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Case Number: 4:19-cr-00688-DPM
Judge: D. P. Marshall Jr.
Court: United States District Court for the Eastern District of Arkansas (Pulaski County)
Plaintiff's Attorney: United States Attorney’s Office
Description: Little Rock, Arkansas criminal defense lawyers represented defendants charged with conspiracy to defraud the government.
Four women, all sisters, were involved in a scheme to defraud the U.S. Department of Agriculture out of over $11.5 million that was intended to benefit farmers who had been discriminated against. Lynda Charles, 72, of Hot Springs; Rosie Bryant, 74, of Colleyville, Texas; Delois Bryant, 75, of North Little Rock; and Brenda Sherpell, 72, of Gainesville, Texas, each pleaded guilty to conspiracy to commit mail fraud and to defraud the Internal Revenue Service
The four defendants admitted in court that from 2008 until 2017, they solicited people to file false claims asserting they were discriminated against when they tried to get assistance from USDA for their farming operations. A fifth defendant, Niki Charles, is the daughter of Lynda Charles. A sixth defendant, Everett Martindale, worked as an attorney and acted as the legal representative for most of the claimants that the five women recruited. Both Niki Charles and Martindale are set for trial.
The sisters also admitted that they hired a tax preparer to falsify tax returns, resulting in failure to report over $4.6 million to the Internal Revenue Service. That tax preparer, Jerry Green, pleaded guilty in January 2021.
As documented in plea agreements, the defendants submitted claims related to two matters: 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 2008 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 litigation originated when 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 alleges 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 alleges 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 Green admitted that Green provided tax preparation services for the claimants they had 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 buy numerous homes and other real properties, a Chevrolet van, and a Mercedes G550. Under the plea agreement, the sisters are required to relinquish any claim to the vehicles immediately and repay, by time of sentencing, the fraud money they used to buy the real properties.
The investigation is being conducted by USDA-OIG and IRS 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.
Outcome: 07/07/2022 NOTICE OF DOCKET CORRECTION re 229 Preliminary Order for Forfeiture of Property. CORRECTION: The docket text was modified to correct the description to include "Certified copy to USMS". (kbc) (Entered: 07/07/2022)
07/07/2022 241 (This is a TEXT ENTRY ONLY. There is no pdf document associated with this entry.) NOTICE OF HEARING CANCELLED as to Niki Charles and Everett Martindale: To better manage the Court's schedule, the pretrial scheduled on 22 July 2022 is cancelled and will be reset by separate notice. (slb) (Entered: 07/07/2022)