BEAUMONT, Texas – A 49-year-old Port Arthur man has been sentenced for his part in a conspiracy targeting federal inmates and their families in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.
Larry Lee Stephenson pleaded guilty on January 24, 2017, to conspiracy to commit wire fraud and was sentenced to 41 months in federal prison today by U.S. District Judge Marcia Crone.
Stephenson was also ordered to pay restitution, along with the other defendants, in the amount of $3,456,780.
According to information presented in court, in September 2016, separate indictments were handed down by federal grand juries in the Eastern District of Texas, Beaumont Division, and the Southern District of Florida, Miami Division, alleging six individuals in the Port Arthur and Houston area were involved in a nationwide six-year scheme which defrauded the relatives of federal inmates by falsely representing that they could obtain reductions in their relatives’ sentences in exchange for the payment of cash and wire transfers of funds.
The payments were falsely represented to be for the payment for a network of confidential informants who would make undercover drug transactions under the direction of the courts and prosecutors which would allow the incarcerated inmates to ask the court for reductions of sentences for providing substantial assistance to the government under the Federal Rules of Criminal Procedure.
In reality, the money was spent for the personal benefit of the defendants and there was never any network of informants or undercover transactions. Federal inmates do not have to pay for substantial assistance motions for reductions of sentences which normally only require information to be provided by such inmates against co-defendants as well as trial testimony.
The scheme resulted in losses to inmate families of over $4 million.
Warrick and Bush, the organizers and ringleaders of the scheme, were sentenced on June 29 in Miami, Florida, by U.S. District Judge Joan Lenard of the Southern District of Florida, to 235 months and 96 months in prison, respectively, with an order for a forfeiture money judgment in the amount of over $4.4 million.
Shepherd was also sentenced by Judge Lenard to 28 months in federal prison on the Florida indictment.
This case was investigated by the Federal Bureau of Investigation; Department of Justice, Office of Inspector General, in Miami and New York region; U.S. Marshals Service; Houston Police Department- Major Offenders Division; United States Attorney’s Offices in the Eastern District of Texas, Southern District of Florida, and Eastern District of New York.
The case is being prosecuted by Assistant U.S. Attorney Robert L. Rawls in the Eastern District of Texas and Anne McNamara in the Southern District of Florida.
Key Facts
- State: Texas
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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