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Little Rock -- Four sisters on Wednesday admitted to taking part in the theft of over $11.5 million from the U.S. Department of Agriculture, money that was meant to help farmers who had been subjected to discrimination.
Before Chief United States District Judge D. Price Marshall, Lynda Charles, 72, of Hot Springs; Rosie Bryant, 74, of Colleyville, Texas; Delois Bryant, 75, of North Little Rock; and Brenda Sherpell, 72, of Gainesville, Texas, all entered guilty pleas to conspiring to commit mail fraud and to defraud the Internal Revenue Service. The defendants will get their sentences from Chief Judge Marshall later.
The four defendants acknowledged in court that between 2008 and 2017, they encouraged others to file fictitious claims alleging that they faced discrimination when they sought USDA support for their farming operations. Niki Charles, a fifth defendant, is Lynda Charles' daughter. Everett Martindale, a sixth defendant who practiced law, represented the majority of the claimants that the five women recruited. Trials for Martindale and Niki Charles are scheduled for August 30, 2022.
The sisters also acknowledged today that they engaged a tax preparer to file false tax returns, which led to the failure to notify the Internal Revenue Service of roughly $4.6 million. In January 2021, Jerry Green, the tax preparer, entered a guilty plea.
The defendants submitted claims in connection with two issues, the Black Farmers Discrimination Litigation (BFDL) settlement and the Hispanic and Women Farmers and Ranchers (HWFR) claim program, as stated in plea agreements. The BFDL settlement was the outcome of a class action lawsuit brought in 2008 by a number of black farmers who alleged that they had faced discrimination when applying for USDA farm financing, credit servicing, or farm subsidies. Similar to how the HWFR case began, groups of Hispanic and female farmers sued the USDA separately, saying that their agricultural subsidy programs were discriminatory.
Farmers who could demonstrate they had applied to participate in a USDA benefit program and believed they had been discriminated against might submit a claim for financial redress under the terms of both BFDL and HWFR. A claim that was approved earned a $62,500 payout. Of that, $50,000 would be paid to the claimant and $12,500 would be sent as a tax withholding directly to the Internal Revenue Service. The sisters were involved in 192 claims in total, almost all of which were granted, causing a loss of more than $11.5 million. Because the claimants had not experienced discrimination and, in many cases, had not even tried to farm, the allegations were untrue.
According to the indictment, Martindale would deposit claim checks into his legal firm's trust account, then send a check to the claimant from that account while withholding his attorney fee. Attorney fees were limited to $1,500 per claimant for both BFDL and HWFR. According to the indictment, the four sisters made a deal with Martindale under which they would divide the legal fees. The claimants themselves were also sought for more money, which the sisters got.
The money a claimant received was income that needed to be declared on their tax return. The sisters and Green acknowledged that Green prepared tax returns for the applicants they had chosen, and that Green had fabricated the returns to obtain a tax refund.
The money from the conspiracy was used by three of the sisters—Lynda Charles, Rosie Bryant, and Delois Bryant—to purchase a number of residences and other real estate, a Chevrolet van, and a Mercedes G550. They also each filed fake tax returns on their own behalf. According to the plea deal, the sisters must immediately renounce all claim to the automobiles and pay back the fraud funds they used to purchase the real estate before the time of sentence.
Wnctimes by Marjorie Farrington
