UPDATES-Including Federal Charges And Indictment At Bottom:
It appears that there is money missing from the coffers at the city of Nixa.....A LOT of money.
Apparently at least $350,000, with the amount expected to increase, is missing from the Nixa streets department and two men — a city employee and former employee — sit in jail accused of the theft.
A supervisor in the Public Works Department, Larry Covington (above), was busted on charges of felony stealing on Monday. He is being held in the Christian County jail on a bond of $100,000, according to Christian County Prosecutor Ron Cleek.
According to the probable cause statement, an employee of the city contacted City Administrator Brian Bingle to, "report suspicious spending practices by Street Directory Larry Covington during the prior three months."
The employee reported that purchase orders were issued to a company named Ward & Spooner in Spokane, however, no products were ever delivered in exchange for payment of the purchase orders.
Covington allegedly wrote over 50 checks to the same company in Spokane between January of 2007 and February of this year totalling.
Investigators say there really wasn't a business named, Ward & Spooner....however, Covington owned the name for the bogus business.
After an internal audit officials with the city told police that checks written to Ward & Spooner totaled $277,446.78.
Investigators said some of the checks were mailed to 71 W. English Village Park in Nixa.
Detectives determined that from 2000 - 2006 Covington resided at the trailer park.
On February 23, 2009, investigators served a subpoena at the United States Postal Service in Spokane to determine the ownership of P.O. Box 311.
That P. O. Box is registered to Larry Covington; it also lists Dennis Gray as an authorized user.
Covington, who has entered a plea of not guilty, is due back in court on March 31st.
Cleek asked Associate Circuit Court Judge John Waters to seal the court documents related to this case....that motion was denied.
Detectives believe that a former employee of the City of Nixa, David Griggs (b.), was involved in the alleged scheme to bilk the city out of taxpayer money, and a warrant was issued for his arrest on 02-25-09.
Investigators believe that Covington and Griggs conspired to set up another fake business with the name Tri-State Supply.
Court documents indicate that checks from the City of Nixa were issued to Tri-State Supply after Covington initiated purchase orders for payment to the fake business.
Tri-State Supply received checks that totalled $80,301.00 at a P.O. Box in Republic.
A subpoena was served at the United States Postal Service in Republic and the investigation determined that P.O. Box 898 was registered to David Griggs, Tina Griggs and Tri-State Supply.
Nixa Police Office Jeff Romero writes in the probable cause statement that accompanies the charges filed against Griggs, that when he interviewed Covington on February 23rd he admitted that, "he and Griggs came up with the idea and plan together."
Griggs, who was fired by the City of Nixa in 2006, pleaded guilty to forgery in Christian County that same year and was placed on five years probation.
He has entered a plea of not guilty and is due back in court on March 3, 2009.
Cleek says that more arrests and charges are possible, "in the on-going investigation."
The wife of Larry Covington, Paula Covington, has been charged as an accessory to stealing. She was arraigned and posted bond.
Investigators now believe as much as $750,000 is missing from the city.
Larry Covington posted $100,000 bond---as part of the requirements of the bond Covington must wear a GPS monitoring ankle bracelet, surrender his passport, and not sell any property without notifying the court.
The Christian County Headliner has uncovered a document of a transcribed phone call that an anonymous caller placed to authorities in 2006 in an effort to tip them off about schemes that they believed Covington and Griggs were involved in regarding city property.
Then then police chief at the time, Bruce Belin, says that he was not told that the concerns were over property, not missing money.
Larry Covington was also charged with another count of stealing after detectives found rolls of plate metal and tools belonging to The City of Nixa on his property.
In a separate lawsuit not related to the stealing charges a neighbor of the Covingtons, Bobbie Johns says that the couple built a garage/workshop on part of her property.
Johns attorney has notified the city of pending litigation regarding the encroachment on her clients property.
The City of Nixa has also filed a civil lawsuit against the suspects to try and recoup some of the missing money.
Wednesday, April 1, 2009:
Prelim Dates Set For Former Nixa Employees And Wife Of One Charged With Stealing From City:
Three people accused of creating bogus businesses to steal close to a million dollars from the city of Nixa have had preliminary hearing dates set.
Two former city employees Larry Covington and David Griggs are scheduled to appear in court in Christian County on April 24th.
Covington's wife, Paula, is due in court on May 13th.
Christian County Prosecutor Ron Cleek says that the investigation is ongoing and won't rule out that additional charges could being filed in the case.
Larry Covington is free on $100,000 bond and has to wear a court ordered GPS tracking device while free.....Paula Covington is free on $10,000 bond.
Griggs, has not been able to post his $100,000 bond and he remains in lockup in Christian County.
Charges have been dropped against a former City of Nixa employee that was accused in a scheme that cost the city $750,000.
Christian County prosecutor Ron Cleek dismissed stealing charges against David Griggs today (04-15-09).
Court records say that Griggs allegedly set up bogus companies with Nixa Street Department supervisor Larry Covington to steal the money for goods that were not delivered to the city.
Covington's wife, Paula, is charged with stealing in the scheme as well.
Christian County Prosecutor Ron Cleek won't say why he dismissed the charges, however, Griggs remains in jail on a probation violation.
There are a couple of scenarios that could have led to the dismissal of the charges.
- It's possible that the state charge could be replaced with a federal charge.
- Another possibility is that prosecutors agreed to drop the charge against Griggs in return for his testimony against the Covingtons.
According to online court records no federal charges against Griggs or the Covingtons have been filed.
We now know the reason that Christian County Prosecutor Ron Cleek dropped stealing charges against a former City of Nixa employee.
David Griggs, who worked in the street department in Nixa was charged in federal court yesterday in a sealed indictment alleging that he embezzled close to $10,000 from the city.
That indictment was unsealed today.
The federal criminal complaint alleges that Griggs created a fictitious business named Airborne Specialist with the Missouri Secretary of States office to steal $9,858 from the city of Nixa on Nov. 10, 2005.Griggs, who was employed in the city street department from Nov. 6, 2003, to Feb. 8, 2006, allegedly obtained funds by invoicing the city for goods that were never provided.
On Oct. 15, 2005, the city of Nixa approved a $9,858 purchase order from Airborne Specialists (a name that Griggs used interchangeably with his registered business name) for 6,200 pounds of Davies Ultra Melt snow and ice remover.The feds say that product was never delivered to the city.
Former Nixa Street Supervisor Larry Covington and his wife Paula are still facing state charges related to the scheme that cost the city more than $750,000.
No word yet if the state charges against the Covington's will be dropped so that the feds can step in and charge the couple.
Acting United States Attorney for the Western District of Missouri Matt Whitworth said, “Today’s federal criminal complaint is part of an ongoing investigation,” adding, “We anticipate this case will be presented to a grand jury, therefore, we are not able to provide any further details about the investigation. Grand jury deliberations are confidential, which prevents our office from making any additional comments at this time.”
Griggs Released On Own Recognizance Following Detention Hearing:
The last person remaining in jail for allegedly bilking the City of Nixa out of a million dollars has been released on his own recognizance.
David Griggs was charged in a federal criminal complaint last week by U. S. Attorney For The Western District of Missouri, Matt J. Whitworth.
Griggs was released following his detention hearing in federal court in Springfield on Monday, according to Don Ledford, public affairs officer for Whitworth's office.
Ledford said the next step in the federal process is that a grand jury, "will hear evidence in the case and could return with an indictment with the same or similar charges filed in the criminal complaint. He added, "that could include the same or additional co-defendants."
Griggs was originally charged with felony stealing charges in Christian County in late February that alleged he and former Nixa street superintendent Larry Covington, along with Covington's wife, Paula, stole more than one million dollars in a purchase order scheme that included bogus companies the trio fraudulently began in 2004.
Christian County Prosecutor Ron Cleek dropped the state charges against Griggs on April 15 when the feds decided to take the case.
Griggs and his wife filed for bankruptcy protection in December stating that they were about $200,000 in debt from medical bills, student and home loans as well as credit card debt. The Griggses' said they only had about $450.00 in liquid assets available to them; that included some vehicles and personal property.
In March, the trustee in charge of the Griggses' bankruptcy said that Griggs did not list assets from either of his bogus companies, Tri-State Supply or Airborne Specialists....therefore he withdrew a report filed in federal court that stated the couple didn't have the money to pay their creditors.
Criminal charges of stealing are still pending in Christian County against the Covingtons; who are also facing a couple of civil suits (both related and non-related to the money scam.) as well.
The Covington's are currently out of jail on bond....Paula Covington was released after posting $10,000 bond--Larry Covington on $100,000 bond with special conditions set forth in the bond that include him wearing court-ordered GPS monitoring device.
As of noon today (04-22-09) Ledford said no federal complaints against the Covington's have been filed.
Matt J. Whitworth, Acting United States Attorney for the Western District of Missouri, announced Friday that the former street department superintendent for the city of Nixa, Mo., along with his wife and another former city worker, have been indicted by a federal grand jury for a series of mail fraud and money laundering schemes totaling more than $756,000.
Larry W. Covington, 49, and his wife, Paula K. Covington, 52, both of Ash Grove, Mo., and David W. Griggs, 44, of Willard, Mo., were charged in a 51-count indictment returned under seal by a federal grand jury in Springfield on yesterday (05-14-09). That indictment was unsealed and made public Friday upon the arrest and initial court appearance of Griggs.
The federal indictment replaces a criminal complaint that was filed against Griggs on April 15, 2009.
Covington was employed by the city of Nixa from March 6, 2000, to Feb. 23, 2009. He was appointed to be the superintendent of the street department on May 6, 2004.
Griggs was employed as a utility worker in the city street department from Nov. 6, 2003, to Feb. 8, 2006. He was promoted to be the lead utility worker on Aug. 4, 2004.
The federal indictment alleges that Larry Covington and Griggs participated in a conspiracy to defraud the city of Nixa. They allegedly used two businesses established by Griggs - Airborne Specialist (sometimes referred to as Airborne Specialists) and Tri-State Supply - to invoice the city of Nixa for approximately $273,645 in goods and services that were never provided.
The federal indictment also alleges that Larry Covington used a business that he established - Ward & Spooner - to invoice the city of Nixa for approximately $482,365 in goods and services that were never provided.
Mail Fraud Conspiracy:
According to the indictment, Larry Covington and Griggs participated in a mail fraud conspiracy from Oct. 18, 2004, to Feb. 25, 2009. Larry Covington allegedly initiated fraudulent purchase orders for goods and services to be supplied to the city of Nixa by Airborne Specialist/s (Grigg's fake business.)
Larry Covington allegedly submitted 83 fraudulent invoices to the city, totaling $183,435, for goods and services that were never provided by Airborne Specialist(s). In each case, the indictment says, Larry Covington acknowledged receipt of these goods, which were never received.
As part of the conspiracy, the indictment says, Larry Covington also submitted 39 fraudulent invoices from Tri-State Supply to the city of Nixa, totaling $90,209, for goods and services that were never provided by Tri-State Supply. In each case, the indictment says, Larry Covington acknowledged receipt of these goods, which were never received.
Griggs established separate post office boxes for the two businesses. When the city mailed checks payable to the businesses, the indictment says, they were deposited into business bank accounts. Larry Covington and Griggs then split the proceeds of the fraudulent invoices.
In addition to the conspiracy, Larry Covington and Griggs are charged with 11 related counts of mail fraud.
Ward & Spooner Scheme (Covington's bogus company):
According to the indictment, Larry Covington repeatedly used Ward & Spooner to invoice the city of Nixa for goods and services that were never provided. Between Dec. 7, 2004, and Feb. 25, 2009, Larry Covington allegedly submitted 150 fraudulent invoices totaling $482,365 to the city of Nixa for goods and services that were never provided. Larry Covington repeatedly made false representations to the city that Ward & Spooner would supply goods and services, the indictment says, and falsely represented to the city that goods had been delivered and that services had been performed by Ward & Spooner by signing or initialing fraudulent invoices.
Larry Covington established a post office for Ward & Spooner. When the city mailed checks payable to Ward & Spooner, the indictment says, they were deposited into a business bank account.
Larry Covington is charged with 11 counts of mail fraud related to this scheme.
All three defendants are charged with participating in a money laundering conspiracy. According to the federal indictment, between Oct. 18, 2004, and Feb. 25, 2009, Larry and Paula Covington and Griggs conspired to conduct financial transactions involving the proceeds of the alleged mail fraud.
In addition to the conspiracy, Larry Covington is charged with 13 counts of money laundering, Paula Covington is charged with two counts of money laundering and Griggs is charged with two counts of money laundering.
Additionally, Larry Covington is charged with 10 counts of embezzling from an organization receiving federal funds, and Griggs is charged with him in six of those counts.
The indictment also contains forfeiture allegations, which would require the Covingtons and Griggs to forfeit to the government $756,010 as well as their residential property in Ash Grove, a 2004 Bombadier Outlander, three trailers, a 2007 Mahindra tractor, a 2007 Mahindra loader, a 2007 Agri cutter, a 2008 Ford F350 truck, a 2008 Ford Explorer, a Smith & Wesson .22-caliber automatic pistol, a Colt .45-caliber revolver and a Benelli M1.
Read Indictment Here
09N8-CR00381 - ST VS LARRY W COVINGTON
09N8-CR00421 - ST VS DAVID W GRIGGS
09N8-CR00476 - ST V PAULA K COVINGTON