Former City Employee Charged in $1 Million Scam
|U.S. Attorney’s Office November 28, 2012|
PHILADELPHIA—An indictment was unsealed today charging three people, including a former city employee, in a scheme to defraud the city of Philadelphia of more than $1 million, announced United States Attorney Zane David Memeger, FBI Special Agent in Charge George C. Venizelos, and City of Philadelphia Inspector General Amy Kurland. Calvin Duncan, 61, of Philadelphia, worked for the Philadelphia Water Department as a mailroom clerk. As part of his responsibilities, Duncan was responsible for mail deliveries and purchasing supplies, including printer ink and toner cartridges, for the administrative offices of PWD. Today, agents of the Federal Bureau of Investigation in Arkansas arrested Derek and Danita Willis.
According to the indictment, Duncan submitted requests for approval to purchase printer ink and toner cartridges, falsely claiming that the cartridges were for PWD employees. After receiving the printer ink and toner cartridges from the approved vendors at the city of Philadelphia’s expense, Duncan sold the printer ink and toner cartridges to Laser Cartridge Plus Inc. (LCP), a business located in Russellville, Arkansas, owned by co-defendants Derek Willis, 48, and Danita Willis, 34, both of Russellville, Arkansas. Derek and Danita Willis sought to obtain thousands of ink and toner cartridges at prices significantly below the prices usually charged by ink and toner cartridge vendors. In order to accomplish this, the indictment alleges that they purchased cartridges from Duncan knowing that the cartridges had been stolen. Derek Willis dealt directly with Duncan prior to 2005 when he tasked Danita Willis with arranging to buy the illegally obtained printer ink and toner cartridges from Duncan. Duncan mailed the illegally obtained printer ink and toner cartridges to LCP using United Parcel Service (UPS).
The alleged scheme was carried out between January 1, 2006 and January 5, 2012, and caused the city of Philadelphia to pay approximately $1,368,091.19 on purchase orders and shipping costs for printer ink and toner cartridges never intended to be used by PWD employees. Additionally, Derek and Danita Willis allegedly paid Duncan approximately $545,412.79, which was not due to him, for the printer ink and toner cartridges purchased with the city of Philadelphia funds and shipped to LCP using PWD’s UPS shipping account.
“The fraud alleged in this indictment cost the city crucial funds that might have benefitted the taxpayers in other ways,” said Memeger. “This office will work with our partners in federal, state, and local government to pursue people who steal from their municipal employers.”
“The case against Duncan was initiated by the Philadelphia Office of the Inspector General in September 2011 after investigators received a tip from a city employee. The OIG then teamed up with the FBI to conduct a joint investigation,” said Inspector General Amy Kurland. “Collaboration is the key to fighting public corruption in Philadelphia. Oftentimes, cases like this start with tips from city employees who have the courage to do the right thing. Together, we’re changing the culture of corruption that has damaged the reputation of too many good public servants.”
“The FBI, with the United States Attorney’s Office and the Inspector General’s Office, is committed to pursuing individuals who blatantly steal from the city for personal gain,” said Venizelos. “Today’s indictment illustrates law enforcement partners working together to send a message that these types of actions will not be tolerated but prosecuted to the fullest extent of the law.”
Duncan, Derek, and Danita Willis are charged in five counts of mail fraud and aiding and abetting. Derek and Danita Willis also are charged with obstruction of justice for the destruction of documents related to the fraud scheme. They also are charged with perjury for knowingly making false statements to the grand jury on May 8, 2012.
If convicted of all charges, Duncan faces a maximum possible sentence of 100 years’ imprisonment, a maximum fine of $1.25 million, a $500 special assessment, and supervised release; Derek Willis faces a maximum possible sentence of 120 years’ imprisonment, a maximum fine of $2.25 million, $900 special assessment, and supervised release; Danita Willis faces a maximum possible sentence of 110 years’ imprisonment, a maximum fine of $1.75 million, a $700 special assessment, and supervised release.
The case was investigated by the Federal Bureau of Investigation and the City of Philadelphia Office of the Inspector General. It is being prosecuted by Assistant United States Attorney Tomika N. Stevens.