Former nixa employee sentenced for mail fraud, theft and money laundering
admits role in schemes totaling $756,000
SPRINGFIELD, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced that a former employee for the city of Nixa, Mo., was sentenced in federal court today for his role in a series of mail fraud and money laundering schemes totaling more than $756,000.
David W. Griggs, 45, of Willard, Mo., was sentenced by U.S. District Judge Richard E. Dorr to two years and eight months in federal prison without parole. The court also ordered Griggs to pay $272,718 in restitution, and to forfeit to the government $756,010 and a 1999 Dutchman travel trailer, which were obtained from the proceeds of the offenses.
On Aug. 27, 2009, 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.
Co-defendant Larry W. Covington, 50, of Ash Grove, Mo., pleaded guilty on June 1, 2010, to his role in the conspiracy to defraud the city of Nixa. 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 and Covington 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. Griggs admitted that he conspired with others to conduct financial transactions involving the proceeds of the mail fraud.
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.
Covington also admitted that he participated in a mail fraud conspiracy related to financial transactions involving the proceeds of the mail fraud.
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.
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.
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