Saturday, May 15, 2021

Former Bay Springs Clerk sentenced to prison for money laundering, tax fraud

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The former City Clerk of Bay Springs was ordered to serve four years in federal prison and pay almost a half-million dollars in restitution after pleading guilty in U.S. District Court in Hattiesburg to money laundering and tax fraud.

Randy James, 56, was sentenced by U.S. District Judge Taylor McNeel to a total of 50 months in federal prison and ordered to pay restitution in the amount of $265,561.84 to the Office of the Mississippi State Auditor on behalf of the City of Bay Springs, $95,000 in restitution to the IRS and $60,000 in restitution to RLI Surety, which was the bonding surety company for the City of Bay Springs. James was also ordered to pay $30,200 in fines and special assessments, for a total of $450,761.84. He was also ordered to spend three years on supervised release.

James admitted to the federal crimes of money laundering and making false statements on a federal tax return, said Acting U.S. Attorney Darren J. LaMarca, Special Agent in Charge James E. Dorsey of the Internal Revenue Service — and Mississippi State Auditor Shad White. James pleaded guilty to the charges on  Oct. 7 before Senior U.S. District Judge Keith Starrett.

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James embezzled more than $300,000 from Bay Springs between August 2017 and April 2018 by creating fraudulent invoices from fictitious companies for the costs of false services that were never approved or incurred by the city. He diverted city funds by obtaining checks from the City of Bay Springs, cashing the checks at a local bank and wiring those funds overseas to international scammers in the hope of winning money in a lottery scheme. James also made false statements on his personal 2018 Federal Income Tax Return by under-reporting gross receipts by $193,331.

The State Auditor’s Office issued a demand letter to James for $325,562, which included the amount of his embezzlement, plus interest and investigative costs. In his publicly filed plea agreement with the U.S. Attorney’s Office, James agreed to pay a total of $420,562 in restitution.

LaMarca commended the federal, state and local law enforcement cooperation displayed in this case. The case was investigated by the Mississippi State Auditor’s Office and Internal Revenue Service – Criminal Investigation. The case was prosecuted by Assistant U.S. Attorney Stan Harris.

“I’m grateful for the teamwork displayed by our federal partners in this case,” White said.

 To date, the Auditor’s office has recovered and returned $75,000 to the City of Bay Springs.

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 Fraud, embezzlement, and other public corruption can be reported to the Office of the State Auditor online any time by clicking the red button at www.osa.ms.gov or via telephone during normal business hours at 800-321-1275.

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