Former accountant pleads guilty to defrauding Huntsville nonprof - WAFF-TV: News, Weather and Sports for Huntsville, AL

Former accountant pleads guilty to defrauding Huntsville nonprofit, IRS

Reggious Bell (Source: UAH) Reggious Bell (Source: UAH)
HUNTSVILLE, AL (WAFF) -

A former accountant with a Huntsville nonprofit corporation that contracted with the government to place people with disabilities into government jobs has pleaded guilty in federal court to defrauding the organization and the Internal Revenue Service.

The plea was announced Wednesday by U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot and FBI Special Agent in Charge Roger C. Stanton.

Reggious Sanchester Bell, 30, of Madison, pleaded guilty before U.S. District Judge Karon O. Bowdre to one count of federal program theft for stealing more than $1 million from the nonprofit government contractor, He also pleaded guilty to two counts of federal income tax evasion for underreporting his income and underpaying his taxes for 2011 and 2012.

As part of a plea agreement with the government, Bell must pay restitution of about $1.3 million to Huntsville Rehabilitation Foundation, which does business as Phoenix, and $81,768 to the IRS. He is scheduled for sentencing Feb. 21.

“This defendant acknowledges he stole from American taxpayers and that he stole more than $1 million from an organization dedicated to helping people with disabilities find jobs. Those actions are deplorable as well as criminal, and I applaud the work of the IRS and the FBI in bringing this case forward for prosecution,” Vance said.

Phoenix, which provides counseling for and places people with disabilities in administrative, manufacturing and custodial jobs, received more than $20 million a year from 2011 through 2013 under contracts to perform custodial work at Redstone Arsenal.

According to information presented by the government at the hearing, Bell went to work in Phoenix's accounting department in 2008. He worked in accounts payable, accounts receivable and fixed assets management. As it did with other staff members, Phoenix provided Bell a credit card to use for business expenses only. However, Bell began using his Phoenix credit card for personal expenses in at least 2009 and continued to do so until he was caught in the summer of 2013, according to his plea.

Bell’s personal charges during that time including $95,228 to Best Buy, $21,969 to Louis Vuitton, $18,945 to American Airlines, $23,823 to Southwest Airlines, $46,345 to Marriott Hotels, $19,268 to Renaissance Hotels and $20,706 to Dillard’s Department Store, according to his plea. Bell also had Phoenix issue a credit card in a fictitious name with a fictitious Social Security number, which he also used for personal expenses.

Bell deleted unauthorized purchases from the credit card monthly statements and manipulated Phoenix’s account ledgers so that they would balance with the bank’s spreadsheet that showed what Phoenix owed for its staff credit cards, according to the plea.

Bell also established an accounting firm called Bell-Pete Associates. Although Phoenix never did any business with the firm, Bell invoiced Phoenix for $58,133 in accounting services in 2011, and for $235,740 in 2012, according to his plea. Bell did not report the fraudulent income to the IRS, resulting in an underpayment of taxes of $15,132 in 2011, and $66,636 in 2012.

The maximum penalty for federal program theft is 10 years in prison and a $250,000 fine. The maximum penalty for tax evasion is five years in prison and a $100,000 fine.

The IRS and FBI investigated the case, which Assistant U.S. Attorney Russell E. Penfield is prosecuting.

Phoenix released the following statement:

The Huntsville Rehabilitation Foundation, Inc. d/b/a Phoenix is very aware of the criminal proceedings in Federal Court today in Birmingham, Alabama involving one of our former employees. The federal charges he plead guilty to did involve the theft of funds from our nonprofit organization.

This case has been in process for almost three years and our organization has done everything possible to cooperate with the government in the pursuit of justice in this matter. Due to the nature of the charges, there are many details of the criminal case that the federal prosecutors cannot share with us.

The Huntsville Rehabilitation Foundation, Inc. d/b/a Phoenix continues to provide essential services to people with disabilities across North Alabama and while we will continue to pursue full recovery; our focus is, and always will be, on our mission to help people with disabilities go to work and improve the quality of their lives.

The matters in this case have not, nor will in the future, adversely affect our services to those we serve.

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