American Electric Power Issued More Than Half-a-Million Dollars in Fraudulent Claims Checks as a Result of the Conspiracy
CHARLESTON, WV—U.S. Attorney Booth Goodwin announced that three individuals were sentenced to federal prison yesterday in connection with a scheme to obtain money by submitting fraudulent claims for power surge damage to American Electric Power Service Corporation Inc. (“AEP”). Lead defendant and former AEP property damage claims adjuster Deborah Farmer, 47, was sentenced to three years in prison. Farmer previously 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. Co-defendant Julia Washington, 45, of Charleston, was sentenced to two years in prison. Washington previously pleaded guilty in April to conspiracy to commit mail and wire fraud. A third defendant, Freda Bradshaw, 47, of Pliny, Putnam County, West Virginia, was sentenced to one year in prison (six months of which will be served on home confinement) and three years of supervised release. Bradshaw previously pleaded guilty in April to conspiracy to commit mail and wire fraud.
Four other co-defendants involved in the conspiracy were also sentenced for their roles in the conspiracy: Jonathan Shaffer, 32, of Charleston, was sentenced to eight months of home confinement with electronic monitoring. Tiffany Shaffer, 24, of Poca, West Virginia, was sentenced to four months of home confinement with electronic monitoring. Bryan P. Javins, 33, of Nitro, West Virginia, was sentenced to four months of home confinement with electronic monitoring. Jeanette Boggs, 58, also of Nitro, was sentenced to four months of home confinement with electronic monitoring. These four defendants also received five years of probation once their sentences have been discharged.
A two-year investigation revealed that false claims were filed with AEP related to phony power surge damage to homes. These claims were submitted by Deb Farmer. Claims checks, ranging from $2,000 to as much as $25,000 per fraudulent claim, were mailed to the defendants at various times between March 2009 and March 2010. Farmer and Washington recruited other people into the scheme in exchange for a “cut” of the claims checks. A total of 57 fraudulent claims were filed resulting in a loss of approximately $598,485. The final restitution figure was slightly lowered due to account for some offsets that were uncovered in the course of the investigation and one scam participant settling with AEP in the civil suit filed in Putnam County.
At sentencing, the court also ordered Farmer and Washington to pay $558,412.36 in restitution, jointly and severally with each other. Defendant Freda Bradshaw was ordered to pay $115,639.07 in restitution. Defendant Jonathan Shaffer was ordered to pay $44,929 in restitution. Defendant Bryan Javins was ordered to pay $20,945 in restitution and defendant Janette Boggs was ordered to pay $25,724.57 in restitution, with a $5,000 down payment due in 20 days. All defendants were placed on payment plans.
Judge Copenhaver stated during the sentencing of defendant Deborah Farmer that he was shocked at the “ease in which more than 30 people were recruited into this fraudulent scheme.” The court continued that Farmer spent a considerable amount of time “assailing the treasury of AEP” and “acting with abandon until the scheme ended in March 2010.”
The Federal Bureau of Investigation (FBI), the United States Postal Inspection Service, and the West Virginia State Police conducted the investigation. Assistant United States Attorney Erik S. Goes handled the prosecution.