Employees of State Consortium and Non-Profit Institute Agree to Plead Guilty to Tax and Fraud Charges

BIRMINGHAM—One employee of a state business development consortium and two employees of a non-profit institute associated with the consortium have entered into plea agreements with the federal government on income tax and fraud charges, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Pat Maley and IRS Criminal Investigation Special Agent in Charge Reginael D. McDaniel.

LAUREN YOUNG, 33, head of marketing for the Alabama Small Business Development Consortium, has agreed to plead guilty to charges of wire fraud and filing false tax returns.

MICKIE DAVIS, 49, bookkeeper for the Alabama Small Business Institute of Commerce, has agreed to plead guilty to charges of conspiracy, wire fraud and filing false tax returns.

BENJAMIN JOHNSON, 35, executive director of the Small Business Institute, has agreed to plead guilty to charges of conspiracy and filing false tax returns.

Federal prosecutors brought charges against Young, Davis and Johnson, all of Gadsden, by informations either filed or unsealed today, along with the plea agreements.

The Alabama Small Business Development Consortium is composed of universities in the state, each with its own small business development center, as well as a procurement technical center and an international trade center. The consortium’s purposes are to enhance economic growth, to provide management and technical assistance to small businesses, and to develop Alabama’s workforce.

A federal grand jury indictment was unsealed last week charging the state director of the Alabama Small Business Development Consortium, Maurice William Campbell Jr., with fraud, money laundering and conspiracy. The indictment charges Campbell with using his position as the consortium’s director to obtain more than $7 million from the State of Alabama.

It charges Campbell, 59, of Rainbow City, with conspiracy to defraud the state and the Alabama Small Business Institute of Commerce, a private non-profit institute he incorporated, and with making financial transactions intended to conceal the proceeds of the fraud.

The Institute of Commerce received nearly all of its funding from the state through grants, contracts and appropriations in the education budget. From 2005 through 2010, the private, non-profit institute received more than $7.3 million in public funds intended to provide services including education and training to Alabama workers.

Campbell hired Young in 2006 as marketing director for the Alabama Small Business Development Consortium. In October 2006, she received a business check card for the consortium and, over more than three years, used it to make about $195,000 in illegitimate expenditures for herself or others, according to her plea agreement. She made efforts to conceal that she was improperly spending Institute funds, according to the plea agreement.

Young also received thousands of dollars in state funds for reimbursement of travel expenses that Young had paid with Institute funds, according to her plea agreement.

Young acknowledges that she under-reported her income on tax returns for 2008 and 2009.

Davis acknowledges in her plea agreement that, as bookkeeper of the institute, she “received hundreds of thousands of dollars in cash, services, clothing, lodging, meals, and other items for personal benefit, financed by the Institute and its state funding. Moreover, she knowingly and willfully assisted others in using institute funds for their personal benefit, including the incorporator” of the institute, Campbell.

In July and August 2005, Davis opened bank accounts for the institute and knew it received its funding from the state, according to plea agreement. That same year, she began writing checks, at Campbell’s request, from the institute to women he referred to as the Little Sisters, the plea agreement says. From 2006 to 2010, Davis used and witnessed others using business check cards on the institute’s accounts for personal expenses, including jewelry, clothing, event tickets and meals, according to her plea agreement. She acknowledges that in 2008, she financed a trip to the Bahamas using institute funds.

Davis under-reported her income on tax returns for 2007, 2008 and 2009, according to the plea agreement.

Johnson was hired as executive director of the institute in September 2006. He acknowledges in his plea agreement that he knew less than 20 percent of the state money coming to the institute was being awarded in grants to member schools. Johnson acknowledges that he used institute funds for personal expenses, including trips, clothing, and car maintenance, and that he was aware other institute officials were spending the state funds for personal expenses.

In August 2008, Johnson created Johnson Marketing Group, which he and Campbell used to obtain money from the institute, according to Johnson’s plea agreement.

Johnson acknowledges that he under-reported his income on tax returns for 2008 and 2009.

IRS-Criminal Investigation and the FBI investigated this matter. Assistant U.S. Attorney Tamarra Matthews Johnson and George Martin are prosecuting the case.