Three indicted for conspiracy to defraud Tracker Marine

The owners of a Lebanon trucking company and another defendant were indicted yesterday by a federal grand jury for a conspiracy to defraud Springfield-based boat and trailer manufacturer Tracker Marine LLC, a division of Bass Pro Shops.

Husband and wife James Ivey, 51, and Kay Ivey, 42, both of Lebanon, and Paul Hunting, 39, formerly of Lebanon, were charged in a 35-count indictment by a Springfield grand jury, according to a news release from the office of the U.S. attorney for the Western District of Missouri.

The Iveys owned and operated J&M Trucking Inc., which contracted with Tracker Marine to transport its boats and trailers to dealers nationwide. Hunting worked at Tracker Marine and was promoted to transportation manager in 2006. According to the indictment, J&M's compensation was determined primarily by the distance its trucks traveled.

The charges allege that from January 2006 to April 2009 the co-defendants schemed to defraud Tracker Marine by inflating purchase orders and shipping invoices. During the time frame, more than 2,550 fraudulent invoices were submitted to Tracker Marine, causing a total loss of more than $850,000, the release said.

To accomplish the scheme, the indictment alleges that Hunting caused Tracker Marine to make payments to J&M in excess of the contract amount by listing an inflated and false number of miles on purchase orders. James Ivey allegedly paid Hunting a portion of the falsely generated revenue in cash from 2006 to 2008, resulting in total payments of $276,775.

The scheme initially had no set amount for the number of inflated miles, but in April 2006, according to the indictment, Ivey and Hunting agreed to set an amount of 158 miles to be added to each purchase order, because when multiplied by the reimbursement rate at the time of $1.90 per mile, the result was an additional $300 per trip, allowing for a three-way split between Hunting and the Iveys.

The set amount of 158 allegedly continued even after the reimbursement rate was raised to $2.10 per mile in January 2007. During the scheme, J&M paid its drivers for the actual miles they drove rather than the number of miles shown on invoices and kept the difference, according to the release.

The indictment claims Hunting claimed some of the cash payments on his federal income tax return as income from a made-up catering business, while the Iveys allegedly claimed the payments represented a portion of revenue generated by two trucks they said were owned by Hunting and were leased to J&M, a false statement.

In addition to fraud and money-laundering, the Iveys are charged together in nine counts of wire fraud, and they are charged with one count apiece of making false statements to federal agents. James Ivey is charged with an additional 10 counts of wire fraud. Hunting also is charged with one count of willful failure to make an income tax return for 2007, according to the release.

The case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich and was investigated by the FBI and IRS-Criminal Investigation.