Posted by Joe -Here is a link that works on 3/15/2008, 4:07 pm, in reply to "Eddie and Micheal Smith"
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Jackson family accused of defrauding government
Staff and Wire Reports POSTED: March 14, 2008 Save | Print | Email | Read comments | Post a comment
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Staff and Wire Reports
CHARLESTON - Members of a Jackson County family have been accused of defrauding $9 million from the federal government by diverting funds from several family owned businesses to themselves.
Eddie Burl Smith, 69, of Sandyville; his son, Edward Michael Smith, 47; Eddie Smith's brother, Donald Paul Smith of Sandyville; Donald Smith's wife, Judith, and their daughter, Jaclyn E. Smith, were each named in the indictment.
Edward Michael Smith owns a home in Mineral Wells.
All five defendants face charges of conspiracy to defraud the federal government. A federal indictment unsealed Wednesday said the money was used to buy race cars and show horses, and to make other personal purchases.
The defendants are accused of conspiring to divert $9 million from Carl E. Smith Inc., also known as CESI, and two subsidiaries for personal purchases by claiming the funds were corporate expenses. CESI, a family owned business in Sandyville that constructed pipeline for natural gas and oil, filed for bankruptcy in 2003.
According to the indictment, after a federal grand jury issued supoenas for CESI records in August 2003, Edward Smith burned documents at his home in Mineral Wells and hid others in a rental storage unit in Parkersburg.
Eddie Smith and Edward Smith also are charged with money laundering, bankruptcy fraud, misapplication of health insurance premiums, embezzlement from employee benefit programs, and other charges.
A woman who answered the telephone Thursday night at Eddie Burl Smith's residence said the family had no comment. She hung up when asked to identify herself.
The alleged conspiracy occurred from early 1998 to November 2006 and used "deceit, craft, trickery and dishonest means," the indictment said.
Personal expenditures included $700,000 that Donald Smith allegedly spent for four horses and $104,279 that Edward Smith spent for a semi truck used to transport race cars.
Judith Smith and Jaclyn Smith are accused of accepting checks from CESI for work they did not perform.
Eddie Burl Smith and Edward Smith are accused of embezzling $562,000 from CESI pension funds and $100,000 earmarked for CESI health care premiums. The father and son also are accused of selling some of CESCIás assets after the company had filed for bankruptcy and diverting $385,000 in proceeds to Smith Well Service, which they had formed on Oct. 3, 2003, the indictment said.
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