Former Arkansas DHS Employee Pleads Guilty To Accepting Bribes And Conspiracy In Scheme To Steal USDA Funds Intended To Feed Hungry Children
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced today that former DHS employee Gladys Waits, 36, of Little Rock, pled guilty to one count of conspiring to commit wire fraud and one count of receipt of a bribe in connection with USDA funds intended to feed children in low income areas during the school year and summer.
Today’s plea hearing took place in Little Rock before United States District Judge James M. Moody, Jr., who will sentence Waits at a later date.
The United States Department of Agriculture (USDA) funds the Child and Adult Care Feeding Program, which includes an at-risk after school component. USDA also funds the Summer Food Service Program. In Arkansas, the feeding programs are administered by the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. After they are approved, they can provide meals as part of the feeding program, and they are reimbursed for the eligible meals they serve.
Waits worked for DHS, and her responsibilities included processing applications from sponsors who applied to participate in the feeding programs, determining their eligibility, and approving their proposed feeding site(s).
According to the facts read at the hearing, three other co-defendants, Jacqueline Mills, Kattie Jordan and Dorothy Harper, were sponsors of feeding programs from in or about January 2012 to in or about August 2014. Mills was a sponsor and had approved sites in cities including Helena and Marianna, Arkansas. Mills’ programs received more than $2.5 million in federal funds from DHS. Jordan was a sponsor through Save Our Youth and Save Our Community, which had approved sites in cities including Dermott, Dumas, Eudora, and Lake Village, Arkansas. Jordan’s programs received more than $3.5 million in federal funds from DHS. Harper was a sponsor for the feeding programs through Kingdom Land Youth Outreach Ministries which had approved sites in cities including England, Keo, Allport, Tucker, Toltec, Coy and Altheimer, Arkansas and Harper’s program received more than $1.3 million in federal funds from DHS.
Waits was responsible for approving the feeding programs for Mills, Jordan, and Harper at various times from in or about January 2012 to in or about August 2014. Mills and Jordan made bribe payments to Waits. Some bribes were made directly by checks made payable to Gladys Waits or indirectly through payments to her relatives. Mills made some bribe payments via check to Anthony Waits. Harper also made cash payments to Anthony Waits. Anthony Waits is the husband of Gladys Waits.
In exchange for these bribe payments, Gladys Waits, knowing that these sponsors would submit inflated claims, would still approve their applications, which contained the location of the sites and the maximum number of children who would be fed at each site.
During the time described in the Indictment, Mills, Jordan, and Harper all submitted inflated claims for reimbursement to DHS. They claimed that more children were fed at their sites than were actually fed. Because their applications had been approved for a specified number of sites and a specified number of children who could be fed at the sites, inflated claims were approved and paid by DHS without further scrutiny. Gladys Waits also helped Mills, Jordan, and Harper avoid DHS’s detection of the fraud.
Jordan pled guilty to conspiracy to commit wire fraud in connection with the feeding programs and was sentenced to 63 months in prison on March 15, 2016.
Also, according to the facts read at the change of plea, Anthony Waits recruited additional sponsors to participate in the feeding programs. These sponsors gave a percentage of the money received from the feeding programs to Anthony Waits. Christopher Nichols, the Anthony Waits’ nephew, and Reuben Nims, Anthony Waits’ brother-in-law, are two of the recruited sponsors who received payments for inflated claims. Gladys Waits approved those sponsors’ applications. Nichols and Nims have pled guilty in connection with fraud in the feeding programs.
Gladys Waits is the seventh person to plead guilty (see chart below) concerning the theft of USDA feeding program funds for children. The amount of fraud these seven people have admitted to exceeds $5.3 million. Previous charges filed in this investigation detail alleged fraud involving over $10.5 million in USDA feeding program funds.
The statutory penalty for conspiracy to commit wire fraud is not more than 20 years imprisonment, not more than a $250,000 fine, or both, and not more than three years supervised release. The statutory penalty for accepting bribes is not more than 10 years, not more than a $250,000 fine, or both, and not more than three years supervised release.
The investigation is ongoing and is being conducted by the USDA–Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service–Criminal Investigations, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Jana Harris, Allison W. Bragg, and Cameron McCree. If you are aware of any fraudulent activity regarding these feeding programs, please email that information to USAARE.FeedingProgramFraud@usdoj.gov.
Pled guilty, awaiting sentencing
**Kattie Jordan (4:15-cr-00250-JM) —$3.6 million fraud
Francine Leon (4:16-cr-00010-JM) —$1 million fraud
Chris Nichols (4:15-cr-00045-JLH —$333,000 fraud
Erica Warren and Alexis Young (DHS employee) (4:16-cr-015-BSM) —$253,000 fraud
Reuben Nims (4:15-cr-00199-JM) —$182,000 fraud
** sentenced to 63 months’ incarceration, 3 years supervised release on March 15, 2016.
Indicted, awaiting trial
Anthony Waits (4:15-cr-00250-JM)
Tonique Hatton (DHS employee) (4:15-cr-00250-JM)
Jacqueline Mills (4:15-cr-00250-JM)
Dorothy Harper (4:15-cr-00250-JM)
Maria Nelson (4:15-cr-000246-JLH)
Mike Lee (4:15-cr-00149-BSM)
Trial date — May 16, 2016
Trial date — June 6, 2016
Trial date – August 29, 2016