Term 34 months for fraudster in Arkansas feeding program for poor children

A Bryant woman Thursday became the 11th person sentenced in a fraud ring responsible for the theft of $11 million in federal funds meant to feed poor children in Arkansas.

U.S. District Judge James Moody ordered Francine Leon, 43, to spend 34 months, or nearly three years, in federal prison and to help repay more than $1 million to the U.S. Department of Agriculture's Food and Nutrition Services.

Through the national Child and Adult Care Feeding Program, the government reimburses people or organizations who provide after-school snacks or summertime meals for children in low-income areas.

In Arkansas, between 2011 and 2014, two employees of the state Department of Human Services, which administered the food program for the federal government, saw a way to enrich themselves by recruiting people to file false claims for reimbursement and then share the "reimbursements" with them.

Some of those recruited were friends or family members of those employees -- Tonique Hatton, 39, of North Little Rock and Gladys Elise Waits, also known as Gladys Elise King, 37, of England.

Leon, one of the first people to plead guilty before she could be indicted, admitted on Feb. 25, 2016, that after being recruited by Hatton and Waits, she falsely claimed to be a meal-providing sponsor through an organization called Brighter Kids, Brighter Futures. She admitted filing false claims that indicated that she had provided food for children through the nonexistent organization in Cotton Plant, Wheatley, Poplar Grove, Morrilton, Brinkley and Helena-West Helena.

Leon is now required to help Hatton repay $1,003,630 -- the amount that the USDA paid through her as a result of her false claims, which Hatton had approved.

Hatton, who pleaded guilty in September to participating in the wire-fraud conspiracy and accepting bribes, is serving a nine-year prison sentence and is part of the same "joint and several" restitution order.

Waits, 37, who pleaded guilty on March 30, 2016, to wire fraud conspiracy and accepting bribes, is serving a nine-year sentence imposed in July and is part of a separate restitution order requiring her and several other people to repay more than $9.6 million.

As he did with Waits in July, Moody ordered Leon to pay 50 percent of all funds available to her while she is in prison toward restitution. She then must pay 10 percent of all funds available to her when she enters a residential re-entry program, and is to continue paying 10 percent of all available funds upon her release.

Defendants who fail to pay restitution while on supervised release can have their probations revoked and be returned to prison. Defendants who stop paying restitution after their terms of supervised release end may be subject to garnished wages or government liens on their property.

Moody sentenced Leon to one year of supervised release.

As one of the first people to plead guilty, Leon may be entitled to a reduced sentence at a later date. Moody asked Assistant U.S. Attorney Jana Harris on Thursday how soon she might file a motion under Rule 35 (b) of the Federal Rules of Criminal Procedure, which asks a judge to reduce a previously imposed sentence based on "substantial assistance" provided after sentencing.

Harris wasn't sure exactly when such a motion would be made, prompting Moody to delay Leon's incarceration until Jan. 3 to ensure that the U.S. Bureau of Prisons doesn't have to later move her to a different prison if she were to receive a lower sentence.

Leon's defense attorney, Bill James of Little Rock, asked that Moody recommend that the bureau house her in a federal facility in Bryan, Texas, to enable family members to more easily visit her. Moody agreed to make the recommendation.

Moody didn't impose a fine, noting that Leon has a "negative net worth."

Although James had sought a strictly probationary sentence for Leon, arguing that she is a first-time offender, helps care for her parents and has continued to be employed since her indictment, Moody denied the request, citing the "multiple transactions over a long period of time" and the large amount of money involved.

The fraud scheme has so far resulted in the prosecutions of 15 people in the Eastern District of Arkansas, four of whom are still awaiting sentencing, but the investigation by the USDA's office of inspector general, the FBI, the Internal Revenue Service and the U.S. Marshals Service remains ongoing.

According to the most recent USDA annual report on Household Food Security, the number of people in Arkansas who have trouble putting food on the table is about 19.2 percent.

Federal feeding programs have long been associated with fraud.

In November 1999, the U.S. Government Accountability Office found that the Child and Adult Care Food Program "has long been plagued with fraud and abuse. Since 1993, the USDA's office of inspector general has conducted over 55 audits and investigations in 23 states -- identifying case after case of the intentional misuse of federal funds."

The Arkansas Department of Human Services was recently admonished by Arkansas Legislative Audit for failing to develop internal controls, being behind in compliance reviews and not requiring receipts for reimbursement claims. Officials with the department said they have made changes to strengthen their oversight of federally funded food programs.

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Information for this article was contributed by Brian Fanney for the Arkansas Democrat-Gazette.

Metro on 09/22/2017

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