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NEWS RELEASE

OFFICE OF THE UNITED STATES ATTORNEY

WESTERN DISTRICT OF MISSOURI


JOHN F. WOOD


Contact Don Ledford, Public Affairs ● (816) 426-4220 ● 400 East Ninth Street, Room 5510 ● Kansas City, MO 64106

www.usdoj.gov/usao/mow/index.html


JUNE 5, 2008

FOR IMMEDIATE RELEASE


SEDALIA BUSINESS OWNER INDICTED FOR EMBEZZLING

FROM EMPLOYEE 401(k) PLAN


FUNDS SPENT ON PRIVATE AIRPLANE, BOAT, VEHICLES,

$100,000-PLUS ANNUAL SALARY


            KANSAS CITY, Mo. – John F. Wood, United States Attorney for the Western District of Missouri, announced that the owner of a Sedalia, Mo., business was indicted by a federal grand jury on charges related to embezzling nearly $86,000 from the company’s employee benefit plan.


            Raymond A. Potts II, 51, of Sedalia, was charged in an 11-count indictment returned by a federal grand jury in Kansas City on Wednesday, June 4, 2008. Potts is the owner of Potts Contracting Group, Inc., a Sedalia industrial and commercial construction firm that specializes in government contracting.


            According to the federal indictment, Potts and his firm sponsored an employee pension benefit plan – a 401(k) retirement plan – with Potts serving as the fiduciary of the plan. From Sept. 30, 2003, until May 30, 2007, Potts allegedly failed to forward a total of $85,936 in prevailing wage fringe benefits to the plan. Instead of forwarding employee fringe benefit monies to the plan, the indictment alleges, Potts kept the money for his own use and benefit.


            During this time period, the indictment alleges, Potts paid a number of luxury expenses from his business bank account from which funds should have been transferred to the pension plan, including payments for a private airplane, a boat, Kansas Speedway tickets, a Chevrolet Avalanche truck, a Mercedes Benz for his wife, a Volvo for his wife and various gifts and party expenses. Also during the same time period, the indictment says, Potts received an annual salary in excess of $100,000 from that account.


            The federal indictment also charges Potts with four counts of making false statements regarding an employee benefit plan. Potts allegedly made false statements in the annual reports filed with the Department of Labor in order to conceal his embezzlement. Potts is also charged with six counts of mail fraud related to mailing the fraudulent reports as well as mailing fraudulent Statement of Compliance documents that falsely claimed prevailing wage fringe benefits were being paid to his employees performing work at Whiteman Air Force Base in 2003.


            Wood cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.


            This case is being prosecuted by Assistant U.S. Attorney Roseann Ketchmark. It was investigated by the Department of Labor, Employee Benefits Security Administration.



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This news release, as well as additional information about the office of the United States Attorney for the Western District of Missouri, is available on-line at

www.usdoj.gov/usao/mow/index.html