Former Employee Sent to Prison for Scheme to Defraud Garden Ridge
HOUSTON – Sandra Johnson, 48, of Katy, has been ordered to federal prison after admitting to receiving kickbacks in a money laundering conspiracy that targeted home décor retailer Garden Ridge Pottery, now known as At Home, announced U.S. Attorney Kenneth Magidson. Johnson pleaded guilty Feb. 17, 2015.
Today, U.S. District Judge Kenneth Hoyt, who accepted the guilty plea, handed Johnson a 87-month sentence to be immediately followed by three years of supervised release. She was further ordered to pay $2 million in restitution. At the hearing, additional evidence/testimony was presented including information about another fraud scheme for which Johnson had been convicted and previously sent to federal prison.
Johnson was employed as a claims manager at Garden Ridge. In that role, she was responsible for reviewing and approving payment on injury claims filed against the store by its customers, commonly referred to as “slip and fall” claims. Johnson and others conspired to submit fraudulent claims against Garden Ridge for injuries which were either faked or never occurred. Johnson’s sister - Natalie Jeng, 42, also of Katy - was employed as a claims adjuster at a third-party administrator hired by Garden Ridge to administer and investigate claims. Thus, many of the fraudulent claims that were allegedly reviewed by Johnson at Garden Ridge were then reviewed and approved by her sister. Jeng will be sentenced June 22, 2015.
In all, 26 false claims were filed against Garden Ridge which resulted in the issuance of $2,063,436 in settlement proceeds. The fraudulent settlement proceeds were split amongst the alleged injury victims and other co-conspirators, with most of the funds kicked back to Johnson. She admitted to laundering the kickbacks she received by having her co-conspirators pay her either in cash or with cashier’s checks which had been purchased under nominee names. Jeng also received a portion of some settlements for her role in the scheme.
Darlene Drummer, 43, of Fresno, and Niesha Hall, 36, of Houston, have also pleaded guilty to their respective roles in the scheme. Drummer and Hall, in addition to filing false claims against Garden Ridge in their own names, recruited other complicit claimants into the scheme.
Johnson has previously pleaded guilty to mail fraud and money laundering charges stemming from a similar scheme when she was employed as a Claims Adjuster at The Hartford insurance company. In a 2007 plea agreement related to that scheme, Johnson admitted authorizing more than $1,700,000 in payments from The Hartford to various medical clinics in the Houston area for medical services that were never performed. The clinic owners then kicked back a portion of the payments to Johnson. She was sentenced in that case to serve 12 months and one day in prison.
Previously released on bond, Johnson was taken into custody following the sentencing today where she will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation was conducted by Internal Revenue Service – Criminal Investigation and U.S. Postal Inspection Service. Assistant U.S. Attorney Jay Hileman is prosecuted the case.