Criminal Justice News

Friday, June 22, 2012

U.S. Attorney Announces Another Guilty Plea in AEP Power Surge Scam


St. Albans Woman is 10th Person to Plead Guilty in Scheme

CHARLESTON, WV—U.S. Attorney Booth Goodwin announced today that a St. Albans woman pleaded guilty in federal court for her role in a scheme to obtain money by submitting fraudulent claims for power surge damage to American Electric Power Service Corporation Inc. (AEP). Karen Hodges, 39, of St. Albans, Kanawha County, West Virginia, entered a guilty plea today before United States District Judge John T. Copenhaver, Jr., admitting she conspired with others to commit federal mail and wire fraud. Hodges is the 10th defendant to plead guilty in the AEP fraudulent claim scheme.

Hodges admitted she conspired with former AEP property damage claims adjuster Deborah Farmer to unlawfully obtain money from AEP by submitting fraudulent claims for power surge damage. Farmer, 47, pleaded guilty in April to conspiracy to commit mail and wire fraud. Farmer admitted she arranged the scheme and conspired with other individuals to unlawfully obtain money from the power company by submitting the fraudulent claims.

A two-year investigation revealed that false claims were filed with AEP related to power surge damage to homes. Claims checks, ranging from $2,000 to as much as $25,000 per fraudulent claim, were mailed to several known individuals, including Hodges, at various times between March 2009 and March 2010. At her hearing, Hodges admitted she received nearly $37,099 in fraudulent proceeds.

A total of 57 fraudulent claims were filed resulting in a loss of approximately $598,485.

Hodges faces up to 20 years in prison and a $250,000 fine when she is sentenced on September 18, 2012.

The nine other co-defendants involved in the conspiracy have previously entered guilty pleas and are scheduled to be sentenced on the following dates:

■Deborah Farmer, 47, formerly of Winfield, pleaded guilty on April 2, 2012 to conspiracy to commit mail and wire fraud; sentencing set for July 3, 2012;
■Julia Washington, 45, of Charleston, pleaded guilty on April 2, 2012 to conspiracy to commit mail and wire fraud; sentencing set for July 3, 2012;
■Freda Bradshaw, 47, of Pliny, Putnam County, pleaded guilty on April 5, 2012 to mail and wire fraud; sentencing is set for July 9, 2012;
■Jonathan Shaffer, 33, of Charleston; Tiffany Shaffer, 24, of Charleston; Bryan P. Javins, 34, of Nitro; and Jeanette Boggs, 58, also of Nitro, each previously pleaded guilty to mail fraud; sentencings are set for August 16, 2012;
■Mark Ingram, 42, and Crystal Ingram, 32, both of Nitro, pleaded guilty on Monday to conspiracy to commit mail and wire fraud; sentencings are set for September 18, 2012.

The Federal Bureau of Investigation (FBI), United States Postal Inspection Service, and West Virginia State Police conducted the investigation. Assistant United States Attorney Erik Goes is in charge of the prosecution.

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