The sixth and final defendant indicted in a farm program fraud scheme that rerouted more than $11.5 million intended to benefit farmers who had been discriminated against pleaded guilty Thursday in federal court to conspiracy to commit mail fraud.
Everett Martindale, 75, a Little Rock attorney, pleaded guilty Thursday to the count contained in a superseding information as part of a plea agreement with federal prosecutors in which the U.S. agreed to seek no more than two years' prison time and allow Martindale to ask for probation in addition to dismissing the indictment against him.
In 1997, a group of Black farmers filed a class-action lawsuit alleging they had been discriminated against when they applied for farm credit, credit servicing or farm benefits from the U.S. Department of Agriculture. A similar lawsuit alleged that Hispanic and female farmers also experienced discrimination in USDA farm benefit programs.
Both lawsuits were settled and resulted in a claims process where farmers could make claims for financial relief by showing they had applied for participation in a USDA benefit program and had been denied. Successful claims resulted in an award of $62,500. Of that, $50,000 would be made payable to the claimant, and $12,500 would be transferred directly to the IRS as a tax withholding.
In court on Thursday, Martindale admitted to signing off on the claim forms without knowing whether the forms were legitimately investigated, admitting that he did not investigate the claims himself. When Martindale was approached by investigators into the matter, Blake Hendrix, one of Martindale's attorneys, told Chief U.S. District Judge D. Price Marshall Jr. that his client told them that his review of the claims took, "'less than a minute, whatever time it took me to sign the claims.'"
Martindale admitted that he acted as the legal representative for claimants who filed false claims asserting they were discriminated against when they tried to get assistance from USDA for their farming operations. Martindale signed certifications that said he investigated the claims, when, in fact, he did not.
The proceeds from the false claims were mailed to Martindale, and he took a portion of the money as an attorney's fee. He also played an essential role in the process that allowed other defendants in the case to take a more substantial portion of the funds.
When opening the hearing, Marshall asked Martindale if he had talked to his attorneys about waiving his indictment and proceeding with his guilty plea to a new charge contained in a superseding information.
All federally charged defendants have the right to require that U.S. prosecutors take evidence before a federal grand jury for indictment. To be charged via a charging information, which requires only the signature of a prosecutor with the U.S. attorney's office, requires the defendant to execute a waiver of indictment.
"Have you read the proposed new charge?" Marshall asked.
"I have," Martindale responded.
"Have you read the proposed plea agreement?" Marshall asked. "Do you understand it?"
"I do," came the reply.
"Have you talked," Marshall asked, "about the possibility of waiving indictment?"
"Have we talked about that?" Martindale asked Hendrix, leaning toward his attorney.
"The indictment waiver," Hendrix said, softly.
"Oh, yeah," Martindale said to Hendrix, then turning toward Marshall, "yes, yes sir."
Noting that the plea agreements in the case began coming together only recently, Marshall asked Martindale if he had any concerns about his plea agreement being crafted so quickly. He observed that it was only in recent weeks that plea negotiations began to factor in to the court proceedings for all six defendants and that only recently everyone appeared prepared for a trial that was estimated to require as long as two months to complete.
Then, last month, the four sisters who were accused of being at the heart of the scheme to defraud the U.S. Department of Agriculture out of more than $11.5 million pleaded guilty in the matter.
Lynda Charles, 72, of Hot Springs; Rosie Bryant, 74, of Colleyville, Texas; Delois Bryant, 75, of North Little Rock; and Brenda Sherpell, 72, of Gainesville, Texas, each pleaded guilty on July 6 to conspiracy to commit mail fraud and to defraud the Internal Revenue Service. Niki Charles, 49, who is the daughter of Lynda Charles, pleaded guilty on Tuesday to conspiracy to commit mail fraud based on her role in notarizing affidavits that she knew to be false and soliciting people to file false claims.
The sisters also admitted that they hired a tax preparer to falsify tax returns, resulting in failure to report over $4.6 million to the Internal Revenue Service. That tax preparer, Jerry Green, pleaded guilty in January 2021. Marshall will sentence all defendants at a later date.
At the conclusion of Thursday's hearing, Assistant U.S. Attorney Cameron McCree smiled broadly as he intoned to Marshall the government's motion to dismiss the remaining counts contained in the indictment of the remaining defendant in one of the more complex financial fraud cases currently on the U.S. attorney's office caseload.
"The United States moves to dismiss the indictment in this case," McCree said.
You enjoyed saying that, didn't you?" asked Marshall, brightly.
"More than you know, Your Honor," McCree said, as laughter rippled through the courtroom.
Martindale will return for sentencing after completion of a pre-sentencing report by the U.S. Probation Office, a process that typically takes between three and four months.