Fraud Friday – Disbarred Lawyer Jailed for Bank Fraud and Tax Evasion

November 16, 2018

By Dominic J Bartolone
Contributing Editor, Fraud Friday

Fraud Friday – Disbarred Lawyer Jailed for Bank Fraud and Tax Evasion

A disbarred Tulsa, Oklahoma attorney is headed to federal prison after being convicted on Wednesday of bank fraud and tax evasion. The former attorney dubbed a “serial white collar criminal” by prosecutors, was sentenced to 27 months in prison and ordered to pay a total of $352,115 in restitution to the companies he defrauded and to the IRS.

Harvey Joseph Stephens Jr. 49, was sentenced by Chief U.S. District Judge Gregory Frizzell, who said that although Stephens was not a violent criminal, his actions caused “substantial financial harm” to his victims, which included one company being forced to lay off employees.

A grand jury indicted Stephens in April on bank fraud charges and tax evasion.

In a plea deal with Prosecutors, Stephens admitted to creating fictitious contract workers in 2012 while he worked as a human resource manager at Sagebrush Pipeline Company in Tulsa.

According to court documents, Stephens directed paychecks issued from Sagebrush Pipeline’s staffing firm, Task Force Staffing LLC, to two fictitious employees that he created. One fake employee was a variation of Stephens’ own name.

Stephens admitted in his plea agreement that in 2012 and 2013, he cashed the checks made out to the two fictitious employees, keeping approximately $67,000.

The agreement calls for Stephens to repay Task Force Staffing $66,948, as well as pay the IRS $139,907 for the unclaimed losses derived from the scheme.

Also included in the plea deal, Stephens must pay HE&M Saw Inc. a total of $285,267 for losses they incurred between 2007 and 2009, when Stephens perpetrated a similar fraud scheme.

Prosecutors recommended a sentence of between 27 and 33 months, citing a string of crimes committed by Stephens beginning in 1987 and continuing up until 2016 in what they described as an “unbroken history of theft from employers.”

According to records, Stephens’ crime spree ranged from theft of funds in 1999 and 2005 to embezzlement in 2015. He also served a 30-day sentence in 2005 for impersonating a police officer in order to obtain sexual favors.

Stephens also served a seven-month prison term in Texas for a parole violation.

“He’s a serial white collar criminal, and it’s sad (because Stephens) had advantages,” Assistant U.S. Attorney Charles McLoughlin said, referring to Stephens once being an attorney.

An employee for HE&M Saw told the judge that the company was elated when Stephens was hired in 2006, but that soon soured as the company uncovered losses totaling over $500,000 stemming from Stephens’ phony employee scam. The losses ultimately forced the company to lay off employees.

As part of his plea agreement, Stephens, a compulsive gambler, is ordered to stay away from casinos as a term of his five-year supervised release after his prison sentence.