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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of Kentucky

FOR IMMEDIATE RELEASE
Monday, February 6, 2017

Fulton County Contract Supplier Guilty Of Giving Kickbacks Tied To Construction Of Fulton County Detention Center

PADUCAH, Ky. – a Dresden, Tennessee, business owner and contract supplier pled guilty today in United States District Court before Senior Judge Thomas B. Russell for his role in a conspiracy to defraud Fulton County citizens, through kickbacks and concealment of costs associated with work performed on the 2015 Fulton County Detention Center expansion, announced United States Attorney John E. Kuhn, Jr.

Ronald D. Armstrong, 60, pled guilty to four charges including Honest Services Wire Fraud and Wire Fraud for his role in a conspiracy that allegedly involved then Fulton County Jailer Ricky D. Parnell and others between April 2015 and August 2016.

According to the plea agreement, Armstrong is the owner of Armstrong Construction, located in Dresden, Tennessee, whose company often performed contracting work for Fulton County both as part of the Fulton County Detention Center expansion (Project) and for work done prior to the Project. Armstrong has been doing business with Parnell and Fulton County for approximately twenty years.

Armstrong was awarded a $210,000 general contractor contract by the Fulton County Fiscal Court as part of the Project. Parnell influenced the Fulton County Fiscal Court to award Armstrong with this contract with the understanding that Armstrong would pay Parnell $100,000 of his fees to Parnell as a kickback for being awarded the contract. In following through with this agreement, Armstrong so far has paid Parnell $80,000 in cash.

Armstrong knowingly and voluntarily agreed and conspired with Parnell to give Parnell cash kickbacks due to Parnell influencing the Fulton County Fiscal Court to award Armstrong with the general contractor contract for the Project, which Parnell could do because he was the Fulton County Jailer. Armstrong’s contractor fees were paid by Fulton County. As part of their kickback scheme, the Fiscal Court paid Armstrong by check in amounts of $50,000, $60,000, and $50,000, which were drawn on the Fulton County account with Republic Bank in Louisville, Kentucky, and those checks triggered interstate wire transfers.

Armstrong and Parnell both profited from their arrangement and neither the Fulton County Fiscal Court nor the citizens of Fulton County were ever made aware of the arrangement. In doing so, Armstrong had the intent to defraud the citizens of Fulton County through the kickback scheme he entered into with Parnell.

Armstrong was charged by grand jury indictment, with co-defendants Ricky D. Parnell, 59, of Hickman, Kentucky; Michael Homra, 79, of Fulton, Kentucky; Jimmy Boyd, 56, of South Fulton, Tennessee; and Daniel C. Larcom, 42, of Union City, Tennessee, on November 15, 2016 and were arraigned in United States District Court in Paducah, before Magistrate Judge Lanny King that same day.

If convicted at trial, Armstrong could be sentenced to no more than 80 years in prison, pay a $1,000,000 fine, and be sentenced to serve a three-year period of supervised release.

This case is being prosecuted by Assistant United States Attorney Nute Bonner and is being investigated by the Kentucky Attorney General’s Office and the Federal Bureau of Investigation (FBI).

Topic: 
Financial Fraud
Updated February 7, 2017