Four people and Toledo company indicted for fraudulently using job-training money for personal expenses

A 29-count federal indictment was filed charging four people and a Toledo company with defrauding federal, state and county government by artificially inflating costs and invoices associated with operating job training programs, and instead using the money to pay for real estate, cars, vacations, cosmetic surgery and other personal purchases, said U.S. Attorney Steven M. Dettelbach and Guy A. Ficco, Acting Special Agent in Charge, IRS-Criminal Investigation.

Indicted are: Daniel E. Morris, 66, of Maumee; James D. Moody, 55, Victoria Hawkins, 28, and Angela Bowser, 44, all of of Toledo, and Business Rehabilitation Informed Decisions Guiding Employment Strategies, Inc. d/b/a B.R.I.D.G.E.S., Inc., a Toledo-based corporation. 

The charges relate to program fraud, mail fraud, aggravated identity theft, money laundering, failure to pay over payroll taxes, and obstruction of justice from 2004 through 2015. 

“These defendants took advantage of economic hardship in Northwest Ohio to enrich themselves,” Dettelbach said. “They stole taxpayer dollars and blew the money on vacations, tattoos and other frivolous expenses. We have zero tolerance for misuse of taxpayer money.”

“These government-funded programs were designed to help the men, women and children of Lucas County, and these individuals defrauded them for their own personal gain,” Ficco said.  “The conduct detailed in this indictment is egregious and exposed these individuals for what they really are, thieves.”

According to the indictment:

BRIDGES operated at 242 Reynolds Road and 310 Reynolds Road. The company was in the business of providing work placement and work training services to public assistance recipients, and nearly all of its revenue came from public funds.

Morris was the founder and general manager of BRIDGES. Moody was the registered agents and shareholder along with Morris. Hawkins was an employee from 2008 through 2013, while Bowser was an employee from 2008 through 2014.

The Temporary Assistance for Needy Families program was a welfare program that provided cash assistance to qualifying households with minor children or pregnant women. TANF provided federal block grants to states each year to cover benefits, administrative expenses and services targeted to needy families.

One of TANF’s goals was reducing the dependency of needy parents by promoting job preparation, work and marriage. TANF recipients must work as soon as they are job ready and no later than two years after commencing assistance.

BRIDGES received more than $15.7 million in funding from several entities between 2004 and 2015, including the Ohio Department of Job and Family Services, the Lucas County Department of Job and Family Services, Ohio Works First and others. This funding was based in part on BRIDGES’ grant proposals. The majority of BRIDGES’ stated administrative costs were payroll and transportation.

BRIDGES provided job training and work placement services but at substantially lower costs than those stated in its budgets and invoices. The defendants fraudulently inflated BRIDGES payroll costs, transportation and mileage.

Morris, BRIDGES and others maintained false personnel files, timesheets, mileage records and reimbursement forms for nonexistent employees. They included fake, former or nonexistent employees on the payroll. For example, BRIDGES paid Moody a salary even though he did not work there, and later continued to pay him by issuing payroll checks to Moody’s wife.

BRIDGES, Morris, Moody, Hawkins and Bowser used TANF funds to pay for personal living expenses including groceries, dental care, medical care, resort vacations, pharmaceuticals, clothing, toys, designer bags, furniture, video streaming services, credit card bills, legal fees unrelated to BRIDGES’ business, tattoos, cosmetic surgery, real estate, vehicles, investments and jewelry, according to the indictment.

For example, between February 2013 and October 2014, Hawkins used a debit card linked to a BRIDGES account to make approximately $18,200 in cash withdrawals.

Each defendant is charged in a conspiracy to commit program fraud and mail fraud.  Each defendant is also charged in a conspiracy to commit money laundering offenses.

Morris is charged with four counts of program fraud, five counts of mail fraud, two counts of aggravated identity theft, nine counts of money laundering, six counts of failure to pay over withheld income tax and one count of obstruction of justice.

Moody is charged with four counts of program fraud, five counts of mail fraud, two counts of aggravated identity theft, nine counts of money laundering, six counts of failure to pay over withheld income tax and one count of obstruction of justice

Moody is charged with one count of program fraud and three counts of money laundering.

Hawkins is charged with two counts of program fraud and four counts of money laundering.

Bowser is charged with one count of program fraud and two counts of money laundering.

If convicted, the defendants’ sentences will be determined by the Court after reviewing factors unique to this case, including the defendants’ prior criminal records, if any, the defendants’ roles in the offenses and the characteristics of the violations.  In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

The case is being prosecuted by Assistant U.S. Attorneys Noah P. Hood and Gene Crawford following an investigation by the Internal Revenue Service-Criminal Investigations, Toledo, Ohio, and the Office of Auditor of State (Ohio), Toledo, Ohio.  .

An indictment is only a charge and is not evidence of guilt.  Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.