FEDERAL JURY CONVICTS HUSBAND AND WIFE IN CONSPIRACY TO EMBEZZLE FROM CITY OF GARLAND, TEXAS
Five Defendants Previously Convicted in This Conspiracy That Caused a Nearly $2 Million Loss to the City
DALLAS — Following a three-day trial before Chief U.S. District Judge Sidney A. Fitzwater, a federal jury has convicted Kenneth Wayne Brown and his wife, Leah Michele Brown, of Westminster, Texas, for their roles in a conspiracy to embezzle funds from the City of Garland, Texas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. They were each convicted on one count of conspiracy to commit theft from a program receiving federal funds and each faces a maximum statutory sentence of five years in prison, a $250,000 fine and restitution. Both Kenneth Brown, 50, and Leah Brown, 46, remain on bond. Their sentencing hearings are set for May 18, 2012.
Five defendants have previously been convicted for their roles in the conspiracy. In early December 2011, Duane Milford Stailey, 44, and his wife, Sharon Ware Stailey, 46, both of Leonard, Texas, pleaded guilty to the same conspiracy charge and are scheduled to be sentenced on March 2, 2012 by Judge Fitzwater. In early October 2011, Jerry Don Diviney, 69, of Durant, Oklahoma, pleaded guilty and will be sentenced on March 9, 2012.
The former risk management adjustor for the City of Garland, Patricia Leathers, 63, of Rowlett, Texas, pleaded guilty in December 2010 and is presently serving a 57-month sentence. Her sister, Connie M. Powell, 60, of Garland, pleaded guilty to her role involving checks exceeding $64,000, resulting in a three-year term of probation.
According to trial testimony and case documents, Leathers obtained checks issued by the City of Garland by submitting false claims for reimbursement for damage to vehicles, homes, and landscaping purportedly caused by City trucks or employees. Diviney provided Leathers with names and addresses to use for the false claims and deposited or cashed many of the checks. He then shared the proceeds with Leathers. The Browns and the Staileys negotiated checks payable to themselves and others and returned the bulk of the cash to Diviney and Leathers. The total loss to the City has been determined to be $1,968,479.
The investigation was conducted by the FBI, the Garland Police Department, and the Garland Offices of the City Attorney and Internal Auditor. Assistant U.S. Attorneys Katherine Miller and Brian McKay are prosecuting.
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