FOR IMMEDIATE RELEASE April 2, 2012
TWO PLEAD GUILTY IN AEP POWER SURGE SCAM
CHARLESTON, W.Va. – Two individuals pleaded guilty today in federal court in connection with a scheme to illegally obtain money through fraudulent claims that were submitted to American Electric Power Service Corporation, Inc. (“AEP”). A former AEP property damage claims adjuster, Deborah Farmer, 47, formerly of Winfield, pleaded guilty before United States District Judge John T. Copenhaver, Jr. to conspiracy to commit mail and wire fraud. Farmer admitted that she arranged a scheme and conspired with several known individuals to unlawfully obtain money from AEP by submitting fraudulent claims for damages. Farmer further admitted that she electronically filed fraudulent claims from either the AEP branch office in located in St. Albans, W.Va., or remotely by computer from her residence in Winfield, W.Va. Farmer’s co-defendant, Julia Washington, 45, of Charleston, also pleaded guilty to conspiracy to commit mail and wire fraud.
The two year investigation revealed that the false claims related to alleged power surge damage. Farmer and Washington both recruited others into the conspiracy in exchange for a cut of the payoff – usually half of the proceeds. In furtherance of the conspiracy, Washington set up an appraisal company, Tri State Service Solutions, which provided fraudulent appraisals to support the power surge claims in some cases. Claims checks, ranging from $2,000 to as much as $25,000 per fraudulent claim, were mailed to several known individuals at various times between March 2009 and March 2010. A total of 57 fraudulent claims were filed resulting in a loss of approximately $598,485.
Both defendants face up to 20 years in prison and a $250,000 fine when they are sentenced on July 3, 2012.
The Federal Bureau of Investigation, United States Postal Inspection Service and West Virginia State Police are handling the investigation. Assistant United States Attorney Erik Goes is in charge of the prosecution.