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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Alabama

Wednesday, October 12, 2016

Accountant for Non-profit Government Contractor Pleads to Theft and Tax Evasion

BIRMINGHAM – A former accountant with a Huntsville non-profit corporation that contracted with the government to place people with disabilities into government jobs pleaded guilty today in federal court to defrauding the organization and the Internal Revenue Service, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot and FBI Special Agent in Charge Roger C. Stanton.

REGGIOUS SANCHESTER BELL, 30, of Madison, pleaded guilty before U.S. District Judge Karon O. Bowdre to one count of federal program theft for stealing more than $1 million from the non-profit government contractor, and to two counts of federal income tax evasion for underreporting his income and underpaying his taxes for 2011 and 2012. As part of a plea agreement with the government, Bell must pay restitution of about $1.3 million to Huntsville Rehabilitation Foundation, which does business as Phoenix, and $81,768 to the IRS. He is scheduled for sentencing Feb. 21.

“This defendant acknowledges he stole from American taxpayers and that he stole more than $1 million from an organization dedicated to helping people with disabilities find jobs. Those actions are deplorable as well as criminal, and I applaud the work of the IRS and the FBI in bringing this case forward for prosecution,” Vance said.

Phoenix, which provides counseling for and places people with disabilities in administrative, manufacturing and custodial jobs, received more than $20 million a year from 2011 through 2013 under contracts to perform custodial work at Redstone Arsenal.

According to information presented by the government at today’s hearing, Bell went to work for Phoenix in 2008 in its accounting department. He worked in accounts payable, accounts receivable and fixed assets management. As it did with other staff members, Phoenix provided Bell a credit card to use for business expenses only. Bell, however, began using his Phoenix credit card for personal expenses in at least 2009, and continued to do so until he was caught in the summer of 2013, according to his plea.

Bell’s personal charges during that time including $95,228 to Best Buy, $21,969 to Louis Vuitton, $18,945 to American Airlines, $23,823 to Southwest Airlines, $46,345 to Marriott Hotels, $19,268 to Renaissance Hotels and $20,706 to Dillard’s Department Store, according to his plea. Bell also had Phoenix issue a credit card in a fictitious name with a fictitious Social Security number, which he also used for personal expenses.

Bell deleted unauthorized purchases from the credit card monthly statements and manipulated Phoenix’s account ledgers so that they would balance with the bank’s spreadsheet that showed what Phoenix owed for its staff credit cards, according to the plea.

Bell also established an accounting firm, called Bell-Pete Associates. Although Phoenix never did any business with the firm, Bell invoiced Phoenix for $58,133 in accounting services in 2011, and for $235,740 in 2012, according to his plea. Bell did not report the fraudulent income to the IRS, resulting in an underpayment of taxes of $15,132 in 2011, and $66,636 in 2012.

The maximum penalty for federal program theft is 10 years in prison and a $250,000 fine. The maximum penalty for tax evasion is five years in prison and a $100,000 fine.

The IRS and FBI investigated the case, which Assistant U.S. Attorney Russell E. Penfield is prosecuting.

Updated October 12, 2016