United States Attorney’s Office
Eastern District of Arkansas
July 25, 2018
Little Rock Trio Pleads Guilty to Wire Fraud; Exploited Program Assisting Distressed Businesses
LITTLE ROCK—Three Little Rock men pleaded guilty to participating in a fraudulent scheme that generated over $1 million in illicit profits by exploiting a government program designed to help distressed businesses. Mark Gregory Jackson, Sr., 61, Jimmy Don Winemiller, Jr., 53, and Don “Terrell” Stephens, Jr., 39, each of Little Rock, all pleaded guilty to conspiracy to commit wire fraud today before Chief United States District Judge Brian S. Miller.
Cody Hiland, United States Attorney for the Eastern District of Arkansas, Michael T. Gavin, Special Agent in Charge of the Memphis Field Office of the FBI, T.J. Gaylor, Special Agent in Charge for the Central Region of the Office of the Inspector General for the U.S. Small Business Association (SBA-OIG), and Paul W. Walton, Special Agent in Charge for the Southwest Region of the Office of the Inspector General for the U.S. General Services Administration (GSA-OIG), announced today’s guilty pleas.
“This case is a great example of how the FBI works with fellow law enforcement agencies to target those who criminally engage in fraud for personal gain,” Michael T. Gavin, Special Agent in Charge, FBI-Memphis Field Office said. “The FBI will diligently continue our efforts to pursue those engaged in criminal activity that impacts the integrity of U.S. Government programs and we will continue working together to bring them to justice, so that they may be held accountable for their actions.”
The fraudulent scheme grew out of the Federal Surplus Property Donation Program, through which qualifying non-profits, veterans organizations, municipal agencies, and disadvantaged business can acquire government surplus at below-market rates unavailable to the general public. Recipients submit requests explaining how they will use the surplus property and further promise not to sell, lease, or rent it out. The trio exploited the program by acquiring surplus under false pretenses only to sell it in the open market at a steep markup.
Jackson (doing business as Kingridge Enterprises) gained access to the surplus donation program by submitting forms featuring forged signatures that falsely claimed his disadvantaged nephew owned and operated Kingridge. In truth, the nephew did no work for Kingridge, collected no salary, and exercised zero control—he lived over 100 miles away from its Little Rock office and was employed elsewhere fulltime.
Once in the surplus donation program, Jackson proceeded to fraudulently acquire surplus (usually heavy-duty construction equipment) for sale. Much of it was sold to Winemiller (doing business as Cow Lake Construction), an equipment dealer who proceeded to sell it (again) at a still greater markup to peer equipment dealers or construction outfits. At various times, Winemiller enlisted the aid of Stephens to find buyers and paid him a fee for brokering deals.
Over the course of the scheme, Jackson acquired hundreds of pieces of surplus for $1.5 million, which he sold for over $2.5 million. Under the terms of his plea agreement, Jackson faces up to 20 years’ imprisonment and will forfeit $1,028,142.40. For their part, Winemiller and Stephens each face up to five years’ imprisonment and will forfeit $250,000.00 and $125,697.05, respectively.
“The privilege afforded to SBA 8(a) Program participants to access low-cost equipment through the Federal Surplus Property Program gives these small businesses a unique opportunity to compete and grow,” said T.J. Gaylor, Special Agent in Charge, SBA-OIG. “When a company exploits such a program for personal enrichment and does so at the expense of other small businesses, they must be held accountable to protect the integrity of the program. OIG appreciates the commitment of our federal law enforcement partners and the U.S. Attorney’s Office in combating fraud against small business programs.”
“In this case, a federal program was compromised by defendants who were motivated by personal, financial gain,” said Paul W. Walton, Special Agent in Charge, GSA-OIG. “Working with our law enforcement partners, the General Services Administration Office of Inspector General will continue to investigate fraudulent activity to protect the integrity of this important GSA program.”
Assistant United States Attorney Alexander D. Morgan prosecuted the case for the United States following a multi-year investigation by FBI-Memphis, SBA-OIG, and GSA-OIG.
Source: U.S. Department of Justice press release.
