Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 1F,LED,N of 17 A\ NïV GBK OPEN COURÏ zs Z0t4 GHARLES R" DJARD, JR CLHRK SK IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERI\ DISTRICT OF ALABAMA SOUTHERN DIVISION UNITED STATES OF AMERICA v KIMBERLY SMITH HASTIE ANd RAMONA MCARDLE YEAGER cRTMTNAL No. 14 - ) ) ) ) USAO NO.: 14R00177 ) ) Violations: 18 U.S.C. $ 1349 r8 u.s.c. $ 1343 ) ) ) ) b>9 t - Cè 18 u.s.c. $ 1341 18 U.S.C. $ l9s1(a) 18 U.S.C. $ 1001 INDTCTMENT THE GRAND JURY CHARGES: At all times relevant to this Indictment: Overview of Mobile Countv Government 1. Mobile County is a county in Mobile, Alabama in the Southern District of Alabama. Mobile County receives funding from, among other sources, the citizens of Mobile County through taxes and fees. 2. Mobile County is governed by the Mobile County Commission, an agency that provides general administration and other services to the citizens of Mobile County (the "County Commission"). As part of its responsibilities, the County Commission oversees the management and distribution of county funds. The County Commission is comprised of three commissioners who are elected by the citizens of Mobile County and who each represent a district in Mobile County. I Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 2 of 17 3. The Mobile County Administrator's Office is responsible for coordinating with the County Commission and other elected county offrcials to provide services to the citizens of Mobile County (the "Administrator's Office"). 4. Mobile County is further served by various departments, which include the Mobile County Revenue Commission and the Mobile County License Commission (respectively, the "Revenue Commission" and the'ol-icense Commission"). 5. The Revenue Commission is responsible for mapping, appraisals, assessments, and the collection of ad valorem taxes in Mobile Coúnty. The Revenue Commission is led and managed by an elected Revenue Commissioner. 6. The License Commission is responsible for vehicle registration in Mobile County as well as overseeing business licenses, sales and use taxes, and other services. The License Commission is led and managed by an elected License Commissioner. 7. In the course of conducting government business, the License Commission submits invoices to the County Commission for payment. After these invoices are reviewed by the County Commission and the Administrator's Office, the County Commission initiates payments through the distribution of county funds, Defendants in this Case 8. KIMBERLY SMITH HASTIE ("HASTIE") Commissioner for Mobile County. She was elected License is currently the License Commissioner on or about November 4,2008 and began her term on or about January 19,2009. HASTIE was reelected as License Commissioner on or about November 6,2012. 2 Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 3 of 17 9. RAMONA MCARDLE YEAGER ("YEAGER") is cunently the Deputy License Commissioner for Mobile County. She served as the Chief Clerk of the License Commission from in or about 1992 or 1993 to in or about March 2014, when she became the Deputy License Commissioner. Individuals Related to this Case 10. Victor T. Crawford ("Crawford") is an at-will contract employee of the County Commission. Crawford manages a company that provides information technology services to the License Commission. Crawford has serued the License Commission on an ongoing basis since in or about 1991. The County Commission compensates Crawford in exchange for his services. COUNT ONE l8 u.s.c. $ 1349 Conspiracy 11. The Grand Jury realleges and incorporates numbered paragraphs 1-10 of this Indictment as if fully set forth herein. 12. From in or about July 2012 through in or about July 2014, in the Southem District of Alabama, Southern Division, and elsewhere, the defendants, KIMBERLY SMITH HASTIE and RAMONA MCARDLE YEAGER, did willfully, knowingly and unlawfully combine, conspire, confederate, and agree together with each other and other persons, both known and unknown to the Grand Jury, to commit certain offenses against the United States, to-wit: to, having devised and intending to devise a scheme and artifice to defraud, and for obtaining money and property by means of false and fraudulent pretenses, representations, and promises, transmit and cause to be transmifted by means of a J Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 4 of 17 wire, radio, and television communication in interstate and foreign commerse, writings, signs, signals, pictures, and sounds for the purpose of executing such scheme and artifice, in violation of Title 18, United States Code, Section 1343 (wire fraud); and to, having devised and intending to devise a scheme and artifice to defraud, and for obtaining money and property by means of false and fraudulent pretenses, representations, and promises, for the purpose of executing such scheme and artifice and attempting so to do, place in any post office and authorized depository for mail matter, any matter and thing whatever to be sent and delivered by the Postal Service, and deposit and cause to be deposited a matter and thing whatever to be sent and delivered by any private and commercial interstate canier, and takes and receives therefrom, any such matter and thing, and knowingly cause to be delivered by mail and such canier according to the direction thereon, and at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter and thing, in violation of Title 18, United States Code, Section 1341 (mail fraud). Obiective of the Conspiracy 13. The objective of the conspiracy was to trick and deceive the County Commission and the citizens of Mobile County by falsifying invoices and misappropriating funds, and to obtain political lobbying and consulting services and personal benefits without the knowledge and oversight of the County Commission and at the expense of Mobile County taxpayer dollars. Manner and Mep,ns 14. HASTIE and YEAGER shared a common plan and pu{pose to hide and disguise expenditures and payments from the County Commission. 15. In or about luly 2012, HASTIE and YEAGER sought to retain services from a political consulting firm and to conceal the firm's $10,500.00 retainer fee from the County Commission. On or about August 2I, 2012, the consulting firm submitted an invoice to HASTIE for the retainer fee. HASTIE instructed the consulting firm to seek payment of the fee from Crawford, even though Crawford had neither benefitted from nor sought out the ftrm's 4 Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 5 of 17 services, nor even participated in any manner in the services. HASTIE further instructed Crawford to pay the fee, even though the consulting firm had done no work for or with Crawford. On or about August 21,2012, the political consulting firm e-mailed its invoice to Crawford. 16. In or about August 2012, HASTIE reviewed the consulting firm's invoice. She instructed YEAGER to disguise and falsi$ the flrrm's retainer fee. In a meeting with Crawford, HASTIE and YEAGER directed him to falsifu his invoice and add an item called "'Web & Social Media Expenses" to Crawford's invoice. HASTIE and YEAGER directed Crarvford to falsety state that such expenses were $10,500.00, In truth, Crawford did not incur "'Web & Social Media Expenses" as stated in his invoice and was being instructed by HASTIE and YEAGER to pay their political consulting bill. Crawford complied with the instructions because he feared that HASTIE would retaliate against him if he did not comply. Crawford sent the false invoice to YEAGER. HASTIE signed and approved the invoice on or about August 22,2012. YEAGER submitted the false invoice to the County Commission. Not knowing that Crawford's invoice was false and actually in part represented sèrvices sought by HASTIE and YEAGER, the County Commission mailed a check to Crawford on or about September 5,2012 as payment for his services for July 2012. On or about September 7, 2072, Crawford paid the consulting firm's $10,500.00 retainer fee from personal funds due to fear of consequences of not fulfilling HASTIE and YEAGER's instructions. 17. Commencing in or about January or February 2014, HASTIE and YEAGER sought to have the County Commission unknowingly finance HASTIE's aspirations of serving 5 Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 6 of 17 as Revenue Commissioner in a merged License / Revenue Commission in or about October 2015. 18. In or about February 2014, HASTIE, YEAGER, Crawford, and the License Commission's comptroller met at the License Commission to discuss a potential merger of the License and Revenue Commissions. During the meeting, HASTIE asked Crawford if he supported the merger. Crawford responded "yes" because he was fearful that HASTIE would seek to terminate his employment 19. environment if he said "no." During her tenure as License Commissioner, HASTIE cultivated a work of intimidation at the office and repeatedly threatened to terminate Crawford's employment as well as the employment of several License Commission employees. On repeated occasions, HASTIE led Crawford to believe that he had no choice but to comply with HASTIE's requests. 20. Specifically, HASTIE sought to have Crawford pay HASTIE's $1,800.00 qualifying fee to run for Revenue Commissioner. Crawford gave HASTIE a $1,800.00 check in or about January or February 2014. Based on Crawford's numerous interactions with HASTIE and his experience HASTIE would of providing services to the License Commission, Crawford believed seek to terminate his employment if he did not provide HASTIE the check for her qualifying fee. 21. On or about February 5,2014, HASTIE deposited Crawford's $1,800.00 check into a BBVA Compass Bank account ending in 2808. HASTIE used the money provided by Crawford to submit her qualifying fee to run for Revenue Commissioner. HASTIE did not use any of her own funds to pay for her qualifying fee. 6 Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 7 of 17 22. From in or about February 2014 to in or about July 2014, HASTIE and YEAGER sought to falsify invoices and misrepresent to the County Commission provided to the License Commission. HASTIE requested the services of services consultants and lobbyists to support her plan to merge the License and Revenue Commissions. Unbeknownst to the County Commission, the defendants instructed a political consulting firm to falsify their invoices and have them contain false and misleading statements. Specifically, the defendants signed off on the false invoices, knowing they contained lies to trick the County Commission. The defendants submitted the false invoices to the County Commission, which unknowingly relied on the false invoices signed by HASTIE and YEAGER and then paid the invoices. 23, In or about }i4;ay 2014, HASTIE had, unbeknownst to the County Commission, directed the License Commission's comptroller to pay a lobbying firm with unauthorized funds in knowing violation of Mobile County law, Act 2013-292, as described below. The firm worked for HASTIE to draft legislation in support of her plan to metge the License and Revenue Commissions. HASTIE arranged to pay the lobbying firm with money from a segregated account of the License Commission. HASTIE, YEAGER, and the License Commission's comptroller have signature authority on the segregated account. 24. Enacted on or about May 20,2073, Act2013-292 describes the purpose and scope of a segregated account, which is funded by the public. The law states that money in the account shall come from 'oa special issuance fee not to exceed five dollars ($5) to be collected by the License Commissioner of Mobile County on eaçh motor vehicle registration, boat renewal or registration, manufactured home registration, business license application, or other instrument registered or application applied for in the office of the license commissioner." The License 7 Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 8 of 17 Commissioner may spend money in the account only as authorized by Act 2013-292, namely, when such spending is 'ofor the preservation and storage of records relating to motor vehicle registration, boat registration, and business licenses as prescribed by the Department of Examiners of Public Accounts and for the purchase, installation, improvement, development, upgrading, and maintenance of equipment and technology in the office of the License Commissioner of Mobile County." 25. On or about }i4;ay 29, 2014, the License Commission comptroller provided a $10,000.00 check to the lobbying firm as compensation for its services to HASTIE to further her political agenda. HASTIE was aware of Act 2013-292 and knowingly violated its provisions by instructing the comptroller to withdraw and spend money from the account to pay the lobbying firm. The firm's services were not for any of the purposes enumerated in Act 2013-292. Rather, the lobbying fìrm's services were for furthering HASTIE's aspirations of combining the offtces of the License and Revenue Commissions. According to invoice #2106 provided by lobbying firm to the License Commission, the firm's description of services the for HASTIE included: o'[C]ommunications consulting, management of bill drafting, meeting with legislators, coordination of political efforts. Review of research and delivery of legislation for introduction." 26. At times during their conspiracy, HASTIE and YEAGER knowingly caused to be transmitted e-mail communications concerning the payment of invoices of political consultants. In or about February 2014, HASTIE sought the services of a political consulting company to promote her political ambitions of merging the License and Revenue Commissions. HASTIE instructed the consulting company to bill Crawford for services HASTIE, even though it provided to she knew Crawford had not benefited from or sought out services from 8 Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 9 of 17 the consulting firm. On or about February 21,2014, a representative of the company e-mailed Crawford and stated: "Good moming. Kim Hastie provide [sic] us your contact ad [sic] billing information and it is my understanding that you will be assisting her with payment. Attached is our consulting retainer fee for February. If you have any questions at aLl, please feel free to contact me anytime." Crawford paid the consulting company's invoice out of personal funds because he feared that HASTIE would seek to terminate his employment if he did not make the payment. 27. On or about April 23, 2074, HASTIE had a meeting in her office with Crawford and YEAGER where HASTIE explained that the Strateco invoices had to be changed because ooif it's going to say my name, I need to pay it." HASTIE instructed Crawford on how to falsify his APL Software Engineering invoice to include falsified Strateco invoices when Crawford billed the License Commission. HASTIE explained what changes she wanted made to the Strateco invoices. 28. of }i4lay 6, 2014, YEAGER notified Crawford that HASTIE did not APL Software Engineering invoice #LC201404 for April 2014 services in approve his amount On or about the $37,531.25 because HASTIE did not like the correspondence shown on the invoice. Crawford resubmitted his invoice with falsified Strateco invoices #225 and #234. HASTIE and YEAGER approved APL invoice #LC201404 on or about May 19, 2014. The County Commission paid APL invoice #LC201404 on or about May 23,2014, via check #293880. 29. On or about }i4ay 12, 2014, YEAGER knowingly provided falsified Strateco invoice #250 to Crawford to submit with his May services invoice. Invoice #250 was dated 9 Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 10 of 17 April 22,2014 for $2,500.00 and had the following changes: (1) the bill was changed from "Mobile County License Commission" to "Bienville Rock Software," and (2) the item description was changed from 'oKim Hastie Consulting Retainer" to "Digital Marketing and Social Media Management." Crawford attached the falsified Strateco invoice #250 to his APL Software Engineering invoice #LC201404 for May 2014 services in the amount of $39,514.00 and submitted it to HASTIE and YEAGER for approval. HASTIE and YEAGER approved APL invoice #LC201404 on or about June 10, 2014. The County Commission paid APL Software $39,514.00 via check #294764 on or about June 17,2014. 30. At times during their conspiracy, HASTIE and YEAGER knowingly caused Mobile County government checks to be processed and delivered by mail and commercial delivery in the Southern District of Alabama. Specifically, on or about }i4ay 23,2014 HASTIE and YEAGER caused the County Commission to mail a check payable to APL Software Engineering in the approximate amount of $37,531.25. In violation of Title 18, United States Code, Section 1349. COUNTS TWO THROUGH SIX r8 u.s.c. $ 1343 Wire Fraud 3 1. The Grand Jury realleges and incorporates numbered paragraphs 1-10 of this Indictment as if fully set forth herein. 32. From in or about February 2014 through in or about July 2014, in the Southem District of Alabama, Southern Division, and elsewhere, the defendants, KIMBERLY SMITH HASTIE and RAMONA MCARDLE YEAGER, 10 Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 11 of 17 willfully and knowingly did execute and attempt to execute a scheme and artifice to defraud Mobile County by means of false and fraudulent pretenses, representations and promises, knowing at the time that the pretenses, representations and promises were and would be false when made. The defendants falsified invoices and misrepresented to the County Commission services that political consultants provided to the License Commission. Unbeknownst to the County Commission, the defendants instructed a political consulting firm to falsify and alter their invoices and have them contain false and misleading statements. The defendants disguised the true nature of services provided by the firm and disguised the true recipients of the services. The defendants approved the false invoices, knowing that they were false and inaccurate. The defendants submitted false invoices to the County Commission, which relied on the false and fraudulent representations in the invoices and paid the invoices. For the purpose of executing this scheme and artifice to defraud Mobile County, the defendants caused to be transmitted in interstate commerce, certain signs, signals, and sounds by means of wire communication, to-wit: Count Two Count Three Count Four Count Five Count Six An e-mail communication to Crawford on or about February 21,2014 that was transmitted in interstate commerce and concerned the payment of a political consulting firm. An e-mail communication to Crawford on or about March 24,2014 that was transmitted in interstate commerce and concerned the payrnent of a political consulting firm. An e-mail communication to Crawford on or about April2I,2014 that was transmitted in interstate commerce and concerned the payment of a political consulting firm. An e-mail communication to Crawford on or about April23,2014 that was transmitted in interstate commerce and concerned the payment of a political consulting firm. An e-mail communication to Crawford on or about June 13, 2014 that was transmitted in interstate commerce and concemed the payment of a political consulting firm. 11 Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 12 of 17 In violation of Title 1 8, United States Code, Section 1343. COUNTS SEVEN THROUGH NINE 18 U.S.C. $ 1341 Mail Fraud 33. The Grand Jury realleges and incoqporates numbered paragraphs 1-10 of this Indictment as if fully set forth herein. 34. From in or about February 2014 thtrough in or about July 2014, in the Southern District of Alabama, Southern Division, and elsewhere, the defendants, KIMBERLY SMITH HASTIE ANd RAMONA MCARDLE YEAGER, willfully and knowingly devised and intended to devise a scheme and artifice to defraud Mobile County by means of false and fraudulent pretenses, representations and promises. defendants falsified invoices and misrepresented to the County The Commission services that political consultants provided to the License Commission. Unbeknownst to the County Commission, the defendants instructed a political consulting firm to falsify and alter their invoices and have them contain false and misleading statements. The defendants disguised the true nature of services provided by the firm and disguised the true recipients of the services. The defendants approved the false invoices, knowing that they were false and inaccurate. The defendants submitted false invoices to the County Commission, which relied on the false and fraudulent representations in the invoices and paid the invoices. For the purpose of executing such scheme and artifice to defraud and for obtaining money and services, the defendants caused Mobile County govemment checks to be processed and delivered by mail and commercial delivery service within the Southern District of Alabama, to-wit: 12 Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 13 of 17 Count Seven Count Eight Count Nine Check #293880 dated May 23,2014, payable to APL Software Engineering in the amount of $37,531.25. Check #294764 dated June 17,2014, payable to APL Software Engineering in the amount of $39,514.00, Check # 295643 dated July 11,2014, payable to APL Software Engineering in the amount of 537,412.50. In violation of Title 18, United States Code, Section 1341. OUGH FIFTEEN COUNTS TEN 18 U.S.C. $ 19sl(a) Hobbs Act Extortion under Color of Official Right 35. The Grand Jury realleges and incorporates numbered paragraphs 1*10 of this Indictment as if fully set forth herein. 36. From in or about December 2010 through in or about February 2014, in the Southern District of Alabama, Southern Division, and elsewhere, the defendant, KIMBERLY SMITH HASTIE, did knowingly obstruct, delay, and affect commerce and the movement of articles and commodities in commerce by extortion. HASTIE engaged in a course of threatening conduct to obtain property from Crawford with his consent. HASTIE knew that such property was not lawfully due HASTIE and her office. HASTIE also knew that the property was provided in return for official acts under color of official right. HASTIE used her position of public office for personal benefit. She cultivated a culture of intimidation within the License Commission. HASTIE repeatedly threatened to seek to terminate Crawford's employment. Through and intimidation, HASTIE coerced Crawford to purchase gifts for HASTIE threats and further coerced Crawford to pay HASTIE's qualifying fee to run for Revenue Commissioner. But for such threats and intimidation, Crawford would not have provided HASTIE gifts and a payment, to- wit: 13 Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 14 of 17 Count Ten Count Eleven Count Twelve Count Thirteen Count Fourteen Count Fifteen On or about December 16,2010, Crawford paid approximately $536.80 for a42-inchVizio LCD TV. On or about December 9,2011, Crawford paid approximately $381.49 for a 4O-inch LCD TV. On or about December 5,2012, Crawford paid approximately $505.98 for a Kindle Fire and a 39-inch LCD TV. On or about December t ,2013, Crawford paid approximately $153.99 for a Kindle Fire. On or about December 11,2013, Crawford paid approximately $74L27 for a37-inch LED TV and an iPad. On or about February 5, 2014, HASTIE deposited a $1,800.00 check provided by Crawford into a BBVA Compass Bank account ending in 2808. In violation of Title 18, United States Code, Section 1951(a). COUNT SIXTEEN 18 U,S.C. $ 1001 False Statement to a Federal Agency 37. The Grand Jury realleges and incorporates numbered paragraphs 1-10 of this Indictment as if fully set forth herein. 38. On or about July 16, 2014, in the Southem District of Alabama, Southem Division, the defendant, KIMBERLY SMITH HASTIE, did knowingly and willfully make a materially false, fictitious, and fraudulent statement and representation in a matter within the jurisdiction of the executive branch of the Government of the United States, by stating to Special Agent Ketrick Kelley Investigation that she did not instruct Crawford to Commission in order to cover the cost Commission Christmas offices located of the Federal Bureau of bill for work not performed for the License of gifts she told Crawford to purchase for a License party. HASTIE made this statement at the License Commission's at 3925-F Michael Boulevard, Mobile, AL 36609. The I4 statement and Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 15 of 17 representation was false because, as HASTIE then and there knew, she did in fact instruct Crawford to bill for work not performed as described above. In violation of Title 18, United States Code, Section 1001. FORFEITURE NOTICE 39. The allegations contained in Counts I through 15 of this Indictment are hereby realleged and incorporated by reference for the purpose of alleging forfeitures pursuant to Title 18, United States Code, Section 981(aX1XC) and 40. Title 28, United States Code, Section 2461. Upon conviction of the offenses set forth in this Indictment, the defendants, KIMBERLY SMITH HASTIE ANd RAMONA MCARDLE YEAGER, shall forfeit to the United States of America, pursuant to Title 18, United States Code, 981(a)(1)(C) and Title 28, United States Code, Section 2461, any property,rcal or personal, that constitutes or is derived from proceeds traceable to the offense. 4I. If any of the property described above, as a result of any act or omission of the defendant: a. cannot be located upon the exercise ofdue diligence; b. has been transferred or sold to, or deposited c. has been placed beyond the d. has been substantially diminished in value; or e. has been commingled with other property which cannot be divided without difficulty, 15 with, a third party; jurisdiction of the court; Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 16 of 17 the United States of America shall be entitled to forfeiture of substitute property pursuant to Title 21, United States Code, Section 853(p), as incorporated by Title 28, United States Code, Section 2a6t@). All pursuant to 18 U.S.C. $ 981(aXlXC) and 28 U.S.C. ç 246t. l6 Case 1:14-cr-00291-CG Document 1 Filed 11/25/14 Page 17 of 17 A TRUE BILL FOREMAN I.INITED STATES G SOUTHERN DISTRICT OF KENYEN R. BROWN T]NITED STATES ATTORNEY By: NOVEMBER 2014 ted States Attomey Sinan Kalayoglu United States Attorney icki Assistant United States Attorney Chief, Criminal Division Y Case 1:14-cr-00291-CG Document 1-1 Filed 11/25/14 Page 1 of 1 PENALTY PAGE CASE STYLE: UNITED STATES v. KIMBERLY SMITH HASTIE et al. DEFENDANTS: KIMBERLY SMITH HASTIE (Counts 1-16) RAMONA MCARDLE YEAGER (Counts 1-9) USAO NUMBER: 14R00177 AUSAs: GREGORY A. BORDENKIRCHER SINAN KALAYOGLU CODE VIOLATIONS: Count 1 Counts 2-6 Counts 7-9 Counts 10-15 Count16 18 U.S.C. 18 U.S.C. 18 U.S.C. 18 U.S.C. § 1349- Conspiracy § 1343 -Wire Fraud § 1341- Mail Fraud § 1951(a) -Hobbs Act Extortion under Color of Official Right 18 U.S.C. § 1001 -False Statement to a Federal Agency PENALTIES: Count1 Counts 2-6 Counts 7-9 Counts 10-15 Count 16 Forfeiture Notice: 20 yrs/$250,000/3yrs SRT/$100 SA 20 yrs/$250,000/3yrs SRT/$100 SA 20 yrs/$250,000/3yrs SRT/$100 SA 20 yrs/$250,000/3yrs SRT/$100 SA 5 yrs/$250,000/3yrs SRT/$100 SA Forfeiture of property