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Six Guilty of Defrauding 42 Staffing Firms

October 21 2011

Six people who were accused of defrauding 42 staffing firms of more than $5.1 million were found guilty Thursday, the U.S. Attorney’s Office for the District of Colorado reported. The six were convicted of conspiracy to commit fraud, mail fraud and wire fraud.

The six defendants included David Banks, Demetrius Harper, Gary Walker, Clinton Stewart, David Zirpolo and Kendrick Barnes.

The defendants used several companies in a scheme to induce 42 staffing companies to payroll employees for them even though they did not have a source of income to pay the staffing firms, according to the U.S. Attorney’s office.

“In many cases, one or more of the defendants themselves reported time to and were paid by a staffing company, while one or more of the other defendants approved the reported time,” according to the U.S. Attorney’s Office. “That staffing company would pay the defendants, but [the defendants’ firms] never paid the invoices from the staffing company.”

The scheme also included approving and submitting time cards to staffing firms that contained false statements about the number of hours worked by employees, the times of day during which employees worked and/or the nature of work performed by employees, according to the U.S. Attorney’s Office. In total, the defendants defrauded staffing firms of more than $5.1 million.

Banks and his co-defendants were developing a software program they claimed would be beneficial to law enforcement agencies, according to the U.S. Attorney’s Office. Their operations went by the names of Leading Team Inc., IRP Solutions Corporation and DKH LLC.

The incidents took place between October 2002 and February 2005 with the defendants’ companies located in Colorado Springs, according to previous reports.

The government had obtained a 25-page indictment against the six in June 2009 charging them with various counts of conspiracy to commit mail and wire fraud, mail fraud, wire fraud and an allegation of asset forfeiture. Each defendant was found guilty of each charge on Thursday, except one defendant was found not guilty of one of the counts, according to the U.S. Attorney’s Office.

The verdict was reached after a three-week trial in Colorado. Jurors deliberated for two-and-a-half days before reaching guilty verdicts.

All six were taken into custody pending detention hearings. Sentencing is set for Feb. 17. Maximum sentences in this case include not more than 20 years in federal prison and fines of not more than $250,000.

All six represented themselves in court.

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President

Valentino Martinez 10/22/2011 02:12 pm

WTHF! - H = HOLY


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