EAST ST. LOUIS PRIVATE SECURITY BUSINESS OWNER INDICTED BY FEDERAL GRAND JURY ON MULTIPLE FRAUD CHARGES
A federal grand jury has returned a 37-count Indictment against Kim L. McAfee, 47, of East St. Louis, Ill.-, owner and operator of private security company KLM Loss Prevention, Inc. McAfee was indicted on sixteen counts of making a false statement, fifteen counts of mail fraud, three counts of wire fraud, and three counts of falsifying records in a federal investigation, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
If convicted, McAfee faces five years imprisonment on each of the fifteen false statement charges, a fine of up to $250,000, and 3 years supervised release. He faces twenty years imprisonment on each of the mail fraud, wire fraud, and falsification charges, a fine of up to $250,000, and 5 years supervised release. The Indictment alleges that McAfee engaged in a scheme in which he falsified records claiming to pay more money to his employees than he was actually paying under contracts with School District 189 and the East St. Louis Housing Authority, which allowed McAfee to fraudulently retain money due to his employees. The Indictment also alleges that, following a Department of Labor investigation, McAfee underpaid his employees for overtime and that McAfee failed to pay back pay but provided false records purporting to show that he had paid his employees the back pay.
On June 24, 2011, McAfee was arraigned on the charges. At that time, the district court set conditions of bond that include a prohibition against possession of a firearm and that McAfee may not discuss these criminal charges with his employees or any other witnesses except through counsel. McAfee was also admonished that any attempt to harass or intimidate witnesses may constitute a new federal crime.
Trial is scheduled for August 23, 2011.
The charges filed in this case follow a lengthy investigation by the U.S. Department of Labor, Office of Inspector General-Office of Labor Racketeering and Fraud Investigations, the U.S. Department of Housing and Urban Development, Office of Inspector General, the Internal Revenue Service - Criminal Investigation, and the Federal Bureau of Investigation . The prosecution is being handled by Assistant United States Attorney Kevin F. Burke.
An indictment is a formal charge against a defendant. Under the law, that charge is merely an accusation and the defendant is presumed innocent unless proven guilty.