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Fraud Friday— Former Jacksonville City Council Members Found Guilty of Fraud

4 October 2019

By Caity Witucki
Contributing Editor, Fraud Friday

Fraud Friday— Former Jacksonville City Council Members Found Guilty of Fraud

On October 2, 2019, a federal jury convicted former Jacksonville city council members Katrina Brown and Reginald Brown of dozens of fraud charges tied to the misuse of SBA loan funds.

At least $754,613 has been traced to the offenses.

According to the evidence presented at trial, Katrina was the primary principle for a family barbecue business that was in financial distress. Instead of properly notifying her lender, Katrina approached Reginald about incorporating two fictitious businesses that would serve as a conduit for SBA loan proceeds. Katrina and Reginald then submitted fake invoices to their SBA-approved lender on behalf of the fictitious businesses. The invoices claimed that they had performed work for Katrina’s barbecue business that required reimbursement. The SBA loan proceeds were then funneled into Katrina’s barbecue business and used for personal expenses.

Federal agents who investigated the allegations brought against Katrina and Reginald reported that none of the equipment they found in the fictitious businesses matched the invoices provided to the lending institution.

Jurors began deliberating Tuesday afternoon and reached a verdict on Wednesday. Both defendants were charged with conspiracy to commit mail and wire fraud, aiding and abetting mail and wire fraud, and aiding and abetting money laundering. Katrina was also charged with attempted bank fraud and making false statements to a federally insured financial institution. In addition, Reginald was found guilty of failure to file an income tax return with the IRS for the tax year 2014.

“Rooting out corrupt public officials who undermine public trust is the FBI’s top criminal priority,” FBI Special Agent Rachel L. Roja said in a written statement after the verdict was announced. “This case demonstrates our relentless efforts to ensure that those who are elected to serve their communities do so for the greater good, and not their own personal gain.”

The hearing for the former city council members’ sentencing is scheduled for January 27, 2020.

Previous Reporting:
Fraud Friday— SBA Loan Fraud Trial Begins For Two Former Jacksonville City Council Members

Fraud Friday — Two Jacksonville City Council Members Indicted for SBA Loan Fraud

Sources:
Department of Justice
Indictment

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