Christian County Sheriff Pleads Guilty to Stealing Public Money, Money Laundering
SPRINGFIELD, MO—Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the elected sheriff of Christian County, Mo., pleaded guilty in federal court today to embezzling county funds and to his role in laundering the proceeds of a political supporter’s investment fraud scheme.
“This elected sheriff stole taxpayers’ money and treated the county coffers as his own personal piggy bank,” Dickinson said. “Sheriff Kyle took money that was supposed to be for firearms and other supplies needed by his deputies. But his greed wasn’t limited to public dollars or to the taxpayers whose trust he betrayed. He also abused his position to promote a political supporter’s investment fraud scheme, and even used the criminal profits from the scheme to help bankroll his reelection.
“The shameful actions of this defendant shouldn’t cast a shadow on the integrity and dedication of the vast majority of honest law enforcement officers,” Dickinson said. “No one is above the law. This disgraced law enforcement officer will be held accountable for his actions.”
Joseph “Joey” Edward Kyle, 53, of Ozark, Mo., waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to a federal information that charges him with one count of embezzling from Christian County and one count of participating in a money-laundering conspiracy.
Under the terms of today’s plea agreement, Kyle must immediately resign his office as sheriff of Christian County. Kyle was elected to the sheriff’s office in 2008 and reelected in 2012.
Christian County Embezzlement
By pleading guilty today, Kyle admitted that he embezzled $50,290 from Christian County. Kyle submitted 22 fraudulent invoices and purchase orders to the county for goods and services that were never provided between Jan. 1, 2011, and Oct. 14, 2014.
Kyle submitted those requisitions on behalf of EDI Plus, LLC, in Nixa, Mo. EDI was awarded a contract by the county to provide equipment—including firearms and ammunition—for the sheriff’s department from 2011 to 2014. Kyle received cash from EDI for his personal use then submitted fraudulent requisitions for goods and services purportedly supplied by EDI. In reality, no goods or services were provided; instead, these requisitions repaid EDI for the money Kyle personally received.
Money Laundering Conspiracy
Kyle also admitted today that he received $21,350 from another person, identified as “Subject #2” in court documents, for his role in promoting an investment fraud scheme.
According to the plea agreement, Subject #2 owned and operated various companies and, from January 2008 to October 2014, engaged in an investment fraud scheme. Subject #2 solicited Kyle to assist him as a promoter of the scheme, to take advantage of the authority and prestige of Kyle’s position as county sheriff. Kyle referred potential investors, distributed promotional materials, served as a personal reference and recommended that victims invest money in Subject #2’s companies.
In order to persuade potential investors, Subject #2 falsely informed them that Kyle had personally invested funds and that Kyle had assembled an investment group, comprised of deputy sheriffs and others, to invest in Subject #2’s companies. In reality, Kyle did not invest his personal funds in Subject #2’s companies. Instead, Subject #2 gave Kyle 50,000 shares in one of his companies, which Subject #2 normally sold to investors at the rate of one dollar per share.
Kyle founded Five Rivers Management, LLC, purportedly as a law enforcement training company in 2011. He deposited the money he received from Subject #2 into the company’s bank account in order to conceal the source and nature of the payments, and to make them appear to be receipts from Kyle’s law enforcement training company. Subject #2 also made a $3,000 contribution, using victim investor funds, to Kyle’s political campaign on July 1, 2012.
Between June 2012 and January 2014, Subject #2 received investment funds totaling approximately $952,670. At the time he promoted the investment fraud scheme, Kyle states that he believed Subject #2’s companies were legitimately engaged in efforts to bring their products to market. However, Kyle admitted the United States could prove he knew checks written to Five Rivers were the proceeds of some form of unlawful activity. Further, Kyle acknowledged that, at the very least, he deliberately closed his eyes to the fraud, which should have been obvious to him.
Under the terms of today’s plea agreement, Kyle will be sentenced to one year and one day in federal prison without parole. Kyle must pay $50,290 in restitution to Christian County and must forfeit to the government a money judgment of $71,640, representing the proceeds he received from his criminal conduct. Kyle must disclose and surrender any and all property that was purchased with county funds, including firearms, ammunition, vehicles, equipment, preserved food (meals-ready-to-eat) and other supplies. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorneys James J. Kelleher and Steven M. Mohlhenrich. It was investigated by the FBI, IRS-Criminal Investigation and the Missouri State Highway Patrol.