Local businesses owner and employee each plead guilty to filing false tax returns after failing to report nearly $4 million in income
ATLANTA - Raytosha Elliott, a former contracting official with the Georgia National Guard, has pleaded guilty to awarding contracts in exchange for illegal kickbacks. Elliott used her position to award numerous contracts under $5,000 to vendor companies created by her friends and associates.
“Ms. Elliott abused her position with the Georgia National Guard by awarding no-bid contracts to her friends in exchange for illegal kickbacks,” said Acting U.S. Attorney John Horn. “She and one friend alone pocketed nearly $75,000 in funds that were intended to maintain facilities supporting those who serve this country.”
“This guilty plea should send a message that there is a price to pay for such a betrayal of trust as seen in this case. This case also represents the FBI’s commitment to those investigations that protect the integrity of government funds and assets,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“The Government relies on the honesty and integrity of its officials engaged in contracting and procurement," stated John F. Khin, Special Agent in Charge, Southeast Field Office, Defense Criminal Investigative Service. “This guilty plea by a corrupt National Guard employee who misused her position was the result of DCIS' joint efforts with our Federal and State law enforcement partners to investigate corruption within the contracting process.”
“IRS Criminal Investigation will continue to provide its investigative resources and expertise in exposing fraud schemes like the one Elliott orchestrated,” said Veronica F. Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation.
“We hope this case serves as a deterrent to those who desire to pilfer the State and Federal governments’ coffers. We also believe this case exemplifies how multiple agencies can work together to achieve a common goal: to serve the public who depends on us to defend the integrity of government programs,” said Deb Wallace, State Inspector General, Georgia Office of the Inspector General.
According to Acting U.S. Attorney Horn, the charges and other information presented in court: From May 2007 through April 2012, Elliott worked for the Georgia Department of Defense, the state agency charged with coordinating and supervising all agencies and functions of the Georgia National Guard. Elliott worked as an Engineering Operations Manager out of the Clay National Guard Center, located at Dobbins Air Reserve Base, in Marietta, Georgia.
In that position, Elliott worked with engineering firms to develop bid-ready construction projects, prepared bid documents, and oversaw no-bid purchase orders. Under the rules governing the contracting process that Elliott oversaw, projects that cost less than $5,000 did not need to go through a competitive bidding process, allowing Elliott to award the contracts. She certified that the work had been completed for those projects, and facilitated payment to the vendors who allegedly completed such projects.
In that position, Elliott awarded numerous contracts under $5,000 to vendor companies created by her friends and associates, including co-defendant Lakeysha Ellis. In return, Ellis paid Elliott kickbacks, equal to 50% of the value of the contracts, for steering the contracts to Ellis’ vendor company, Total Source Solution, LLC. Elliott falsely certified that work had been completed when, in fact, it had not.
Elliott awarded Total Source Solution 17 contracts with a total value of approximately $75,000. Those contracts were for a variety of services supposedly to be performed by Total Source Solution, including electrical work, landscaping, and HVAC work. But the work was never done. Instead, the defendants split the money awarded under these contracts and spent it on personal items, including travel, meals, merchandise, and even liposuction treatment for Ellis. As part of the scheme, Elliott owned a company named Tech Group Investments, LLC. Ellis took money she had obtained from the Georgia National Guard contracts, and paid kickbacks to Elliott through this company.
Elliott and Ellis conducted a similar fraud scheme from January 2009, through May 2011, when Ellis was an accountant at Baumueller-Nuermont Corporation, an industrial equipment company with offices in Atlanta. Her job responsibilities included payroll and paying vendors. While employed as Baumueller-Nuermont’s accountant, Ellis fraudulently funneled money to the defendants’ two sham companies, Total Source Solution and Tech Group Investments. Ellis wrote corporate checks to Total Source Solution, signed her name on the checks, and forged the signature of the Vice President on the checks, to ensure that the checks could be negotiated. Ellis recorded these payments in the check registry to reflect falsely that the checks had been issued to true vendors (such as American Express) when in fact they went to Ellis’ company.
As part of the scheme, Ellis also falsified employee records in the corporation’s payroll system to disguise payments to the defendants’ two companies. Ellis created at least two phantom employees by altering the names of real employees (by switching their first and last names) and slightly changing their Social Security numbers. She then caused the payroll system to make fraudulent salary payments to Total Source Solution and Tech Group Investments for these new, non-existent employees.
Baumueller-Nuermont lost about $85,000 from this scheme.
Elliott, 35, of Atlanta, Georgia, pleaded guilty to two counts of conspiracy today. As part of her plea agreement, Elliott has also agreed to pay restitution to WebBank based on a fraudulent loan application she submitted to the bank in September 2013. In that application, Elliott falsely inflated Tech Group Investments’ sales and gross receipts, and provided a fraudulent federal tax return in support of those figures, to obtain the loan.
On March 27, 2014, Ellis, 37, of Atlanta, Georgia, pleaded guilty to two counts of conspiring with Elliott, to commit fraud against the Georgia National Guard and Baumueller-Nuermont. The indictment also charges a third defendant, Angela Thicklin (f/k/a Angela Stanback Kinlaw), 44, of Atlanta, Georgia, of conspiring with Elliott and bribing a public official. In her position at the Georgia National Guard, Elliott awarded contracts to 3M Construction LLC, which was a company owned by Thicklin. The case against Thicklin is pending trial.
Sentencing for Elliott is scheduled for August 13, 2015, at 10:30 a.m., before United States District Judge Amy Totenberg. Sentencing for Ellis has not yet been scheduled.
This case is being investigated by Special Agents of the Federal Bureau of Investigation; the Georgia Bureau of Investigation; the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service; Internal Revenue Service Criminal Investigation; the U.S. Army Criminal Investigation Command; and Deputy Inspectors General of the State of Georgia Office of the Inspector General.
Assistant United States Attorney Stephen H. McClain is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.