Former security officer Maria Carmen Nelson pleaded guilty Thursday in Little Rock's federal courthouse, whose sidewalks she once patrolled, to fraudulently taking over $575,000 in federal funds meant to feed needy children.
Nelson, 50, of Little Rock was arrested in September while in uniform, working for a firm that provides armed security officers to guard the federal administration building, next door to the courthouse, and the grounds of both buildings.
The arrest on a criminal complaint led to her Oct. 8 indictment by a federal grand jury on a charge of conspiracy to commit wire fraud and 20 individual wire-fraud counts. All the charges pertained to "reimbursements" she sought and received from the U.S. Department of Agriculture after signing up through the state Department of Human Services to be a sponsor for a federal feeding program and then falsely claiming she had fed hundreds of children at sites in Little Rock and Malvern.
The USDA funds the Child and Adult Care Feeding Program, which provides money to feed children in low-income areas during the school year and includes an after-school component for at-risk children. In Arkansas, the feeding programs were administered by the state Human Services Department, to which would-be sponsors submitted applications to participate. Once approved, sponsors could provide meals and be reimbursed based on the number of eligible meals they served.
On Thursday, Nelson stood in the courtroom of U.S. District Judge Leon Holmes next to her attorney, Garry Corrothers of Little Rock, and pleaded guilty to the conspiracy charge in return for the other mail-fraud counts being dismissed. Holmes will sentence her at a later date, not yet scheduled, after U.S. probation officers prepare a pre-sentence report. Nelson had been scheduled to stand trial before a federal jury Oct. 11.
Under federal statutes, wire fraud conspiracy is punishable by up to 20 years in prison and a fine of up to $250,000, and up to three years' probation. Federal sentencing guidelines often recommend a lower penalty range within the statutory framework, depending on individual circumstances of the crime and the defendant's background.
Assistant U.S. Attorney Jana Harris told Holmes that Nelson was recruited to participate in a fraudulent scheme involving the program by a former Human Services employee, who hasn't been publicly identified. The employee worked in the section that oversaw the feeding programs.
"Nelson and the DHS employee both had an understanding it would be a fraudulent scheme, with each taking a portion of the proceeds," Harris said. "As part of the scheme, the number of children who were fed at Nelson's sites would be inflated. Out of the money Nelson received as a result of the inflated claims, Nelson would pay cash back to the DHS employee."
Nelson received $575,917.76 from the program in payments that were deposited into a bank account, Harris said. Nelson then withdrew cash from the deposits to pay the former employee, Harris said, without saying what portion of the funds Nelson retained.
Harris said Nelson operated as a sponsor for a feeding program through an organization called Securing Our Future from about March 2012 through March 2015. Her approved feeding sites were in Little Rock and Malvern.
One of the addresses Nelson listed for her feeding sites in Little Rock was that of a 1,400-square-foot house at 4423 W. 11th St. She reported feeding 163 to 351 children at a time there, but Harris said no more than 20 children were ever seen there at one time.
Nelson also admitted that she used the address of 4208 Frazier Pike in Little Rock, where she claimed to feed 99 to 450 children on an average day, and an address on Oak Street in Malvern where she claimed to feed 124 children. No more than 20 children were ever seen at either of those locations, according to the indictment.
A claim validation review of Human Services records led to Nelson's termination as a sponsor on March 9, 2015. The review found that she had submitted false or fraudulent invoices in support of a September 2014 claim and that she had sought reimbursement for meals that didn't meet "meal pattern requirements," according to the indictment.
Nelson is one of 13 people who have been charged in separate indictments in the Eastern District of Arkansas in feeding program schemes.
In March, a former Human Services employee, Gladys Waits, pleaded guilty to the conspiracy charge and a charge of receiving a bribe, and is awaiting sentencing. Waits admitted accepting bribes to approve payments of $3.5 million to $9.5 million in USDA funds to people she knew had submitted false claims.
Waits was the seventh person to plead guilty in the related cases. Those who haven't pleaded guilty are awaiting trial.
Prosecutors say the scheme resulted in the theft of more than $10.5 million in federal funds altogether.
Metro on 08/26/2016