Katy Sisters Arrested In Scheme To Defraud Retailer
A Criminal Complaint Is A Formal Accusation Of Criminal Conduct, Not Evidence.
HOUSTON – Sandra Johnson, 47, and her sister, Natalie Jeng, 41, both of Katy, have been charged along with two others in a scheme to defraud home décor retailer Garden Ridge Pottery of more than $2 million, announced United States Attorney Kenneth Magidson.
Johnson surrendered to federal authorities this morning and is expected to appear before U.S. Magistrate Judge Frances Stacy at 2:00 p.m., along with Darlene Drummer, 42, of Fresno, who was arrested Thursday, May 29. Jeng surrendered Friday, May 30, and appeared before U.S. Magistrate Judge Nancy Johnson who ordered her release upon posting bond. A fourth defendant, Niesha Hall, 35, of Houston, is also charged but not as yet in custody. A warrant remains outstanding for her arrest.
According to the allegations, Johnson was employed as a claims manager by Garden Ridge and was responsible for reviewing and approving payment for injury claims filed against the retailer by its customers - commonly referred to as “slip and fall” claims. Jeng was allegedly employed as a claims adjuster at Hammerman & Gainer Inc., a third-party administrator hired by Garden Ridge to administer and investigate claims.
According to court documents, Johnson, Jeng and others allegedly conspired to submit false injury claims for which Johnson and Jeng would authorize payment. The fraudulent settlement proceeds would then be split amongst the alleged injury victim, Johnson, Jeng as well as other members of the conspiracy, according to the charges. In all, 26 allegedly false claims were filed against Garden Ridge which resulted in the issuance of $2,063,436 in settlement proceeds. The majority of the settlement payments were made via automated clearing house (ACH) deposits, an electronic payment method which generally involves the use of interstate wire communication facilities, according to the complaints.
Drummer and Hall, in addition to allegedly filing false claims against Garden Ridge in their own names, are also alleged to have recruited other complicit claimants into the scheme. According to court documents, when the claimants received their settlements, Drummer and Hall allegedly assisted in laundering the proceeds by directing the claimants to make kickbacks in the form of cash or cashier’s checks to other members of the conspiracy.
Johnson, Jeng and Drummer are also alleged to have traveled together on Disney Cruise Lines vacations during the time the fraud was being perpetrated.
Johnson was charged with wire fraud and money laundering in a criminal complaint filed April 14, 2014. Jeng, Drummer and Hall were each charged with conspiracy to launder funds in a criminal complaint filed May 23, 2014. If convicted of any of the charges, each woman faces up to 20 years in federal prison.
The investigation leading to the charges was conducted by Internal Revenue Service – Criminal Investigation and the U.S. Postal Inspection Service with the assistance of the Houston Police Department. Assistant United States Attorney Jay Hileman is prosecuting.