It is not the money involved, it is the lack of ethics, and sometimes the two are confused or rationalized. That is, if the money involved turns out to be $6,000 it is often perceived as “minor fraud,” if it is $6 million, it is “major fraud.” However, we should not confuse ethical versus unethical behavior as larceny versus grand larceny.
The Jacksonville City Council
Keeping my statement in mind from above, I also want to add another element. Virtually every person who holds a public office is required to adhere to ethical standards. The “oath” or contract or signed statement may vary from situation to situation but the implication is the same.
The Jacksonville City Council is currently in turmoil after former City Council members Katrina Brown and Reginald Brown were found guilty of fraud. The jury has found the council members guilty on all counts.
Mr. Brown and Ms. Brown (they are not related) were allegedly involved in a scheme to build up a BBQ sauce business that was simply a front for theft. As a minority-owned business, they were trying for a minority business status designation. To do this, and to help secure a federally backed $2.65 million small-business loan, they needed a financial track record.
In recent testimony before a grand jury, Katrina Brown and her city council associate Reggie Brown seemingly paid out fake checks for office furniture and other supplies they never received. They gave back some money to the people to whom they wrote the phony checks, kept the rest, and charged the invoices to the federally-backed lender.
Reggie Brown met Katrina Brown about six years ago. She was, at that point, not an elected member of the Jacksonville City Council. The checks that passed back and forth between the two included buying Katrina Brown a $500 plane ticket.
The Scheme
To summarize, the scheme to defraud the government would eventually involve cashing checks the city council members wrote for services or goods not received, returning the majority of the funds and then defrauding the government for the full amount of the check.
It was a “clever scheme” so long as the lender did not explore the origin and the payments of the invoices. However, they did.
Those involved in receiving and cashing the fraudulent checks either invoked the Fifth Amendment about self-incrimination or they denied knowledge of the transactions. They disavowed all knowledge of the larger part of the scheme, where the city council members charged the lender for the full amount.
As with other types of fraud, there were three elements involved. Katrina Brown and Reggie Brown had little oversight. They realized this opportunity early on, perhaps feeling that no one would challenge their integrity as Jacksonville city council members under an ethics oath.
Their need was a need for money. They saw a federally guaranteed loan of nearly $2.7 million as their private bank where they could feel free to take the money as their own.
The justification in their minds was the easiest and most troubling aspect to this scandal. The rationalization was that it was the government’s money. As public figures in a large city they should have respected the public trust. They didn’t, and apparently, in their minds ethics was just a word.
LEAVE YOUR COMMENTS!
