LITTLE ROCK, Ark – Four sisters, all over 70 years old, pleaded guilty Wednesday to federal charges after prosecutors said they defrauded the government, spending $11.5 million meant for farmers facing discrimination on homes and cars.
The four, 72-year-old Lynda Charles of Hot Springs; 74-year-old Rosie Bryant of Colleyville, Texas; 75-year-old Delois Bryant of North Little Rock; and 72-year-old Brenda Sherpell of Gainesville, Texas, pleaded guilty to conspiracy to commit mail fraud and to defraud the Internal Revenue Service. Sentencing will take place later.
The $11.5 million was money which had been intended to benefit farmers who had been discriminated against as part of a program from the United States Department of Agriculture. The four admitted in court that, from 2008 through 2017 they solicited people to file false claims of discrimination when they applied for USDA assistance for their farming operation.
Two additional defendants, Niki Charles, the daughter of Lynda Charles, and Everett Martindale, an attorney who acted as the legal representative of most of those who were recruited by the sisters and made the false claims, are set for trial August 30.
In admitting their crime, the sisters told the court they had hired a tax preparer to falsify tax returns, resulting in failure to report over $4.6 million to the Internal Revenue Service. That tax preparer, Jerry Green, pleaded guilty in January 2021.
The sisters admitted having submitted claims related to two matters: the Black Farmers Discrimination Litigation (BFDL) settlement and the Hispanic and Women Farmers and Ranchers (HWFR) claim program.
The BFDL settlement resulted from a class action lawsuit filed in 2008 in which a group of black farmers claimed they had been discriminated against when they applied for farm credit, credit servicing, or farm benefits from USDA. Similarly, the HWFR litigation originated when groups of Hispanic and women farmers filed separate lawsuits against USDA, also alleging discrimination in their farm benefit programs.
Both BFDL and HWFR resulted in a claims process where farmers who could show they had applied for participation in a USDA benefit program and believed they had been discriminated against could make a claim for financial relief. A successful claim resulted in an award of $62,500. Of that, $50,000 would be made payable to the claimant, and $12,500 would be transferred directly to the Internal Revenue Service as a tax withholding.
The sisters were altogether involved with 192 claims, almost all of which were successful, resulting in a loss of over $11.5 million. The claims were false because the claimants had not suffered discrimination and, in most cases, had not even attempted to farm.
The indictment alleges that Martindale would deposit claim checks into his law firm trust account, issue a check from that trust account to the claimant, and withhold his attorney fee. For both BFDL and HWFR, attorney fees were restricted to $1,500 per claimant. The indictment alleges that the four sisters entered an agreement with Martindale in which they would split the attorney fee. The sisters also demanded and received additional money from the claimants themselves.
The money received from a claim was income that should have been reported on the claimant’s tax return. The sisters and Green admitted that Green provided tax preparation services for the claimants they had recruited, and that Green falsified the tax returns to create a tax refund.
Three of the sisters—Lynda Charles, Rosie Bryant, and Delois Bryant—filed false tax returns of their own and used money from the conspiracy to buy numerous homes and other items, such as a Chevrolet van and a Mercedes G550.
Under the plea agreement, the sisters are required to relinquish any claim to the vehicles immediately and repay, by time of sentencing, the fraud money they used to buy the real properties.