Putnam County Woman Pleads Guilty to Charges Stemming from AEP Power Surge Scam

CHARLESTON, WV—A Putnam County woman pleaded guilty today in federal court to charges stemming from a scheme to obtain money by submitting fraudulent claims to American Electric Power Service Corporation Inc. (AEP). Freda Bradshaw, 47, of Pliny, Putnam County, West Virginia, entered a guilty plea today before United States District Judge John T. Copenhaver, Jr., admitting she conspired with others to commit mail and wire fraud. Two others, Deborah Farmer and Julia Washington, pleaded guilty earlier this week for their role in the conspiracy.

Bradshaw admitted she conspired with Farmer and others to unlawfully obtain money from AEP by submitting fraudulent claims for damages. Farmer, who worked as a property damage adjuster for the company, recruited others into the conspiracy in exchange for a cut of the payoff—usually half of the proceeds. The claims related to power surge damage where the claimants were not entitled to receive any money.

Claims checks, ranging from $2,000 to as much as $25,000 per fraudulent claim, were mailed to several known individuals, including Bradshaw, at various times between March 2009 and March 2010. At her hearing, Bradshaw admitted she received nearly $55,000 in fraudulent proceeds. The investigation revealed that a total of 57 fraudulent claims were filed, resulting in a loss of approximately $598,485.

Bradshaw faces up to 20 years in prison and a $250,000 fine when she is sentenced on July 9, 2012.

The Federal Bureau of Investigation, United States Postal Inspection Service, and West Virginia State Police are handling the investigation. Assistant United States Attorney Erik Goes is in charge of the prosecution.