Former Program Director for Chicago Black Nurses Association Charged with Fraud, Money Laundering
Scheme Allegedly Diverted $500,000 in State Grant Funds to Personal Use
|U.S. Attorney’s Office July 06, 2011|
SPRINGFIELD, IL—A Chicago woman who formerly served as Program Director for the Chicago Chapter of the National Black Nurses Association (CCBNA), Margaret A. Davis, appeared for arraignment this afternoon in federal court in Springfield on charges that she defrauded various state grant programs of approximately $500,000. Davis, 59, of the 3100 block of West Lexington Street, is charged in a 16-count indictment with 14 counts of mail fraud and two counts of money laundering. Co-defendant Tonja Cook, 43, a former Treasurer for the Chicago organization, who is charged with Davis in count one of the indictment, was also arraigned today in a separate hearing. An initial trial date has been scheduled for Sept. 6, 2011, before U.S. District Judge Sue E. Myerscough.
On July 1, the indictment, returned by a grand jury on June 9, 2011, was unsealed when Davis and Cook appeared separately before U.S. Magistrate Judge Byron G. Cudmore. The court appointed counsel for each defendant and ordered that each be released on her own recognizance.
The indictment alleges that from December 2005 to June 2009, Davis, with the assistance of Cook, who was acting under Davis’s direction, solicited and received more than $1,000,000 in various grants from Illinois state agencies, including $460,000 from the Illinois Department of Commerce and Economic Opportunity (DCEO) for the “Young Enough to Make a Difference Project.” According to the indictment, Davis represented that the project would be implemented in six Chicago high schools in one Illinois senatorial district that was designated as a health professional shortage and medically under-served area. As part of the scheme, the indictment alleges that Davis and Cook diverted as much as $500,000 or more for Davis’s and Cook’s personal use and benefit, including to benefit Davis’s family members, friends and associates.
Assistant U.S. Attorney Timothy A. Bass is prosecuting the case on behalf of the Central District of Illinois. Participating investigative agencies of the Central District of Illinois’ U.S. Attorney’s Office’s Public Corruption Task Force include the U.S. Postal Inspection Service, Chicago Division; the Internal Revenue Service Criminal Investigations; and the Illinois Secretary of State Office of Inspector General. The Federal Bureau of Investigation, Springfield Division, has also provided assistance. Individuals who wish to provide information to law enforcement regarding matters of public corruption are urged to call the U.S. Attorney’s Office at 217-492-4450.
According to the indictment, Davis, a registered nurse, served as CCBNA’s program director and solicited, oversaw and directed activities related to public and private grants, contracts and funds. Davis also controlled a not-for-profit healthcare advocacy organization known as African American Aids Network (AAAN) and represented herself as an executive director of the Healthcare Consortium of Illinois, another not-for-profit healthcare advocacy organization. Cook, also a registered nurse, served as CCBNA’s treasurer.
From December 2005 to June 2009, according to the indictment, Davis solicited and received 15 different grants and contracts totaling $1,062,000 from Illinois state agencies including the Department of Commerce and Economic Opportunity; Department of Public Health; Department of Human Services; and the State Board of Education. Davis allegedly represented that the funds would be used to conduct numerous healthcare advocacy-related and nursing student assistance activities, including recruitment of 200 students to participate in the “Young Enough to Make a Difference Project;” educational activities to promote public awareness of HIV/AIDS, breast and cervical cancer, prostate cancer, and pandemic flu; and, implementation of two nursing student internship programs.
In fact, the indictment alleges that Davis knew that little, if any, of the advocacy and nursing student-assistance activities would be or were completed and as much as $500,000 or more of the grant funds were diverted for Davis’s and Cook’s personal use and benefit, including to benefit Davis’s family members, friends and associates. Davis allegedly used grant and contract funds for payment of her personal expenses, including mortgage, utility and credit card expenses. Cook, under Davis’s direction and with Davis’s approval, allegedly converted more than $100,000 in grant and contract funds to Cook’s personal use and benefit and to the use and benefit of Davis.
The indictment alleges that as part of the scheme and to conceal the fraud, Davis caused more than $200,000 in grant funds to be converted to cash by cashing numerous checks at a currency exchange located near her residence. Davis, with assistance at times from Cook, allegedly caused an additional CCBNA bank account to be opened but concealed from CCBNA officers and directors, caused CCBNA checks to be written to cash, and caused CCBNA checks to be written to Davis directly and to others, including her family members.
According to the indictment, Davis obtained numerous grants on behalf of CCBNA without the full knowledge of the organization, its officers and directors, and falsely represented herself as the President / Executive Director of CCBNA in entering into contractual and grant agreements between CCBNA and various Illinois agencies. Davis allegedly caused grant and contract correspondence and checks, including the $460,000 “Project” grant check, to be mailed to her Chicago residence, which Davis identified as CCBNA’s address.
If convicted, each of the 14 counts of mail fraud with which Davis is charged and the single count against Cook carries a maximum statutory penalty of 20 years in prison and a fine of up to $250,000. Davis is also charged with two counts of money laundering: one count of engaging in a money laundering transaction, which carries a maximum statutory penalty of up to 10 years in prison and a fine of $250,000, and one count of engaging in money laundering to promote and conceal the nature of the illegal or unlawful activity, an offense which has a maximum statutory penalty of 20 years in prison and a fine of up to $500,000.
Members of the public are reminded that an indictment is merely an accusation; the defendants are presumed innocent unless proven guilty.