OXFORD – Two Smithville men have pleaded guilty to federal charges they conspired to defraud the Burlington Northern Santa Fe Railway.
Kenny Avery, 47, and Allen Duncan, 44, changed their not-guilty pleas Thursday before Chief District Judge Michael P. Mills.
They continue to be held without bond.
Their July 1 indictment accused the men of conspiring to receive more than $350,000 from BNSF by submitting fictitious invoices for services never rendered.
Each man faces up to 20 years in prison, payment of restitution and a $250,000 fine.
Supplemental plea agreements were sealed by the court, but typically include agreements to cooperate with authorities and to testify if called upon to do so.
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 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 recruited Duncan to prepare fraudulent invoices totaling more than $350,000.
In a guilty-plea deal in Northern Texas District Court, Wyrick was sentenced July 23 to 63 months in prison and ordered to pay $1.2 million in restitution.
His co-defendant, Robert Steele, was found guilty at trial and has appealed his 51-month sentence and $922,000 restitution.
Patsy Brumfield/NEMS Daily Journal