A former Keeneland Race Course employee who admitted receiving more than $338,000 in unreported income was sentenced Wednesday to 24 months in prison.
Larry Wilson, 53, who was employed by Keeneland to maintain the 18 automated teller machines at the track, pleaded guilty in June to four counts of filing false income tax returns for 2006, 2007, 2008 and 2009.
U.S. District Court Judge Joseph Hood did not impose a fine and did not determine how much restitution Wilson should pay. The restitution decision will come at a later date.
Asked for comment after the sentencing, Wilson held up his hand and said, "God's in control, brother."
Both the government and the defense objected to a pre-sentence investigation report which recommended 18 to 24 months imprisonment, a fine of $4,000 to $40,000, and up to three years of supervised release. The report also recommended restitution of $94,828.32.
The two sides disagreed on the amount of unreported gross income Wilson received between June 2006 and March 2009, the term of his employment at Keeneland.
The government maintained that Wilson received $726,080 in gross unreported income. The defense countered that the government chose not prosecute Wilson for theft because it could not prove he stole the money based on the information they possessed, yet tried to assert that he committed the theft for purposes of a longer sentence.
Wilson's employment coincided with Keeneland's decision to bring the cash-machine operation in-house after previously relying upon a vendor for those services. His job was to maintain the ATMs and ensure they were sufficiently filled with cash for Keeneland's patrons to access.
Wilson obtained cash for the ATMs from the track's money room, which contained a large vault with a heavy steel door. The disbursements to Wilson were recorded on blue tickets and currency order forms that listed the time, date and amount distributed to him.
Over the period of his employment, Wilson received $20.8 million in cash for use in Keeneland's cash machines. Wilson disputed this figure.
Wilson claims that other Keeneland employees had access to the cash for the ATMs. The defense said that there were at least five other people with access to the ATM machines or the cash transactions that were required to operate them. The government contends Wilson had exclusive control of the cash from the time it was distributed to him until it went into the ATMs.
"While others may have had possession of keys and codes to the ATMs, only Wilson has the expertise to use those keys and codes," Assistant U.S. Attorney Robert McBride wrote in a sentencing memorandum.
In his sentencing memo, defense attorney Christopher Spedding wrote that "it is obvious from the discovery in this case that Keeneland failed to have in place any appropriate controls regarding the cash room."
Judge Hood took note of that in his comments at the end of the hearing.
"What troubles me about this case and I assume troubles the Keeneland management is that there wasn't better supervision of this employee," Hood said.
The government contends that Wilson obstructed the investigation by attempting to conceal his assets after he became aware of a Lexington police investigation. Days after a police interview, Wilson sold his 2008 Shelby Cobra Mustang for about $27,000 and then deposited the money in an account controlled by his then-attorney Jimmy Dale Williams, according to a government sentencing memo. Wilson than had Williams issue checks to him totaling $22,176, the sentencing memo said.
Wilson also used his mother, Edna, to conceal funds from investigators, the government contends. She opened a checking account in her name for the purpose of assisting Wilson in concealing money from the government. All the deposits were made by him.
In recent years Wilson has been employed as a custodian and maintenance and grounds supervisor at Farristown Middle School in Berea. Several people wrote in support of him.
Among them was Berea Police Chief David Gregory, who wrote a letter saying that Wilson "displayed a high degree of caring about the students and staff at Farristown Middle School."
Logan County Schools Superintendent Kevin Hub, a former assistant superintendent in Madison County, also wrote a letter of recommendation for Wilson.
"As a graduate of the United States Military Academy at West Point, and a lifelong public servant, I can attest to the strong character and value system that Larry possesses," Hub wrote.
Others that wrote letters in support of Wilson included Farristown Middle School Principal Alicia Hunter, Assistant Principal Glenna K. Carter, Madison Southern High Principal Brandon Watkins, Abundant Life Ministries Church of God Pastor Edwin Lainhart, plus Wilson's parents, mother-in-law and wife.
In addressing Judge Hood, Wilson said that "given the opportunity, you'll never see me in this courtroom again."
Hood likened the $20 million that went through Wilson's hands to the story in Genesis where the fruit of the tree of knowledge of good and evil became a temptation to Adam and Eve.
"That apple was there and the bite was taken," Hood told Wilson. "Does that mean you're a bad person. Yes, it does mean you're a bad person. ...Does that mean you're beyond redemption? No."
But Hood said he needed to deter others so that they would not repeat what Wilson did.
"I believe you took somebody else's money," Hood said before pronouncing sentence.
Wilson is free now but must report to prison on Nov. 2. He has asked to serve his sentence at the Federal Correctional Institution at Ashland.