The defendants contracted with staffing firms to provide payrolling services—a service where staffing firms typically place workers sourced by clients on their payrolls. In this case, the defendants turned in false time cards to the staffing firms and often placed one another as payroll employees to be paid by staffing firms, according to the indictment.
Defendants then refused to pay staffing firms for their services citing several excuses such as slow government payment cycles, according to the indictment.
The alleged incidents took place between October 2002 and February 2005.
The defendants formed several client companies located at the same address in Colorado Springs and claimed they had large contracts with government agencies such as the Department of Homeland Security, U.S. Bureau of Prisons and the New York City Police Department, according to the indictment.
The defendants include David Banks, Demetrius Harper, Gary Walker, Clinton Stewart, David Zirpolo and Kendrick Barnes. They each face up to 20 years on charges of mail and wire fraud and conspiracy to commit mail and wire fraud. In addition, they face fines of up to two times the gains from the fraud and/or $250,000, according to the indictment.
The indictment was filed June 9 in U.S. District Court, and the defendants are scheduled to make their initial court appearance June 23.
Staffing firms listed as victims in the indictment include Robert Half International Inc.; Adecco; Kforce Inc.; Analysts International Corp.; Manpower Inc.; CIBER; Todays Staffing; Talent Tree; Computer Task Group; Option One Inc./Mentor 4; Pro Staff; Professional Consulting Network; Organic People; Computer Horizons; Interactive Business Systems; Systems Engineering Services Corp.; Aquent; Sunnyside; the Job Store; Personnel Plus; Express Personnel Services; ETI Professionals Inc.; Labor Ready; Lloyd Staffing; Productive Data Solutions Inc.; Idea Integration; TAC Worldwide; Snelling Personnel Services; Spherion; AppleOne; SOS Staffing; Technisource; ESG Consulting Inc.; Kelly Services Inc.; Staffmark; the Computer Merchant; Judge Technical Services Inc.; Boecore; MSX International; Headway Staffing; and Blackstone Technology Group.