OFFICE OF THE UNITED STATES ATTORNEY
WESTERN DISTRICT OF MISSOURI
Contact Don Ledford, Public Affairs ● (816) 426-4220 ● 400 East Ninth Street, Room 5510 ● Kansas City, MO 64106
MAY 6, 2010
FOR IMMEDIATE RELEASE
ASH GROVE WOMAN PLEADS GUILTY TO MONEY LAUNDERING
RELATED TO CITY OF NIXA THEFT
BOUGHT, SOLD LABRADOR RETRIEVERS WITH
PROCEEDS OF FRAUD
SPRINGFIELD, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced that an Ash Grove, Mo., woman pleaded guilty in federal court today to money laundering in relation to a scheme to defraud the city of Nixa of $482,365.
Paula K. Covington, 53, of Ash Grove, waived her right to a grand jury and pleaded guilty before U.S. District Judge Richard E. Dorr this afternoon to a superseding information that charges her with money laundering. Under the terms of today’s plea agreement, the government will dismiss the charges against her contained in a federal indictment.
Covington admitted that she used the proceeds of a scheme to defraud the city of Nixa in order to purchase American Kennel Club-registered Labrador retrievers and a four-hole, homemade dog trailer. When her husband was arrested on state charges on Feb. 24, 2009, she contacted the owner of Lone Oak Retrievers and directed him to immediately sell three of the dogs.
On March 3, 2009, the owner of Lone Oak Retrievers sold three of the dogs. Covington directed him to remit the $10,881 in proceeds to another person’s account at Liberty Bank. On March 6, 2009, $10,640 was withdrawn from the Liberty Bank account and used to purchase two cashier’s checks totaling $10,636. Both of the cashier’s checks were made payable to Advanced Bail Bonds of Ozark, Mo., for the purpose of posting bond for Covington’s husband.
By pleading guilty today, Covington admitted that the money from the sale of the dogs represented the proceeds of mail fraud. She also admitted that the financial transactions involved – including the wire transfer of funds into Liberty Bank and the withdrawal of the funds in order to purchase the cashier’s checks to pay the bonding company – was designed to disguise the fact that the money from the fraud scheme against the city of Nixa was used to post bond.
On Aug. 27, 2009, co-defendant David W. Griggs, 45, of Willard, Mo., pleaded guilty in federal court to his role in a series of mail fraud and money laundering schemes totaling more than $756,000. Griggs pleaded guilty to conspiracy to commit mail fraud, theft from an organization receiving federal funds, and conspiracy to commit money laundering. Griggs was employed by the city of Nixa as a utility worker in the city’s street department from Nov. 6, 2003, to Feb. 8, 2006. He was promoted to be the lead utility worker on Aug. 4, 2004.
Under the terms of today’s plea agreement, the government and Covington agree to a sentence of one year and one day. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Nixa, Mo., Police Department, the Federal Bureau of Investigation and IRS-Criminal Investigation.
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