Jasper Family Sentenced in DETCOG Conspiracy
LUFKIN, Texas — A Jasper, Texas couple and their daughter have been sentenced to federal prison for conspiracy violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.
Walter Diggles, 66, his wife, Rosie Diggles, 64, both of Jasper, and their daughter, Anita Diggles, 42, of Houston, were convicted on Aug. 3, 2017, of conspiracy to commit wire fraud, wire fraud. Additionally, Walter Diggles was convicted of 11 counts of wire fraud, three counts of theft concerning programs receiving federal funds, and three counts of money laundering (engaging in monetary transactions in property derived from specified unlawful activity, here, wire fraud). Rosie Diggles was also convicted of ten counts of wire fraud and one count of money laundering (engaging in monetary transactions in property derived from specified unlawful activity, here, wire fraud).
Today, Walter Diggles was sentenced to 108 months in federal prison by U.S. District Judge Ron Clark, along with restitution to be paid to the government in the amount of $1,326,049.91. Rosie Diggles and Anita Diggles were each sentenced to 54 months in federal prison and were ordered to pay restitution jointly to the government in the amount of $971,143.57.
According to information presented in court, the defendants devised a scheme to obtain and make personal use of federal block grant funds that Congress appropriated following Hurricanes Rita, Katrina, Ike, and Dolly. These funds were made available to the State of Texas, which in turn contracted with several councils of governments within the state to assist in administering and distributing the funds. Walter Diggles was the Executive Director of the Deep East Texas Council of Governments during this time and used his position to approve inflated billing rates and requests for reimbursement of federal block grant funds while Rosie Diggles and Anita Diggles prepared many of the requests. Additionally, Walter Diggles engaged in activities and approved requests for block grant funds that were fraudulent in nature and all the defendants spent significant amounts of the excess funds on personal expenses. The Diggles were indicted by a federal grand jury on Dec. 2, 2015.
“The defendants stole from the taxpayers, and these kinds of frauds take money away from real people – disaster victims,” said Joseph Brown, U.S. Attorney for the Eastern District of Texas. “This was an appropriate sentence, and hopefully it will help deter some of this type of behavior the next time.”
“Offenders who abuse the public trust inherently are more culpable. The defendants made a conscious decision to deceive and benefit personally at the expense of the citizens of the State of Texas,” said Tamera Cantu, IRS Special Agent In Charge of the Dallas Field Office. “Today’s sentences underscore our commitment to work in a collaborative effort to promote honest and ethical government at all levels and to prosecute those who violate the public’s trust.”
"Today's sentencing is the result of an outstanding collaborative effort between the U.S. Attorney's Office, Eastern District of Texas (Lufkin Division), the Federal Bureau of Investigation, the Internal Revenue Services-Criminal Investigation Division, Homeland Security Investigations, the U.S. Department of Housing and Urban Development, and the Texas State Auditor's Office," said HSI Houston Special Agent in Charge Mark B. Dawson. "By working together as a team, we were able to bring justice to the hurricane victims to whom the funds were intended to aid."
This case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, the U.S. Department of Homeland Security / Homeland Security Investigations, the U.S. Department of Housing and Urban Development, and the Texas State Auditor’s Office. This case was prosecuted by Assistant U.S. Attorneys Tom Gibson and James Noble.