State Consortium Director Sentenced to 15 1/2 Years in Prison for $7.3 Million Fraud Conspiracy
BIRMINGHAM – A federal judge today sentenced the former state director of a college consortium of business development centers to more than 15 years in prison for conducting a multi-million-dollar fraud against the State of Alabama, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Pat Maley and IRS Criminal Investigation Special Agent in Charge Rodney E. Clarke.
A federal jury convicted MAURICE WILLIAM CAMPBELL JR. in November on charges of conspiracy, fraud and money laundering in a scheme to use his position as director of the Alabama Small Business Development Consortium to obtain more than $7 million from the state. Campbell used much of the money he stole from the state to fund a lavish lifestyle that including buying expensive dinners, clothing and gifts for a cadre of young women that he named the “Little Sisters.”
The jury convicted Campbell on all 96 counts of the indictment against him, which included conspiracy to defraud the state and a private non-profit institute he incorporated, and to make financial transactions intended to conceal the proceeds of the fraud. The convictions also included three counts of mail fraud, 56 counts of wire fraud and 36 counts of money laundering.
U.S. District Judge Abdul K. Kallon sentenced Campbell, 60, of Rainbow City, to 15 years and eight months in prison and ordered him to pay $5.9 million in restitution to the State of Alabama and to forfeit $7.6 million to the federal government as proceeds of illegal activity.
“Campbell’s sentence is an appropriate one,” Vance said. “Prosecutions like this send a strong message that corruption will not be tolerated in this community.”
“Each year, millions of federal and state taxpayers’ dollars are allocated to government agencies in Alabama, and we necessarily trust that employees of those agencies will use the funds for their intended purposes,” Maley said. “Mr. Campbell chose to abuse the public’s trust by stealing taxpayers’ money to fund his lavish lifestyle. Citizens should expect that government officials will perform their duties honestly, and the sentence imposed on Mr. Campbell today demonstrates that the justice system will stand up to their expectations,” he said.
“Today's sentencing is a direct result of the outstanding relationships between IRS-CI, the FBI and the U.S. Attorney’s Office in combating violations of federal law," Clarke said. "This sentence should serve as a deterrent to those who might contemplate similar fraudulent actions. The appearance of success can, in some instances, mask a tangled web of financial lies. This was certainly true in this case. Financial crimes can thrive for a time, but eventually the scheme unravels and those responsible are caught,” he said. “Law-abiding citizens in Alabama can be reassured today that no one is above the law and individuals who actively participate in fraudulent schemes will be brought to justice.”
Last year, three other individuals admitted their guilt in Campbell’s criminal enterprise. They fully cooperated in the investigation and testified at Campbell’s trial.
The co-defendants are: LAUREN YOUNG, 34, head of marketing for the Alabama Small Business Development Consortium, who pleaded guilty to wire fraud and filing false tax returns. Young was sentenced earlier this month to 10 months in prison and ordered to pay the state $195,000 in restitution; MICKIE DAVIS, 50, bookkeeper for the Alabama Small Business Institute of Commerce, who pleaded guilty to conspiracy, wire fraud and filing false tax returns. Davis was sentenced in February to two years in prison and ordered to forfeit $7.3 million to the federal government as proceeds of illegal activity; and BENJAMIN JOHNSON, 36, executive director of the Institute of Commerce, who pleaded guilty to conspiracy and filing false tax returns. Johnson was sentenced in February to 21 months in prison and ordered to forfeit $5.7 million to the federal government.
According to trial testimony, Campbell and his co-defendants conducted the fraud and money laundering as follows:
Campbell was hired as state director of the Small Business Development Consortium in January 2003. The Consortium was composed of four-year universities in the state, a procurement technical center and an international trade center. Each of the universities had its own small business development center. The Consortium’s purposes were to enhance economic growth, provide management and technical assistance to small businesses, and develop Alabama’s workforce.
About February 2005, Campbell incorporated the Alabama Small Business Institute of Commerce. Campbell was the president, a director, the initial registered agent, and the incorporator of the Institute. The stated purpose of the Institute was to enhance economic development, increase employment, and reduce business failure in Alabama through business education and workforce training.
The Institute was formed as a nonprofit, with the representation that the corporation would not be operated for private profit, nor its assets at any time be used to benefit any shareholder, member, director, trustee, officer or other individual.
The Institute received nearly all of its funding from the state through grants, contracts and appropriations in the education budget. From 2005 through 2010, the private nonprofit Institute received more than $7.3 million in public funds to provide, among other services, education and training to Alabama workers.
Campbell and his co-defendants used the state funds provided to the Institute for personal gain. They created a number of other entities – into which state funds provided to the Institute were deposited and later spent – in order to conceal the source, ownership, and control of those funds.
Special agents with IRS-Criminal Investigation and the FBI investigated the case. Assistant U.S. Attorneys Tamarra Matthews-Johnson and George A. Martin prosecuted the case.
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The Office of U.S. Attorney
Joyce White Vance
Natural Disaster Fraud Hotline
Members of the public can report fraud, waste, abuse or allegations of mismanagement involving disaster relief operations through the Hotline, toll free, at (866) 720-5721 or the Disaster Fraud e-mail at firstname.lastname@example.org. Please see the News Release Justice Department Officials Raise Awareness of Disaster Fraud Hotline