FOR IMMEDIATE RELEASE May 21, 2012
FOUR PLEAD GUILTY IN AEP POWER SURGE SCAM
CHARLESTON, W.Va. – Four 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”). Jonathan Shaffer, 33, of Charleston, Tiffany Shaffer, 24, of Charleston, W.Va., Bryan P. Javins, 34, of Nitro, W.Va., and Jeanette Boggs, 58 also of Nitro, each pleaded guilty before United States District Judge John T. Copenhaver, Jr. to the felony offense of mail fraud.
The defendants admitted that they colluded with Deborah Farmer, a former AEP property damage claims adjuster, to unlawfully obtain money from AEP by submitting fraudulent claims for power surge damage. Farmer, 47, formerly of Winfield, pleaded guilty in April to conspiracy to commit mail and wire fraud. Farmer admitted that she arranged the scheme and conspired with others to unlawfully obtain money from the power company by submitting the fraudulent claims. Two other co-defendants, Julia Washington and Freda Bradshaw have also pleaded guilty to their role in the offense and likewise await sentencing.
A two-year investigation revealed that false claims were filed with AEP related to power surge damage to homes. Mr. and Mrs. Shaffer, Mr. Javins and Ms. Boggs all admitted that they committed mail fraud when they received the fraudulent checks through the mail. These defendants cashed the checks, then took a part of the payoff – usually half of the proceeds, giving the rest back to Ms. Farmer or other defendants.
The defendants further admitted to receiving checks ranging from $4,000 to as much as $13,000 per fraudulent claim at various times between March 2009 and March 2010. A total of 57 fraudulent claims were filed resulting in a loss to AEP of approximately $598,485.
Each defendant faces up to 20 years in prison and a $250,000 fine when they are sentenced on August 16, 2012. All defendants agreed to restitution based on the total number of claims checks they cashed. Mr. Shaffer agreed to pay $44, 929.79 and his wife, Ms. Shaffer agreed to pay $33, 075.32. Mr. Javins agreed to pay $20, 945 and Ms. Boggs agreed to pay $25, 724. The Court will fix the final amount of restitution owed by each defendant at sentencing.
The Federal Bureau of Investigation (FBI), United States Postal Inspection Service and West Virginia State Police are handling the investigation. Assistant United States Attorney Erik S. Goes is in charge of the prosecution.