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US Recruiters Defrauded for More Than $5 million

US Recruiters Defrauded for More Than $5 million

DENVER,. A group of six men from Colorado Springs were found guilty of conspiracy to commit fraud, mail fraud and wire fraud by a federal court jury in Denver of a scheme to defraud staffing companies.

On June 9, 2009, the government obtained a 25-count indictment charging six individuals: David A. Banks, Demetrius K. Harper, Gary L. Walker, Clinton A. Stewart, David A. Zirpolo, and Kendrick Barnes with various counts of conspiracy to commit mail and wire fraud, mail fraud, wire fraud, and an allegation of asset forfeiture. Each defendant was found guilty of each charge.

According to the indictment and facts presented during the trial, Banks and his co-defendants were in the process of developing a software program they claimed would be beneficial to law enforcement agencies. The defendants, acting through companies known as Leading Team, Inc. (LT), IRP Solutions Corporation (IRP), or DKH, LLC (DKH), perpetrated a scheme to defraud victim staffing companies by making false statements to induce 42 staffing companies to payroll employees for them even though they did not any source of income to pay the staffing companies. In many cases, one or more of the defendants themselves reported time to and were paid by a staffing company, while one or more of the other defendants approved the reported time.

That staffing company would pay the defendants, but LT/IRP/DKH never paid the invoices from the staffing company. The scheme also included approving and submitting to staffing companies time reporting cards containing false statements about the number of hours worked by employees, the times of day during which employees worked, and/or the nature of the work performed by employees. In total, the defendants defrauded the staffing companies of over $5.1 million.

The defendants convicted of conspiracy to commit mail and wire fraud face not more than 20 years in federal prison, and a fine of not more than $250,000 or twice the gain or loss from the offense. The defendants convicted of mail fraud, or wire fraud, face the same penalty.

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