FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC or
MARCIA MURPHY at 410-209-4885
June 12, 2009
FOR IMMEDIATE RELEASE
FORMER GIRLFRIEND OF ANDRE HORNSBY SENTENCED FOR CORRUPTLY
INTERFERING WITH TAX LAWS
Did Not Report Sales Commission She Split with CEO Andre Hornsby
for his Assistance in Securing Contract
Greenbelt, Maryland - U.S. District Judge Peter J. Messitte sentenced Sienna Rochelle Owens, age 30, of Miami Beach, Florida today to 12 months probation, and ordered her to pay $5,200 in restitution and perform 200 hours of community service, for corruptly endeavoring to impede the internal revenue laws by not reporting commission income she earned from a contract with the Prince George’s County Public Schools, announced United States Attorney for the District of Maryland Rod J. Rosenstein.
According to her guilty plea, Owens was an employee of LeapFrog Enterprises, Inc. (“LeapFrog”), which developed and marketed technology-based educational products to retail stores and schools. LeapFrog’s sales to schools were primarily the responsibility of its SchoolHouse Division (“LFSH”). From February to December 2004, Owens was the sales representative for sales to customers in Virginia. While employed by LeapFrog, Owens was engaged in a long-term romantic relationship with André J. Hornsby, with whom she also resided. Hornsby was Chief Executive Officer of the Prince George’s County Public Schools (“PGCPS”), one of the 20 largest school districts in the nation with a budget of more than $1 billion.
In May 2004, PGCPS decided to establish a summer program for kindergarten students who were being held back. Hornsby suggested the use of LeapFrog products for the summer program. After receiving a proposal from the Maryland LFSH sales representative, PGCPS personnel recommended using a LeapFrog package for the summer program in approximately 33 classrooms. But PGCPS did not consummate that deal. Instead, at Hornsby’s request, Owens began preparing a proposal for PGCPS to purchase the LeapTrack system for 216 kindergarten classrooms. Owens and Hornsby personally negotiated a deal that required PGCPS to pay $956,280 for the LeapTrack system.
LFSH generally paid sales commissions to the representative assigned to the territory in which the sale was made. Nevertheless, to personally benefit from the LeapFrog contract, Owens from the outset endeavored to secure a substantial percentage of the commission on the deal. To that end, on June 4, 2004, Owens informed her supervisor that she wanted 70-75% of the commission, or a $25,000 flat fee, later agreeing to receive half of the gross commission, before taxes. To ensure that she received this money, Owens prepared a written agreement that required the Maryland sales representative to pay her half of the commission before taxes. The written agreement admonished in bold letters that “[n]o details of this agreement are to be discussed at any point in time with anyone but the parties listed below” and that “any deviation from this agreement will be subject to appropriate legal action.” On June 11, 2004, Owens met with the Maryland sales representative at a restaurant in Largo, Maryland. Owens provided the agreement to the Maryland sales representative and demanded to be paid half of the commission, before taxes, totaling more than $20,000. The Maryland sales representative agreed to pay $20,000 to Owens.
As Owens instructed, on July 29, 2004, the Maryland sales representative purchased and mailed to Owens a cashier’s check for $20,000 payable to Owens. On August 5, 2004, Owens attempted to negotiate the check by depositing $10,000 into her bank account and receiving the remaining $10,000 in cash. But because bank policy did not permit the receipt of $10,000 in cash immediately, Owens deposited the entire $20,000 into her account. Later that month, Owens withdrew $10,000 from her account and provided the cash to Hornsby in return for his assistance in securing the LeapFrog contract.
When Owens filed her personal tax return with the Internal Revenue Service the following March, she did not report any of the commission income from the LeapFrog contract. The concealment of this income reduced Owens’s taxable income and increased her claimed tax refund by a substantial amount to which she was not entitled.
“The prosecution of individuals who intentionally conceal income is a vital element in maintaining public confidence in our tax system. We should not expect the honest taxpayer to foot the bill for those who hide income from the IRS,” stated C. Andre' Martin, Internal Revenue Service-Criminal Investigation Special Agent in Charge.
Hornsby, age 55, formerly of Mitchellville, Maryland, was convicted on July 23, 2008, of honest services wire fraud, witness and evidence tampering and obstruction of justice, arising from a scheme to cause the Prince George’s County Public Schools to award lucrative contracts to benefit close associates and himself and was sentenced on November 25, 2008 to six years in prison.
United States Attorney Rod J. Rosenstein praised the investigative work performed by the Federal Bureau of Investigation and Internal Revenue Service - Criminal Investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Michael R. Pauze and Stuart A. Berman, who prosecuted the case.