Two north Louisiana men have pleaded guilty to a plot to defraud their Louisiana employer, Raeford Farms.
William Ross Hickman, 48, of Arcadia, and Brian K. Whiteman, 47, of Haughton, were charged with conspiracy to commit interstate commerce fraud, which cost their employer nearly $2.2 million.
US District Judge Elizabeth E. Foote presided over her most recent hearing.
According to evidence presented to the court, Hickman and Whiteman participated in a fraud scheme that began before 2018 and involved Raeford Farms of Louisiana.
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Hickman was employed as sales manager and Whiteman was assistant sales manager for the company’s Arcadia manufacturing facility.
Raeford Farms sells a variety of products including fresh and frozen chicken and chicken frames. A chicken frame is the core of the chicken that is left after processing the breasts, thighs, wings and legs. Hickman negotiated the sale of these chicken products in order to obtain the highest possible return on sale.
While employed at Raeford Farms, Hickman devised a scheme to fraudulently divert Raeford Farms business by using Group 7792 as an intermediary to purchase Raeford Farms chicken frames.
Hickman used his position as sales manager to offer other companies favorable sales terms to the detriment of Raeford Farms. Hickman had a pre-arranged agreement with an unnamed person and his company to sell the chicken frames to Heritage Food Sales, another company controlled by Hickman.
Heritage paid the 7792 group a guaranteed return on each transaction, but never took possession of the chicken frames or added anything of value to the transaction. Hickman would then sell the same chicken frames to a poultry wholesaler in Chattanooga, TN for a profit.
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To further the fraud scheme, Hickman and others acting in concert with him emailed invoices from Arcadia to Heritage via interstate commerce to receive payment for the chicken frames. Hickman and Whiteman conspired together to hide Heritage from Raeford Farms’ involvement in these chicken frame transactions.
As Assistant Sales Manager for Raeford Farms, Whiteman was responsible for tracking inventory and detailing all shipments. Whiteman provided this type of information to Hickman to further the conspiracy to deceive in order to obtain a higher price for chicken frame loads sold by Heritage.
In exchange for his involvement in the fraud conspiracy, Whiteman understood and agreed with Hickman that Heritage would pay him through its own business unit, All Trade Enterprise, LLC. Hickman paid Whiteman a monthly commission through All Trade and occasionally to him personally. Transactions completed during the study period resulted in an approximate loss of $2,183,950 for Raeford Farms.
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Hickman and Whiteman each face up to five years in prison, three years supervised release, and a fine of up to $250,000.
The verdict was set for July 12.
The case was investigated by the Federal Bureau of Investigation and prosecuted by Alexander C. Van Hook, Special Counsel for US Attorney and Assistant US Attorney Tennille M. Gilreath.
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