Man admits stealing hundreds of thousands from Georgetown company

lucrative kickbacks defrauded Minova

bestep@herald-leader.comJune 8, 2011 

A fourth person has admitted to taking part in stealing hundreds of thousands of dollars from a Georgetown company.

David L. Fox Sr. pleaded guilty Friday in federal court to a conspiracy charge.

Fox acknowledged that he submitted false invoices to Minova for work he didn't do, then kicked back part of the money to officials at the company who were in on the scheme, according to a court document.

Fox faces up to five years in prison. He is scheduled to be sentenced in August in U.S. District Court in Lexington.

The plea was the latest development in a large fraud involving the Minova plant in Georgetown, according to court records.

Minova is an international company that produces chemicals and equipment for use in underground mining. The Georgetown plant is its North American headquarters.

According to court records, John Tapp, then the company's vice president of operations, began working with other employees in 2006 to get kickbacks from vendors that supplied goods and services to Minova.

Tapp had the authority to negotiate contracts with vendors and authorize payments.

In some cases, vendors inflated their charges, then returned part of the excess payment to Tapp and others, according to court documents.

In other cases, vendors billed the company for work they didn't do and kicked back part of the bogus payments to company insiders, records show.

For instance, Fox billed Minova for cleaning and other services that his company didn't really do.

Tapp and Mikel "Mike" Alexander, who was plant superintendent at Minova at one time, made sure Fox got paid, and then Fox returned about 70 percent of the money to Tapp and Alexander, according to Fox's plea agreement.

Fox submitted 52 false invoices to Minova between 2006 and 2009. The company paid him a total of $199,272 on the bogus bills, his plea agreement says.

Tapp also got the company to pay some of his personal expenses and bought expensive items on a company account, then returned them for a personal refund, according to a court document.

His attorney said in a motion that the thefts started small but continued when Tapp couldn't figure out a way to end the scheme without someone else in the company finding out.

Tapp was fired in December 2009. He pleaded guilty last August and was sentenced to 12 months and one day in prison and was ordered to pay $776,521 in restitution.

Alexander also pleaded guilty. He was sentenced to five years' probation and was ordered to pay $148,700 in restitution to the company.

Clifford "Jamie" Bramel Jr., who was the company's maintenance supervisor, also pleaded guilty.

His attorney, Pamela Dae Perlman, said in one memorandum that Tapp approached Bramel at a time when Minova had eliminated overtime and bonuses, raised insurance costs for employees, stopped paying into his retirement account and turned him down for a raise.

"A good man became immersed in a greed-is-good environment," Perlman wrote. "As the company was lowering his benefits, an avenue of 'pay to play' opened. Jamie wasn't strong enough at that point to continue resistance."

A judge placed Bramel on probation for five years and ordered him to pay $63,960 in restitution.

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