The federal government is trying to seize seven pieces of property in Little Rock, North Little Rock and Texas that it says were bought with the proceeds of a fraud scheme engineered by four sisters and a daughter of one of the women.
A complaint filed Tuesday in federal court in Little Rock asks a federal judge to allow the government to seize a house and a lot in the Rockwater Village area of North Little Rock; a house and an adjacent structure at 105 E. F Avenue and 3600 John F. Kennedy Blvd., also in North Little Rock; a house at 8117 Doyle Springs Road in Little Rock; and two homes in Texas -- one in Colleyville and one in Euless.
According to the complaint, filed by assistant U.S. attorneys Cameron McCree and Angela Jegley, the properties are subject to forfeiture because they were purchased with money traceable to mail fraud and money laundering.
The complaint names five women that it says engaged in a scheme to defraud the U.S. Department of Agriculture of money that was intended to settle two lawsuits filed by black, Hispanic and female farmers who said they were subjected to racial, ethnic and gender discrimination when applying for or receiving farm credit, credit servicing and noncredit farm benefits.
The women named in the complaint, who have not been charged with crimes, are sisters Lynda Charles, Rosie Bryant, Delois Bryant and Brenda Sherpell, and Rosie Bryant's daughter, April Bell.
According to the complaint, a federal court in the District of Columbia approved a consent decree in April 1999 to pay claims stemming from a class-action lawsuit filed in 1997 by a group of black farmers against the USDA. Then in 2008, Congress passed a farm bill that created a new right of action for people who had tried to participate in the Pigford v. Glickman lawsuit of 1997 but whose claims were denied for being filed too late. As a result, a number of new lawsuits were eventually combined into one case called Black Farmers Discrimination Litigation, which was settled on Oct. 27, 2011.
To qualify as a claimant, applicants had to document that they had submitted late filing requests to the appropriate party between certain dates. They also had to submit claim forms detailing specifics of the alleged discrimination and show that they met other qualifications.
Each of the claimants was entitled to a maximum award of $62,500, which included a $50,000 check payable to the claimant and his attorney, and a $12,500 payment to the IRS to cover expected taxes on the award.
In 2000, groups of Hispanic and female farmers and ranchers filed similar lawsuits against the USDA, and the 2008 farm bill directed that all pending class-action suits filed against the USDA by socially disadvantaged farmers or ranchers, including Hispanics and women, be resolved "in an expeditious and just manner."
A claims process that "offered a streamlined alternative to litigation" was established in February 2011, which again required claimants to submit notarized detailed forms, under penalty of perjury, to obtain claims of $62,500 each, which included $12,500 payments to the IRS.
The complaint alleges that Charles, the Bryants and Sherpell, along with others, recruited people to file claims in both cases asserting that they were entitled to settlement funds based on past discrimination, "when, in fact, the claimants had not suffered discrimination."
Since then, an investigation by the IRS' Criminal Investigations Division, the U.S. Postal Service, the USDA Office of Inspector General and the U.S. Marshals Service has resulted in statements from more than 170 people who acknowledged filing false claims in one of the two cases and fraudulently receiving $62,500 awards, the complaint states.
It says the house at 105 E. F St. in North Little Rock "was the command center" of the criminal operation.
In July 2014, it says, the women created an entity known as Daughters of Jovi, International, LLC, through which they represented themselves as official "claim writers" in both class-action cases to other claimants, attorneys and even the claim administrator and Arkansas agencies.
"The United States has traced the purchase of the Defendant Properties to several fraudulent claims," the lawsuit states.
It says bank records and corroborating testimony indicate that the women used fraud proceeds to purchase and maintain a variety of assets, including the properties in Arkansas and Texas that the U.S. attorney's office is seeking to have turned over to the government.
The complaint details the suspected origin of the money used to buy each property. For example, it says that Rosie Bryant bought a house in Colleyville, Texas, for $610,000 on Sept. 30, 2014, using mostly cash proceeds of fraud to make a $300,000 down payment. It alleges that on Nov. 5, 2015, she paid off the $310,000 mortgage through wire transfers linked to 27 fraudulent claims.
The complaint also alleges that on March 21, 2014, Rosie Bryant and Bell, used fraud proceeds from four accounts to make a down payment on a home in Euless, Texas, that they bought for $380,000. It says Rosie Bryant and Charles, made a $206,000 down payment, using the fraudulent funds, and took out a mortgage for the remaining $180,000.
The case was assigned to U.S. District Judge James Moody Jr.
Metro on 10/09/2019