James Keith Ivey, 52, and his wife, Melinda Kay Ivey, 43, both of Lebanon, were found guilty of all counts contained in a February 28, 2012, federal indictment following a two-day bench trial before U.S. District Judge Richard E. Dorr.
The Iveys and co-defendant Paul Ray Hunting, 39, of Paso Robles, California, devised a scheme to defraud Tracker Marine LLC from January 2006 to April 2009 by inflating purchase orders and shipping invoices. During that time, the Iveys and Hunting caused more than 2,550 fraudulent invoices to be submitted to Tracker, which created a total loss of at least $924,101 to Tracker.
The Iveys owned and operated J&M Trucking Inc. in
. Tracker contracted with J&M to transport boats and trailers to Tracker’s dealers located throughout Lebanon North America. Hunting, formerly of , was promoted to transportation manager for Tracker in 2006. Laclede County, Missouri
Hunting pleaded guilty to his role in both a wire fraud conspiracy and a money laundering conspiracy on
March 7, 2012. Hunting also pleaded guilty to failing to file an income tax return. Hunting admitted that he received approximately $265,775 from the scheme.
J&M’s compensation from Tracker was determined primarily by the distance its trucks traveled. Hunting caused Tracker to make payments to J&M in excess of the contract amount by listing an inflated and false number of billable miles on purchase orders. In exchange, James Ivey paid Hunting a portion of the revenue generated by the fraudulently increased billable miles, in cash. From 2006 to 2008, James Ivey paid Hunting a total of $265,775.
At the beginning of the scheme, there was no set amount for Hunting’s increases to the billable miles on purchase orders. However, in April 2006, James Ivey and Hunting agreed on a set amount of 158 miles as being the amount Hunting would add to each purchase order, because when multiplied by the then-applicable reimbursement rate of $1.90 per mile, the result was an additional $300 per trip. This amount allowed for an even three-way split between Hunting, James Ivey, and Melinda Ivey. The defendants continued the practice of inflating billable miles by 158 miles per trip, even after the reimbursement rate was increased to $2.10 per mile in January 2007.
However, J&M paid its drivers for the actual miles they drove, not the number of miles for which J&M invoiced Tracker.
In addition to the fraud conspiracy, James and Melinda Ivey were found guilty of a money laundering conspiracy related to the cash payments to Hunting, which involved the proceeds of the mail and wire fraud conspiracy. Approximately every two weeks, James Ivey, often accompanied by Melinda Ivey, met Hunting (usually in a parking lot in
) and paid Hunting his share of the proceeds generated from the fraudulent invoices in cash. Hunting claimed some of those payments on his federal income tax return as income from a catering business, which was false. The Iveys claimed the payments represented a percentage of revenue generated by two trucks they claimed Hunting owned and was leasing to J&M, which was also false. Lebanon
In addition to the fraud and money laundering conspiracies, James and Melinda Ivey were convicted together in nine counts of wire fraud, and James Ivey was convicted of 10 additional counts of wire fraud. The Iveys were each convicted of one count of making false statements to federal agents.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by the FBI and IRS-Criminal Investigation.