ABERDEEN – Two Smithville men face a September trial on a charge they defrauded the Burlington Northern Santa Fe Railway.
Kenny Avery, 47, and Allen Duncan, 44, pleaded not guilty Monday to one federal count of fraud by wire, radio or television.
Their July 1 indictment, sealed until the hearing, told Magistrate Jerry A. Davis that the men conspired to receive more than $350,000 from BNsF by submitting fictitious invoices for services never rendered.
They each face up to 20 years in prison and payment of restitution and a $250,000 fine, if convicted on the one count.
Avery was a BNSF employee and Duncan operated Smithville Hardware Co.
According to the indictment, the men and “others known and unknown” are accused of a scheme from Jan. 1, 2003, to about Nov. 13, 2005, to file false invoices to Mathew Wyrick, another BNSF employee authorized to approve certain invoices for payment by the company.
The Avery-Duncan indictment says the scheme went this way:
When an invoice from a BNSF vendor was approved, the company’s computer system sent wire messages for payment.
Wyrick and Avery allegedly recruited vendors to submit false invoices for services never provided to BNSF. Reportedly, after the vendors received payment, they would pay Wyrick and Avery part of the proceeds.
Avery allegedly recruited Duncan to prepare fraudulent invoices totaling more than $350,000.
Greg Park with the Federal Public Defender’s Office in Oxford represents Avery, and Tupelo attorney Frank A. Russell is counsel for Duncan.
The trial is set to begin Sept. 7 in Oxford before Chief Judge Michael P. Mills.
Wyrick was indicted last January, then re-indicted in February, in Northern Texas on eight counts. In a deal with prosecutors, he pleaded guilty to one count in March and has not yet been sentenced. A co-defendant was found guilty at trial and awaits sentencing.
Patsy Brumfield/NEMS Daily Journal