A Port Arthur man is going to federal prison after he and others scammed families of federal inmates out of millions of dollars.
Larry Lee Stephenson, 49, of Port Arthur, was sentenced to three years and five months. According to the office of Acting U.S. Attorney Brit Featherston, Stephenson admitted to the charge of conspiracy to commit wire fraud. In addition to his prison sentence, he will have to pay $3,456,780 in restitution to inmate families.
According to information presented in court, in September, 2016, separate indictments were handed up by federal grand juries in Texas and Florida involving Stephenson and five others in a nationwide six-year scheme which defrauded the relatives of federal inmates.
The scam worked by convincing inmate relatives they could get sentences reduced if they made a cash and payments. The payments were falsely represented to be for the payment for a network of confidential informants who would make undercover drug transactions under the direction of the courts and prosecutors which would allow the incarcerated inmates to ask the court for reductions of sentences for providing, “substantial assistance to the government under the Federal Rules of Criminal Procedure.” In reality, the money was spent for the personal benefit of the defendants and there was never any network of informants or undercover transactions.
Federal inmates do not have to pay for substantial assistance motions for reductions of sentences which normally only require information to be provided by such inmates against co-defendants as well as trial testimony.
The Texas indictment alleged a wire fraud and conspiracy to commit wire fraud involving six individuals: Alvin James Warrick, 41, Colitha Patrice Bush, 36, Ronald B. Shepherd, 33, and Alvin Turner, 54, all of Houston, Texas; and Larry Lee Stephenson, 49, and Wilbert Brown, 42, of Port Arthur, Texas. Additionally Warrick, Bush, and Shepherd were also the subject of the indictment from the Southern District of Florida also alleging a wire fraud and conspiracy to commit wire fraud. The indictments allege different victims in and around each district. The scheme resulted in losses to inmate families of over $4 million.
Warrick and Bush, the organizers and ringleaders of the scheme, were sentenced on June 29 in Miami, Florida, by U.S. District Judge Joan Lenard of the Southern District of Florida, to 235 months and 96 months in prison, respectively, with an order for a forfeiture money judgment in the amount of over $4.4 million. Shepherd was also sentenced by Judge Lenard to 28 months in federal prison on the Florida indictment. Warrick, and Bush previously pleaded guilty to wire and mail fraud conspiracy charges in both indictments in Miami. Shepherd had also pleaded guilty to the Florida indictment. Stephenson pleaded guilty to the Texas indictment in Beaumont in January. Turner has pleaded guilty to the conspiracy charge in Beaumont and is awaiting sentencing. Wilbert Brown is detained awaiting trial in Beaumont in August.
This case was investigated by the Federal Bureau of Investigation; Department of Justice, Office of Inspector General, in Miami and New York region; U.S. Marshals Service; Houston Police Department- Major Offenders Division; United States Attorney’s Offices in the Eastern District of Texas, Southern District of Florida, and Eastern District of New York. The case is being prosecuted by Assistant U.S. Attorney Robert L. Rawls in the Eastern District of Texas and Anne McNamara in the Southern District of Florida.