On January 19, a local computer business owner from Selma, CA was indicted by a federal grand jury on 22 charges; the list included conspiracy, mail fraud, money laundering and aiding and abetting. The man is suspected of having extorted approximately $800,000 from the federal government as part of a plot to take money from a school district.
The defendant, Mitchell Freeman, runs a silk-screening business called Twisted Head design but also has done computer services work for many businesses and schools in the area. He is accused of presenting fake invoices to the federal government for computer services he rendered to the Chowchilla Elementary School District.
According to an FBI spokesperson, Freeman may have had help from a friend, Gregory Paul Styles, who has been charged with similar crimes and was Management Information Systems Director for the CESD from 1998-2001. In his capacity as Director, Styles was responsible for requesting computer services for the school district and for computer projects that were eligible for federal funding through a program called E-Rate, which gave schools discounts for schools and libraries within the U.S.
Styles also ran a computer business on the side, allegedly along with Freeman, called Computer Services. He was not allowed to collect any revenue from the federal E-Rate program as part of his personal business. The grand jury accuses Styles of using Computer Services to extort money from the E-Rate federal program, which he wasn’t permitted legally to collect because of his job with the CESD.
Freeman may have linked his Twisted Head Design business with Computer Services in order to use this E-Rate program to earn illegal income. Although his business did not technically handle computer work, he did provide computer services to the Chowchilla School District. The grand jury claims that Styles would contract the actual computer work out to other businesses on his own, often over-estimating the actual cost of the work done, and that Freeman was one such example.
Freeman declined to comment, and has pled not guilty to all charges.
Created By: Computer Consulting 101 Professional Kit