Chelsea resident indicted for fraud schemes
Published 9:24 am Friday, September 1, 2023
FROM STAFF REPORTS
Varrie Johnson Kindall, Chelsea resident and assistant Rep. to John Rogers, has been indicted by a federal grand jury in connection with schemes to defraud the Jefferson County Community Service Fund.
The announcement of Kindall’s indictment was made by U.S. Attorney Prim F. Escalona, Federal Bureau of Investigation Special Agent in Charge Carlton L. Peeples, and Internal Revenue Service, Criminal Investigation Acting Special Agent in Charge Demetrius Hardeman.
A 21-count indictment filed this week in United States District Court charges Kindall, 58, with one count of conspiracy to commit wire and mail fraud, 14 counts of wire fraud, 3 counts of mail fraud, 1 count of money laundering and 2 counts of obstruction of justice. These charges arise from an investigation of wrongdoing in connection with the Jefferson County Community Service Fund.
In June, former Representative Fred L. Plump, Jr., pleaded guilty to conspiring with Kindall and resigned from the Alabama House of Representatives.
According to the indictment, in 2015 the Alabama Legislature passed Alabama Act No. 2015-226 and authorized the Jefferson County Commission to levy and distribute a one percent sales tax and a one percent use tax to benefit the public welfare and enhance the education of the children of Jefferson County. Jefferson County began levying the new taxes in or about August 2017. The act required the county to distribute the tax revenue according to certain specified priorities, including paying debt incurred during school construction, increasing the County’s general fund, giving funds to each board of education serving students in the county, and for certain other purposes set forth in the act.
The act created the Jefferson County Community Service Fund, which was subsidized by approximately $3.6 million annually from the new taxes.
The act also created the Jefferson County Community Service Committee, the four members of which were elected by members of the Jefferson County House and Senate delegations. The Committee was responsible for ensuring that the fund was used only for the purposes set forth in the act, which included to support public entities and projects such as schools, libraries, museums, parks, zoos, neighborhood associations, athletic facilities, youth sports associations, road construction, the performing arts, police departments, the sheriff’s office, fire departments and certain nonprofit entities.
Each Representative and Senator representing Jefferson County could make recommendations to the committee of expenditures from their allotted amount of the Fund. These recommendations were made on a form created by the committee that required certain certifications by the legislator. The organization receiving the funds was required to submit information about the organization and confirm that it intended to use the money for a public purpose. During each fiscal year from 2018 to 2022, each Representative was allocated approximately $100,000 and each Senator was allocated approximately $240,000 from the Fund.
The indictment identifies certain relevant parties. Rep. John Rogers was a long-serving member of the Alabama House of Representatives. Fred L. Plump, Jr. served as the executive director of the Piper Davis Youth Baseball League, a nonprofit organization that claimed to provide a positive sporting experience for inner city youth in Jefferson County. Defendant Kindall was Rogers’ personal and professional assistant. Individual #1 was the Founder of Organization #1.
Between fiscal year 2018 and fiscal year 2022, Rogers was allocated approximately $500,000 by the Fund. Rogers directed approximately $400,000 of those discretionary funds to Piper Davis. In turn, Plump gave approximately $200,000 to defendant Kindall.
The indictment alleges that from in or about March 2019, and continuing through April 2023, Kindall conspired with Plump and others to defraud and obtain money from the fund. It is alleged that it was part of the conspiracy that Rogers, with Kindall’s assistance, recommended during each fiscal year that most of his allotment of fund money be paid to Davis.
In turn, Plump agreed to pay kickbacks to Kindall. Plump and Kindall submitted false and fraudulent information to the committee about Davis’ intended use of fund money. Upon receipt and deposit of fund checks, Plump gave checks to Kindall for approximately one-half of the amount of fund money received by Davis. On two occasions Kindall engaged in money laundering by moving large sums of illegally obtained money between bank accounts
Additionally, the indictment alleges that, in 2019, Kindall committed wire fraud by assisting Rogers in directing fund money to Organization #1 and then requiring Individual #1 to pay kickbacks to her. The indictment alleges further that, after learning about the federal investigation into the fraud scheme, Kindall attempted to obstruct justice by asking Individual #1 to give false information to federal agents and offering Individual #1 additional grant money as a bribe.
The maximum penalty for the conspiracy and substantive fraud counts is twenty years in prison and a $250,000 fine. The maximum penalty for money laundering is ten years in prison and a $250,000 fine. The maximum penalty for obstruction of justice is twenty years in prison and a $250,000 fine. The maximum penalty for obstruction of justice by bribery is five years in prison and a $250,000 fine.
The Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation investigated the case. Assistant U.S. Attorneys George Martin and Catherine Crosby are prosecuting the case.
An indictment contains only charges and a defendant is presumed innocent unless proven guilty.