January 25, 2001
Thomas L. Strickland, United States Attorney for the District of Colorado, Stanley M. Vann, Special Agent In Charge, IRS_Criminal Investigation, and Gregory Egan, Regional Director of the United States Department of Labor Pension and Welfare Benefits Administration, today announced the Indictment of JERRY A. BURNETT, currently of Midway, Utah, for 11 counts of wire fraud, 3 counts of mail fraud, 1 count of false tax return and 1 count of failure to file a tax return. BURNETT was the president of PROsera, Inc. (later known as PROsera CMI, Inc.), an employee leasing company.
According to the Indictment, PROsera agreed to establish and maintain an Employee Benefit Plan for the employees it leased to client companies. PROsera's clients agreed to make payments that would go toward worker salaries as well as contributions to the benefit plan. BURNETT, the president of PROsera, also was the trustee of the benefit plan.
The indictment alleges that from April 4, 1994, through December 1, 1997, BURNETT failed to maintain a separate trust account for contributions to the Employee Benefit Plan and converted approximately $468,302.16 of those contributions for his own use and for the benefit and use of others.
According to the indictment, BURNETT also prepared, and delivered to insurance companies, false monthly reports that under represented the amounts of money that PROsera had expended as payroll.
BURNETT also allegedly caused the company responsible for providing administrative services to fail to pay healthcare claims which employees and health care providers had submitted pursuant to the benefit plan.
The Indictment also alleges that BURNETT failed to report $50,370.50 of income on his 1995 federal income tax return and failed to file a federal tax return for 1996, when he had an estimated gross income of $209,840.87.
"Hard working Coloradans are entitled to rely on the sanctity of their benefits," United States Attorney Thomas Strickland said. "Protecting employee benefits and prosecuting those who divert employee benefit plan funds for their personal use is a priority to the United States Attorney's Office," Strickland said.
If convicted BURNETT faces not more than 5 years in prison and/or a fine of up to $250,000 per count for counts 1 through 14, not more than 3 years in prison and/or a fine of up to $100,000 for count 15, and not more than 1 year in prison and/or a fine of up to 25,000 for count 16.
The indictment contains only allegations and the defendant is presumed innocent unless and until proven guilty.