3 LR men admit to fraud scheme
Surplus items at case’s hub
Three Little Rock men admitted Wednesday in federal court that they conspired to defraud a federal surplus property program of amounts ranging from $125,000 to more than $1 million.
In three back-to-back plea hearings, Chief U.S. District Judge Brian Miller first accepted a guilty plea from Mark Gregory Jackson Sr., 62, who did business as Kingridge Enterprises, a construction company.
Jackson acknowledged that he submitted forged signatures to gain access to the Federal Surplus Property Donation Program, which is offered through the U.S. Small Business Administration.
It enables qualifying nonprofits, veterans organizations, municipal agencies and disadvantaged businesses to acquire government surplus at below-market rates unavailable to the general public, to give the organizations or small businesses opportunities to compete and grow.
Recipients submit requests explaining how they will use the surplus property and promise not to sell, lease or rent it out. Federal prosecutors said Jackson, along with Jimmy Don Winemiller Jr., 54, and Don “Terrell” Stephens Jr., 39, exploited the program by acquiring surplus under false pretenses, only to sell it on the open market at a steep markup.
The forms Jackson submitted falsely claimed that his disadvantaged nephew owned and operated the business, when in truth, the nephew didn’t do any work for the company, collected no salary, exercised no control and lived more than 100 miles away, where he worked full time somewhere else, according to Assistant U.S. Attorney Alex Morgan.
Once in the program, Morgan said, Jackson fraudulently purchased equipment, such as heavy-duty construction equipment, and sold much of it to Winemiller, an equipment dealer doing business as Cow Lake Construction. Morgan said Winemiller in turn sold the equipment again, at a still-greater markup, to peer equipment dealers or construction outfits, at times enlisting the help of Stephens, who found buyers in return for a brokering fee.
According to the U.S. attorney’s office, “Over the course of the scheme, Jackson acquired hundreds of pieces of surplus for $1.5 million, which he sold for more than $2.5 million.
Under the terms of his plea agreement, Jackson faces up to 20 years’ imprisonment and will forfeit $1,028,142.40.”
Jackson was represented Wednesday by Little Rock attorney Jack Lassiter.
Winemiller and Stephens, represented by Jacksonville attorney Christian Alexander and Little Rock attorney Blake Byrd, respectively, each face up to five years in prison. Winemiller has agreed to forfeit $250,000 of his ill-gotten gains, and Jackson has agreed to forfeit $125,697.05.
Jackson and Winemiller admitted that they schemed to defraud the program between October 2011 and July 2015, and Jackson acknowledged that he was a leader of the conspiracy. Stephens admitted participating in the scheme between June 2015 and July 2015.
Miller said he will set sentencing hearings after probation officers complete a pre-sentence investigation for each man.
In a news release later Wednesday, T.J. Gaylor, special agent in charge for the Central Region of the Office of the Inspector General for the Small Business Administration, said: “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.”