SPRINGFIELD, Mo. -- The owners of a Lebanon, Mo., trucking company are convicted of defrauding Tracker Marine in Springfield.
James Keith Ivey, 52, and his wife, Melinda Kay Ivey, 43, both of Lebanon, were found guilty Wednesday of all counts contained in a February 28 indictment.
David M. Ketchmark, Acting United States Attorney for the Western District of Missouri, says the bench trial lasted two days.
The Iveys, who owned and operated J&M Trucking, Inc., were accused of devising a scheme to defraud Tracker Marine, LLC, from January 2006 to April 2009.
They inflated purchase orders and shipping invoices to the Springfield-based manufacturer of boats and trailers.
The co-defendants were accused of causing more than 2,550 fraudulent invoices to be submitted to Tracker, which created a total loss of more than $850,000.
Last March, co-defendent Paul Ray
Hunting, 39, of Paso Robles,
See Also: Former Tracker Marine Employee Admits to Defrauding Company
Hunting was promoted to transportation manager for Tracker in 2006. He admitted to receiving about $265,775 from the scheme.
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J&M's compensation from Tracker was determined primarily by the distance its trucks traveled. Hunting caused Tracker to make payments to J&M in excess of the contract amount by listing an inflated and false number of billable miles on purchase orders. In exchange, James Ivey paid Hunting a portion of the revenue generated by the fraudulently increased billable miles, in cash. From 2006 to 2008, James Ivey paid Hunting a total of $265,775.
At the beginning of the scheme there was no set amount for Hunting's increases to the billable miles on purchase orders. However, in April 2006, James Ivey and Hunting agreed on a set amount of 158 miles as being the amount Hunting would add to each purchase order, because when multiplied by the then-applicable reimbursement rate of $1.90 per mile, the result was an additional $300 per trip.
This amount allowed for an even three-way split between Hunting, James Ivey and Melinda Ivey. The defendants continued the practice of inflating billable miles by 158 miles per trip, even after the reimbursement rate was increased to $2.10 per mile in January 2007.
However, J&M paid its drivers for the actual miles they drove, not the number of miles for which J&M invoiced Tracker.
In addition to the fraud conspiracy, James and Melinda Ivey were found guilty of a money-laundering conspiracy related to the cash payments to Hunting, which involved the proceeds of the mail and wire fraud conspiracy. Approximately every two weeks James Ivey, often accompanied by Melinda Ivey, met Hunting (usually in a parking lot in Lebanon) and paid Hunting his share of the proceeds generated from the fraudulent invoices, in cash. Hunting claimed some of those payments on his federal income tax return as income from a catering business, which was false. The Iveys claimed the payments represented a percentage of revenue generated by two trucks they claimed Hunting owned and was leasing to J&M, which was also false.
In addition to the fraud and money-laundering conspiracies, James and Melinda Ivey were convicted together in nine counts of wire fraud and James Ivey was convicted of 10 additional counts of wire fraud. The Iveys were each convicted of one count of making false statements to federal agents.