South Arkansas Men Sentenced To A Total Of Over 6 Years In Federal Prison For Wire Fraud And Money Laundering
El Dorado, Arkansas – Duane (DAK) Kees, United States Attorney for the Western District of Arkansas, announced today that Lawrence Shelton, age 69, of El Dorado, Arkansas was sentenced on July 30, 2018 to 36 months in federal prison followed by three years of supervised release, on one count of conspiracy to commit wire fraud and one count of money laundering; Ronald Murphy, age 70, of El Dorado, Arkansas was sentenced today to 18 months in federal prison followed by three years of supervised release, on one count of conspiracy to commit wire fraud and one count of structuring transactions to avoid reporting requirements; and Domanique Robinson, age 40, of Camden, Arkansas was sentenced today to 24 months in federal prison followed by three years of supervised release, on one count of conspiracy to commit wire fraud and one count of structuring transactions to evade reporting requirements. The defendants were additionally ordered to pay $310,000.00 total in restitution. The Honorable Susan O. Hickey presided over the sentencing hearing in the United States District Court in El Dorado.
According to court records, Shelton was the Chief Executive Officer, director, and founder of 2ND CHANCE, a nonprofit organization that focused on “at risk” children from low-income households by helping to make them self-reliant and productive citizens through education and mentoring. 2nd CHANCE received federal funding from the United States Department of Agriculture (USDA) through a federal grant and was managed by Arkansas Department of Human Services (DHS). A joint investigation by the Federal Bureau of Investigation (FBI) and the Internal Revenue Service - Criminal Investigation Division (IRS) revealed that fraudulent claims were electronically submitted to DHS by 2ND CHANCE program director, Robinson, regarding the number of children attending the program. Robinson was responsible for receiving attendance sheets from each 2nd CHANCE location and submitting claims with attendance numbers to DHS for funding/reimbursement. Murphy was the owner of South West Economic Development Association (SWEDA). SWEDA served as a food vendor for the 2nd Chance afterschool and summer program from late 2011 until June 2014. Shelton, Robinson, and Murphy, conspired to falsify the claims to DHS by inflating or completely fabricating the number of children in attendance. The fraudulent claims resulted in overpayments made by DHS that were direct deposited into 2nd Chance bank accounts by interstate wire communications. Shelton, Robinson, Murphy, and others personally benefited from the excess funds. The total overpayments made by DHS exceeded $250,000 during the period of fraudulent activity.
Robinson and Murphy were indicted by a federal grand jury in 2015. Shelton was indicted by a federal grand jury in January 2016. Murphy pled guilty in January 2016. Shelton pled guilty in April 2017. Robinson pled guilty in January 2016.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service - Criminal Investigation Division. Assistant United States Attorney Benjamin Wulff prosecuted the case for the United States.