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
JUNE 1, 2010
FOR IMMEDIATE RELEASE
FORMER NIXA OFFICIAL PLEADS GUILTY TO $756,000
FRAUD, MONEY LAUNDERING CONSPIRACIES
SPRINGFIELD, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced that the former street superintendent for the city of Nixa, Mo., pleaded guilty in federal court today to fraud and money laundering conspiracies, mail fraud and theft in relation to a scheme to defraud the city of more than $756,000.
Larry W. Covington, 50, of Ash Grove, Mo., pleaded guilty before U.S. District Judge Richard E. Dorr this afternoon to the charges contained in a May 15, 2009, federal indictment.
By pleading guilty today, Covington admitted that he and co-defendant David W. Griggs, 45, of Willard, Mo., participated in a conspiracy to defraud the city of Nixa between Oct. 18, 2004, and Feb. 25, 2009.
Covington was employed by the city of Nixa from March 6, 2000, to Feb. 23, 2009. He was appointed to be the superintendent of the street department on May 6, 2004. Griggs, who has also pleaded guilty, 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.
Covington and Griggs used two fictitious businesses established by Griggs – Airborne Specialist (sometimes referred to as Airborne Specialists) and Tri-State Supply – to invoice the city of Nixa for approximately $273,645 in goods and services for the street department that were never provided. During the course of the conspiracy, 122 fraudulent invoices were submitted to the city.
Covington admitted that he prepared purchase orders for street department supplies that were invoiced by the two fictitious businesses. Covington caused the city to prepare purchase orders and falsely acknowledged receiving the items, which were never actually delivered.
Griggs established separate post office boxes for the two businesses. When the city mailed checks payable to the businesses, they were deposited into business bank accounts and Covington and Griggs split the proceeds.
Covington also admitted that he registered a third fictitious business, Ward & Spooner, which he repeatedly used to invoice the city of Nixa for goods and services that were never provided. Between Dec. 7, 2004, and Feb. 25, 2009, Covington submitted 150 fraudulent invoices totaling $482,365 to the city of Nixa for goods and services that were never provided. Covington repeatedly made false representations to the city that Ward & Spooner would supply goods and services, and falsely represented to the city that goods had been delivered and that services had been performed by Ward & Spooner by signing or initialing fraudulent invoices.
Larry Covington established a post office for Ward & Spooner. When the city mailed checks payable to Ward & Spooner, they were deposited into a business bank account.
Covington also admitted that he participated in a mail fraud conspiracy related to financial transactions involving the proceeds of the mail fraud.
By pleading guilty today, Covington agreed to forfeit to the government $756,010, which represents the proceeds of the offenses, as well as a 1999 Dutchman travel trailer, a 2004 Bombadier Outlander 400, a 2005 flatbed trailer, a 2005 trailer, a Benelli M1 Super 90, a Smith & Wesson .22-caliber long round automatic pistol and a Colt .45-caliber revolver. Covington also agreed to forfeit to the government all benefits held by MO LAGERS, which include a lump sum presently valued at $58,318.
Covington’s wife, Paula K. Covington, 53, of Ash Grove, pleaded guilty to money laundering. She admitted that she used the proceeds of the fraud scheme 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. Paula 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 Larry Covington.
Paula 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 was used to post bond.
Larry Covington is subject to a sentence of up to 70 years in federal prison without parole, plus a fine and an order of restitution. 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