WASHINGTON – A federal appeals court has upheld the fraud convictions of two men who falsified electrical work orders at Census headquarters in Suitland, and ordered one of the men back to lower court for a harsher sentence.
James Yates could have received up to 24 months in prison for his part in the scheme, with Ollie Stone, to defraud the government by inflating the cost of electrical jobs at the Census. Stone, who also pleaded guilty to filing false income tax returns, was sentenced to seven years in prison.
But the district court sentenced Yates to just 60 days, to be served over the course of 30 weekends, because he had an “extraordinary family responsibility” to care for his “physically and developmentally” disabled son.
A three-judge panel of the 4th U.S. Circuit Court of Appeals on Thursday rejected that sentence, saying that while it sympathized with Yates, “the record fails to demonstrate that the care he provides is ‘irreplaceable.'”
“While Yates’s incarceration will undoubtedly make life difficult for this already strained family, the effect of his absence on the family’s financial situation and support network is not different from what any family might face if the primary wage earner were sentenced to continuous imprisonment.”
Yates’ attorney said Friday that a new sentence could have “devastating consequences” for the family.
“If this was not an extraordinary case then there is none,” said the attorney, Robert Bonsib.
“Yates was an integral part of the child’s development,” he said. He “earned the money and got the health insurance” so his wife could take care of their son, Adam, who needs “literally 24-hour-a-day care.”
“The wife everyday has to get up at two or three in the morning to dress the kid and measure out his food,” Bonsib said. “To listen to the mom testify what her day is like, you wonder how anyone can survive.”
Yates has already served his 60-day sentence, Bonsib said. Even if he is given the maximum 24 months at resentencing, he would likely only serve 22 months, with credit for the time already served.
Neither Stone’s attorney nor the U.S. attorney’s office would comment on the ruling.
Court documents said the scheme began sometime after 1995, when Stone, who was working for the General Services Administration, was put in charge of electrical jobs throughout the Census. It was up to Stone to determine whether a job could be done in-house or had to be contracted out.
Government rules allowed Stone to bypass the bidding process for outside jobs that were less than $2,000. Emergency jobs could also be contracted out without prior approval.
Court documents said Stone commonly labeled repair jobs as emergencies, and then contacted Suitland electricians who would “inflate their invoices . . . or submit false invoices for work never done at (the building).” In return, the contractors gave Stone kickbacks in cash and gifts, including a hot tub, all-terrain vehicle and free electrical work on his home.
Records also show that Yates employed three other men to help him falsify paperwork and create new contracting companies in an effort to hide the scheme.
The GSA and the Internal Revenue Service began an investigation in 2000, returning a 14-count indictment in October 2001 that included charges of defrauding the government and filing false claims.
The appeals court upheld the convictions, rejecting the argument by Stone and Yates that they should have been tried separately, among other claims.
They also appealed their sentences, Stone on the grounds that the court wrongly enhanced his sentence because he abused his position as a team leader, and Yates on the grounds that he was little more than a “billing clerk” in the scheme. The appellate panel rejected both claims, noting evidence that Yates “ran the whole thing,” and ordered that his sentence should be increased.
-30- CNS 01-23-04