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Council Members Indicted for Fraud
Two members of the Jacksonville City Council have been indicted on charges of mail and wire fraud, money laundering, and other crimes, according to federal prosecutors.
Katrina Brown (37) and Reginald Brown (56), both of Jacksonville, face up to 20 years in federal prison for each count of conspiracy to commit mail and wire fraud, and for each count of aiding and abetting mail and wire fraud. They also face up to 10 years in federal prison for each count of aiding and abetting money laundering.
The indictment, unsealed on Monday, also charges Katrina Brown with two counts of attempted bank fraud and two counts of making false statements to a federally insured financial institution, each carrying a maximum penalty of 30 years in federal prison. Reginald Brown faces a single count of failure to file a tax return, carrying a maximum penalty of one year in federal prison.
The indictment seeks to forfeit at least $754,613.10, which is alleged to be traceable to the offenses.
According to the indictment, in late 2013, Katrina Brown began operating as the primary principal for two businesses, Basic Products, LLC and CoWealth, LLC, which had obtained a loan from the Small Business Administration (SBA) in 2011 for $2.652 million, as well as a loan of $380,000 and grant of approximately $260,000 from the City of Jacksonville (COJ).
Katrina Brown’s family had been in the barbecue business in Jacksonville for many years. The loan/grant money was supposed to fund an expansion of Basic Products and help to create permanent manufacturing jobs in Northwest Jacksonville. However, the indictment alleges that Katrina Brown and her co-conspirator, Reginald Brown, used the money for their own personal gain, rather than for the intended purpose.
Reginald Brown allegedly deposited SBA loan proceeds into the bank accounts of his shell companies, A Plus Training and Consultants, LLC and RB Packaging, LLC, and then funneled the money back to Basic Products. He kept the difference for himself, using the majority of the money for personal expenses.
The indictment alleges that Reginald Brown failed to file a tax return for tax year 2014 and failed to disclose to the IRS that he had received tens of thousands of dollars from the SBA.
The City of Jacksonville sent $210,549.99 in grant money to BizCapital in December 2014, based on the fraudulent invoices submitted by Reginald Brown’s shell companies. Katrina Brown and Reginald Brown failed to inform BizCapital that Basic Products had fraudulently obtained at least $251,919.04 in loan payments.
The indictment is a stark reminder of the corruption that can occur in public office and highlights the need for greater accountability in government.
The U.S. Attorney’s Office for the Middle District of Florida is handling the case, which is pending in federal court.
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Key Facts
- State: Florida
- Category: Public Corruption|Fraud & Financial Crimes|White Collar Crime
- Source: DOJ Press Release â†â€â€
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