Former Baltimore City Employee Sentenced To 42 Months In Prison For Scheme To Defraud the City of Baltimore
Accountant Working in the City’s Finance Department Fraudulently “Re-Issued” Approximately $80,000 of Checks
Baltimore, Maryland – U.S. District Judge George L. Russell III sentenced Denita Hill, age 27, of Baltimore, Maryland, to 42 months in prison, followed by two years of supervised release, for a scheme to defraud the City of Baltimore through the reissuance of fraudulent checks for pay and benefits. Judge Russell also ordered Hill to perform 200 hours of community service. A federal jury convicted Hill on March 4, 2015 of wire fraud conspiracy and two counts of aggravated identity theft, in connection with the scheme
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Robert H. Pearre, Jr., Inspector General, City of Baltimore Office of Inspector General; Interim Commissioner Kevin Davis of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn J. Mosby.
According to evidence presented at trial, Hill was an accountant in the Finance Department of the City of Baltimore. Co-defendant Robert Johnson worked in the Consumer Relations Service of the U.S. Department of Veteran’s Affairs.
Baltimore City employees who leave their employment are entitled to a lump sum check of any pay and benefits for which they are qualified. From July 11, 2013 to August 2, 2013, Hill and Johnson conspired to use the financial and identity information of former Baltimore City employees to obtain fraudulent employee benefit payout checks. Hill identified individuals who had received and cashed large lump sum payments and then obtained reissuance of such checks, as if they had not been received. These duplicate checks were printed at the Baltimore City Finance Office, where Hill stole the checks. Hill delivered the checks to Johnson, endorsed to him by Hill with the forged signature of the original payee. Johnson endorsed and cashed the checks, deposited the proceeds into his bank account and used the funds for his benefit.
For example, on July 11, 2013, Johnson deposited a check made out to a victim in the amount of $14,741.09, and fraudulently endorsed by Hill to Johnson with the victim’s forged signature. On July 31, 2013, Johnson deposited a check made out to a second victim in the amount of $58,485.91. Again, the check was endorsed by Hill to Johnson with the second victim’s forged signature. Both victims had previously received and cashed their initial lump sum payment checks and the duplicate checks were issued and endorsed to Johnson without their knowledge or permission.
After Johnson attempted to wire some of the funds to pay off an account at a different financial institution, Johnson’s bank was alerted to the suspicious transactions and referred the matter to the City of Baltimore Office of the Inspector General, who sought the assistance of the Finance Department in determining the authenticity of the endorsements. Hill was tasked with the investigation and notified Johnson of the problem. Hill attempted to derail the investigation and obtain release of the funds by the bank by claiming to have spoken with the check recipients, whom she said confirmed that the endorsements were genuine. In fact, neither statement was true: Hill had not spoken to the victims, and they had not endorsed their checks over to Robert Johnson. Meanwhile, Johnson’s bank had reversed the deposits and returned the funds to the City of Baltimore, leaving a large deficit in Johnson’s account balance. Johnson obtained funds from Hill to repay the amount due.
Over the course of the conspiracy, Hill and Johnson fraudulently obtained approximately $75,000 all of which was ultimately recovered.
Robert Johnson, age 34, of Perry Hall, Maryland, previously pleaded guilty to his role in the conspiracy and was sentenced to a year and a day in prison followed by three years of supervised release, and ordered to serve 75 hours of community service.
United States Attorney Rod J. Rosenstein praised the Baltimore Office of Inspector General, Baltimore City Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Tamera L. Fine and Special Assistant U.S. Attorney Josh Felsen, a cross-designated Baltimore City Assistant State’s Attorney, who prosecuted the case.