to get assistance from USDA for their farming operations. Charles said she verified statements from corroborating witnesses who submitted affidavits to support the claims, but none of those witnesses actually appeared before Charles. Those actions resulted in $4.5 million in loss.
Everett Martindale, 76, of Little Rock, was sentenced to a year and a day in federal prison. Martindale worked as an attorney and acted as the legal representative for most of the claimants that the five women recruited. Jerry Green, 42, of Grand Prairie, Texas, a tax preparer hired by the sisters to falsify tax returns, was also sentenced to a serve a year and a day.