Former Finance Chief of Maryland Legal Aid Bureau Sentenced to Two and One-Half Years in Prison for Stealing More Than $1 Million
Conspirators Created Inflated Invoices for Office Supplies for More than 10 Years
|U.S. Attorney’s Office December 14, 2010|
BALTIMORE, MD—U.S. District Judge Catherine C. Blake sentenced Benjamin Louis King, a/k/a "Bennie King," age 58, of Gwynn Oak, Maryland today to 30 months in prison, followed by three years of supervised release, for stealing over $1 million from the Maryland Legal Aid Bureau (Legal Aid). Judge Blake also entered an order requiring King to pay restitution of $1,145,940.25.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Inspector General Jeffrey E. Schanz of Legal Services Corporation - Office of Inspector General.
"Bennie King abused his position of trust for over a decade and stole more than $1 million through a longstanding fraud scheme," said U.S. Attorney Rod J. Rosenstein. "What makes the case even more offensive is that the $1 million would have paid for legal services for the poor."
The Maryland Legal Aid Bureau is a non-profit organization that provides free civil legal services to persons who cannot afford attorneys. Legal Aid has offices throughout Maryland, with its headquarters in Baltimore. Legal Aid is funded in part by federal appropriations.
According to King’s plea agreement, King was the chief of finance at Legal Aid from 1978 until January 2008. Legal Aid purchased office supplies in bulk under a "blanket" system, whereby Legal Aid would be able to take advantage of bulk purchasing without having to warehouse large amounts of supplies. Under this system, Legal Aid would prepay for supplies, and order them on an as-needed basis, drawing against the prepaid sum whenever one of the Legal Aid offices took delivery of supplies. King’s department at Legal Aid was in charge of paying invoices and administering the "blanket" purchasing agreement, making deductions as invoices were paid, and adding money if approved and allocated by Legal Aid’s board of directors and management.
At some point in the 1990s, King entered into corrupt agreements with different vendors whereby he would raise the amount of the "blanket" and they would kick back some of the excess money to him.
In 1997 or 1998 King approached Wendell Jackson, who owned a check-cashing business near Legal Aid’s headquarters in downtown Baltimore, about starting a business to sell office supplies to Legal Aid under the "blanket" system.
Accordingly, Jackson created "Baltimore Office Supply." The first time Jackson purchased supplies for Legal Aid, he cashed the check King had given him, bought the supplies at retail prices and returned the amount of money above the cost of the supplies to King. King told Jackson to keep the money and that the two of them could keep any money above the cost of the supplies. King showed Jackson where to purchase supplies and how to create invoices to Legal Aid. King himself even created invoices for Jackson from Baltimore Office Supply to Legal Aid. These invoices were used by King’s finance department to process payments to Baltimore Office Supply.
From 1998 through January 2008, King and Jackson stole more than a million dollars from Legal Aid by using inflated purchase orders and invoices.
In early 2008, the Legal Aid’s chief operating officer reviewed the amounts being spent on office supplies and determined that the "blanket agreement" had never been thoroughly audited, and that there appeared to be few, if any, controls on the amount prepaid and the amounts of supplies received or the purchase orders that were created and paid for throughout the years. Further investigation by the FBI and the Inspector General for the Legal Services Corporation revealed that Legal Aid had overpaid for supplies by approximately $1.2 million—about 85 percent of which went to King. King spent the money gambling and on entertainment at strip clubs. King had an American Express Account that he paid for entirely with cash derived from Baltimore Office Supply invoices to Legal Aid.
Wendell Jackson, a/k/a "Sonny," age 59, of Westminster, Maryland, pleaded guilty to his role in the scheme and was sentenced to 15 months in prison.
United States Attorney Rod J. Rosenstein commended the FBI and Legal Services Corporation, Office of Inspector General for their work in this investigation. Mr. Rosenstein thanked Assistant United States Attorney Barbara S. Sale, who prosecuted the case.