The indictment alleges the women and Martindale worked together to submit false claims concerning discrimination against farmers who are black, Hispanic or female. It says the women also hired a tax preparer, Green, to falsify tax returns, resulting in a failure to report more than $4.6 million to the Internal Revenue Service.
From 2008 until 2017, the women solicited people to file false claims asserting they were discriminated against when they tried to get assistance from the USDA for their farming operations, the indictment alleges.
It says claims were submitted under two programs: the Black Farmers Discrimination Litigation Settlement and the Hispanic and Women Farmers and Ranchers Litigation.
The Black Farmers litigation stemmed from a class-action lawsuit filed in 1997 in which a group of black farmers claimed they had been discriminated against when they applied for farm credit, credit servicing or farm benefits from USDA. The Hispanic and Women Farmers litigation came about when groups of Hispanic or women farmers filed separate lawsuits against the USDA, also alleging discrimination in their farm benefits programs.
Both lawsuits resulted in a claims process where farmers who could show they had applied for participation in a USDA benefit program and believed they had been discriminated against could make a claim for financial relief. A successful claim resulted in an award of $62,500, which included a $50,000 check payable to the claimant and his or her attorney, and a $12,500 payment to the IRS to cover expected taxes on the award.
The indictment alleges that in the scheme, 192 false claims were made, almost all of which were successful, resulting in a loss of more than $11.5 million. The claims were false because the claimants hadn’t actually suffered discrimination, and in most cases, had not even attempted to farm, according to the U.S. attorney’s office.
The indictment alleges that Martindale deposited claim checks into his law firm trust account, then issued checks from that trust account to the claimant while withholding his fee. While attorneys fees were restricted to $1,500 per claimant, the indictment alleges that the four sisters had an agreement with Martindale to split the attorney fee. Prosecutors say the sisters also demanded and received additional money from the claimants themselves.
The money received from a claim was income that should have been reported on the claimants’ tax returns, but the sisters arranged for Green to provide tax preparation services for the recruited claimants to create false tax refunds, the indictment alleges.
The indictment also alleges that three of the sisters — Charles and both Rosie and Delois Bryant — filed false tax returns of their own and laundered money through purchases of numerous homes and properties, as well as a Chevrolet van and a Mercedes G550. They laundered money through cashier’s checks and payments on a student loan for Charles’ daughter, it alleges.
The four sisters are each charged with eight counts of mail fraud, one count of conspiracy to defraud the government and 82 counts of aiding and abetting false returns. Lynda Charles, Rosie Bryant and Delois Bryant are also charged with 12 counts of tax evasion and several counts of money laundering. Niki Charles and Martindale each face eight counts of mail fraud and Green faces only the conspiracy charge.
The indictment was announced Friday by Cody Hiland, U.S. attorney for the Eastern District of Arkansas; Dax Roberson, special agent in charge of the USDA Office of Inspector General; and Tamera Cantu, special agent in charge of the IRS.
An ongoing investigation is being conducted by the two federal agencies with assistance from the U.S. Marshals Service and the U.S. Postal Inspection Service.
The case is being prosecuted by Assistant U.S. Attorneys Angela Jegley, Michael Johnson, Cameron McCree and Bart Dickinson.