Baltimore Business Owner Sentenced for Stealing Over $1 Million from Maryland Legal Aid Bureau
Overcharged the Price of Office Supplies for 10 Years
Baltimore, Maryland - U.S. District Judge Catherine C. Blake sentenced Wendell Jackson, a/k/a “Sonny,” age 60, of Westminster, Maryland today to 15 months in prison followed by three years of supervised release for his role in the theft of over $1 million from the Maryland Legal Aid Bureau. Judge Blake also entered an order requiring Jackson to pay restitution of $1.14 million and to perform 100 hours of community service.
The sentenced was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Inspector General Jeffrey E. Schanz of Legal Services Corporation - Office of Inspector General.
The Maryland Legal Aid Bureau is a non-profit organization that provides free civil legal services to persons who cannot afford attorneys. Legal Aid has offices throughout Maryland, with its headquarters in Baltimore. Legal Aid is funded in part by federal appropriations.
Legal Aid had paid for its office supplies for decades under “blanket” agreements by which a certain amount would be paid in advance each year for office supplies. When one of the Legal Aid branch offices needed supplies, a person in the finance department would prepare a requisition or purchase order, and the vendor would draw down on the prepaid amount and send the needed supplies to the Legal Aid office requesting them. This “blanket agreement” supposedly enabled Legal Aid to take advantage of bulk purchase pricing without having to store the supplies on site.
According to Jackson’s plea agreement, Jackson owned a check-cashing business in downtown Baltimore, with a store near Legal Aid’s headquarters. Starting in about 1997 or 1998, Jackson was introduced to Benjamin King, the chief of finance at Legal Aid. At King’s direction, Jackson created a business called “Baltimore Office Supply” to provide supplies to Legal Aid under “blanket” agreements. Because Jackson was not in the office supply business, King showed Jackson where to purchase supplies and how to create invoices supposedly from Baltimore Office Supply to Legal Aid. These invoices were used by Legal Aid’s finance department to process payments to Baltimore Office Supply. The first time Jackson purchased supplies for Legal Aid, he cashed the check King had given him, bought the supplies at retail, and returned the change to King. King told Jackson to keep the change and that the two of them could keep any monies above the actual cost of the supplies they purchased for Legal Aid.
About 10 years later, in early 2008, the Legal Aid’s Chief Operating Officer reviewed the amounts being spent on office supplies and determined that there appeared to be few, if any, controls on the amount prepaid, the amounts of supplies received, or the purchase orders that were created and paid for throughout the years under the blanket agreements. Further investigation revealed that Legal Aid had overpaid for supplies by approximately $1.2 million, about 85% of which went to King. Jackson’s share of the kickback funds was determined to be between $75,000 and $100,000.
Benjamin Louis King, a/k/a “Bennie King,” age 58, of Gwynn Oak, Maryland pleaded guilty to his participation in the scheme and is scheduled to be sentenced on December 14, 2010 at 10:30 a.m.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
United States Attorney Rod J. Rosenstein thanked Assistant United States Attorney Barbara S. Sale, who prosecuted the case.