carthage apartmentmanager pleads guilty to fraud,
money laundering, false tax return
SPRINGFIELD, Mo. – David M. Ketchmark, Acting United States Attorney for the Western District of Missouri, announced that a Carthage, Mo., apartment manager pleaded guilty in federal court today to a nearly $400,000 fraud scheme involving several apartment complexes.
Barbara J. Evans, 54, of Carthage, waived her right to a grand jury and pleaded guilty before U.S. Magistrate Judge James C. England to a federal information that charges her with one count of wire fraud, one count of money laundering and one count of filing a false tax return.
Evans was employed as a property manager for Preservation Housing Management (PHM), which is based in Boston, Mass., and owned the Deerfield Village, Highland Acres, Highland Meadows and Maplewood Manor apartment complexes in Carthage. PHM oversees these properties through its office in Kansas City, Mo.
Stolen Rent Scheme at Deerfield Village
When a low-income tenant rented an apartment at Deerfield Village and qualified for Section 8 rental assistance/subsidies, Evans generally calculated the move-in rent amounts correctly. However, when tenants reported an increased income, instead of reflecting the increased rent in the computer system, she delayed reporting the increased rent to PHM. As a result, tenants would pay the correct, higher rent amount to Evans, but Evans continued to provide the lower rent payments to PHM. Evans pocketed the difference between the higher rent payments she received from tenants and the lower amounts she passed on to PHM.
From 2003 through 2011, Evans fraudulently received net proceeds of approximately $206,069 from this scheme.
Construction Fraud Scheme
In May 2006, PHM discovered that Meeco Construction, a contractor hired by Evans to perform work on Deerfield Village and Maplewood Manor, was owned by her husband, Mike Evans. Meeco Construction had been performing work on the properties since October 2003. PHM's former president verbally reprimanded Evans and she was instructed to immediately discontinue using vendors related to PHM employees.
In September 2006, Evans, with the help of her daughter, Addison Kinney, created A.J. Construction. Evans created and submitted all A.J. Construction bids and invoices to PHM. PHM policy required two or three competing bids on any construction project over $5,000. Evans, through her capacity as manager, falsified and submitted fictitious competing bids and insurance documents to ensure A.J. Construction would get all of the construction contracts at the HUD subsidized properties she managed. From Sept. 28, 2006, to June 15, 2009, A.J. Construction received $191,922 for work completed at Deerfield Village, Highland Meadows, Highland Acres, and Maplewood Manor. A.J. Construction performed work only for PHM Properties.
Evans knowingly concealed the proceeds of this wire fraud when she purchased and remitted money orders in the tenants' names. Evans admitted that she cashed or deposited tenants’ rent payments into her own bank account, then used those funds to purchase money orders for lesser amounts. Evans forged tenants’ signatures on the money orders and falsely represented those money orders to be their rent payments.
Evans admitted that she filed false federal income tax returns for the years 2006, 2007, 2008, 2009, and 2010 by failing to report $171,790 on her Form 1040, U.S. Individual Income Tax Returns, resulting in a total tax loss to the federal government of $28,737.
Under federal statutes, Evans is subject to a sentence of up to 43 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 HUD Office of Inspector General, the Missouri State Highway Patrol and IRS-Criminal Investigation.