A woman from England, Arkansas has entered a guilty plea for her role in a scheme to defraud the United States Department of Agriculture out of more than $11.5 million.
The money was supposed to be used to help farmers who had been discriminated against in the past. Tuesday in front of Chief United States District Judge D. Price Marshall, Niki Charles, who is 49 years old, entered a guilty plea to the charge of conspiracy to commit mail fraud.
Charles admitted in court today that she and other people encouraged individuals to file false claims asserting that they were discriminated against when they tried to get assistance from USDA for their farming operations. These individuals were solicited by Charles and others.
Although Charles stated that she verified statements from corroborating witnesses who submitted affidavits to support the claims, none of these witnesses actually appeared before Charles to verify the statements. Because of these actions, there was a loss of $4.5 million, which Charles has agreed to make up.
Four additional defendants, all of whom are sisters, have entered guilty pleas in connection with this case. On July 6, 2022, 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, all pleaded guilty to conspiracy to commit mail fraud and to defraud the Internal Revenue Service.
A sixth defendant by the name of Everett Martindale worked as an attorney and acted as the legal representative for the majority of the claimants that were recruited by the five women. Martindale was one of the defendants. On August 30, 2022, Martindale is scheduled to stand trial.
The sisters also admitted that they had hired a tax preparer to file false tax returns on their behalf, which caused them to conceal income of more than $4.6 million from the Internal Revenue Service.
Jerry Green, the tax preparer in question, entered a guilty plea in January of 2021. Those who have entered guilty pleas will be sentenced at a later time by Judge Marshall.
According to the documentation included in their plea agreements, the defendants filed claims concerning two different programs: the Black Farmers Discrimination Litigation (BFDL) settlement and the Hispanic and Women Farmers and Ranchers (HWFR) claim program.
The Black Farmers’ Derivative Litigation (BFDL) settlement was reached as a result of a class action lawsuit that was filed in 1997 on behalf of a group of black farmers who claimed that they had been the victims of discrimination when they applied for farm credit, credit servicing, or farm benefits from the USDA.
Similarly, the HWFR claim program was established after separate lawsuits were filed against the USDA by groups of Hispanic and women farmers who, like the previous plaintiffs, claimed that discrimination existed within the USDA’s farm benefit programs.
Both the BFDL and the HWFR resulted in the establishment of a claims process through which farmers who were able to demonstrate that they had applied for participation in a USDA benefit program and believed that they had been discriminated against were eligible to make a claim for monetary relief.
An amount of $62,500 was granted as compensation after a successful claim. Out of that total, the claimant would be given a check for the amount of $50,000, and the remaining $12,500 would be sent directly to the Internal Revenue Service as a tax withholding.
The sisters were involved in a total of 192 claims, almost all of which were successful, which resulted in a loss of more than $11.5 million.
The allegations were untrue because the claimants had not been subjected to any form of discrimination and, in the majority of cases, had not even attempted farming.
The indictment states that Martindale would deposit claim checks into the trust account of his law firm, and then issue a check from that trust account to the claimant while deducting his attorney fee from the amount of the check. Both the BFDL and the HWFR imposed a cap of $1,500 on each claimant’s share of attorney fees.
The indictment makes the allegation that Martindale and the four sisters entered into an agreement in which they would divide the cost of the attorney. Additionally, the sisters demanded additional monetary compensation from the claimants and were successful in obtaining it.
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The claimant was required to include the money they received from a claim as income on their tax return even though they did not do so.
The sisters and their accountant, Green, admitted that Green had prepared tax returns for claimants that the sisters had recruited, and that Green had lied on those tax returns to generate a tax refund for the sisters.
Lynda Charles, Rosie Bryant, and Delois Bryant, three of the sisters, each filed their own set of fraudulent tax returns and used the money they obtained through the scheme to buy multiple homes and properties, as well as a Chevrolet van and a Mercedes G550.
By the terms of the plea agreement, the sisters are obligated to give up any claim they may have had to the vehicles and to repay the money obtained through fraud that was used to acquire properties. The payment is due by the time that they are sentenced, which has not yet been set as of this writing.
