Aug. 21 , 2006

 

WOMAN PLEADS GUILTY
TO MONEY LAUNDERING
IN $650,000 GROCER FRAUD CASE

KANSAS CITY, KAN. – A woman who is one of four defendants charged with defrauding a Kansas City, Kan., wholesaler pleaded guilty Monday to four counts of money laundering.

Arlene Francis, 45, Parkville, Mo., pleaded guilty during a hearing before U.S. District Judge Carlos Murguia.

“Ms. Francis knowingly conducted financial transactions meant to conceal the source and the control of funds that had been unlawfully obtained from Associated Wholesale Grocers,” said U.S. Attorney Eric Melgren.

In her plea, Francis admitted that Associated Wholesale Grocers, a business based in Kansas City, Kan., paid more $650,000 in fraudulent invoices for products and goods it never received.

Francis was one of four defendants including Aponte Gomez, 45, Parkville, Mo., William Morrison, 42, Escambia, Fla., and Crystal Hall, 25, Barling, Ark.,who were charged in July in a 31-count indictment alleging wire fraud, money laundering, witness tampering and obstructing a criminal investigation. The crimes were alleged to have occurred at various times in 2002, 2003, and 2004 in Johnson County, Kan.

Associated Wholesale Grocers, 5000 Kansas Ave. in Kansas City, Kan., is the nation’s second largest retailer-owned grocery wholesaler, serving more than 1,500 stores in 21 states. In her plea, Francis admitted that Gomez, Morrison and Hall devised a scheme to defraud the wholesale grocer by submitting fraudulent invoices from an entity called Innovative Cleaning requesting payment for products and services the wholesale grocer never received. As a result of the scheme, the conspirators illegally obtained more than $652,549. Innovative Cleaning operated no warehouse or other legitimate businesses at its addresses and was not registered or licensed to do business in Missouri.

In her plea, Francis admitted that:

– On Aug. 30, 2002, she used the alias Arlene Protzek to become a signatory on Innovative Cleaning’s account at People’s Bank, 10307 Metcalf, Overland Park, Kan.
– From October 2002 through June 2003, she provided William Morrison with deposit and withdrawal slips and signed blank checks drawn on her account at Mission Bank, 5201 Johnson Drive, Mission, Kan. She allowed Morrison free access to the account.
– Between Aug. 30, 2002, and Oct. 21, 2002, Francis withdrew more than $7,000 from the Innovative Cleaning account, which she provided to Morrison to conceal the fact he was receiving money from the Innovative Cleaning account.

“She was aware that the money involved in the financial transactions represented the proceeds of unlawful activity,” Melgren said.
Francis faces a maximum penalty of 20 years in federal prison and a fine up to $500,000 on each count. Sentencing is set for Nov. 13. Trials are pending for the other defendants.

Melgren commended The Federal Bureau of Investigation, which prepared the case, and Assistant U.S. Attorney Sheri McCracken, who is prosecuting.

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