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Guilty Plea in Sorority House Scam

Wednesday, July 27, 2016

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A South Carolina attorney behind an effort to construct a 40,000-square-foot, $14 million sorority house at the University of Alabama in Tuscaloosa has admitted to submitting false invoices, federal authorities have announced.

Jennifer Elizabeth Meehan, 39, of Sandy Springs, pleaded guilty July 12 to bank fraud before U.S. District Judge Madeline H. Haikala, according to a release from U.S. Attorney Joyce White Vance.

Jennifer Meehan
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Jennifer Elizabeth Meehan, 39, an attorney and former member of Gamma Phi Beta at the University of Alabama, admitted to defrauding the sorority in connection with a construction of a chapter house.

Authorities say Meehan defrauded the sorority for nearly $400,000 through a scheme that involved submitting false invoices for furnishings and equipment for the Gamma Phi Beta house and receiving payment without providing the items.

Meehan is a University of Alabama graduate as well as a former member of the Gamma Phi Beta sorority.

The Plea

As part of her plea agreement, Meehan agreed to forfeit, as proceeds of illegal activity, $234,648 provided to the government in April, and to pay additional restitution of $34,815 to the Greek Resource Services Inc., a contract company in charge of finances for Greek fraternities and sororities at the university.

In exchange, prosecutors agreed to drop seven other fraud and money-laundering counts brought against Meehan in the 2015 indictment. The government also agreed to recommend a 20-month prison sentence.

She had originally faced a maximum penalty of 30 years in prison and a $250,000 fine.

Presidential Role

Meehan was acting in her position as president of the sorority’s House Corporation Board in an unpaid, volunteer capacity when she carried out the fraud, the U.S. Attorney’s office said.

Between September 2013 and March 2015, Gamma Phi Beta was building a $14 million sorority house and Meehan was responsible for coordinating and purchasing all furniture and associated finishings for the house.

WAR Construction Inc. of Tuscaloosa, built the chapter house.

Bank Fraud

Meehan executed a bank fraud scheme to illegally obtain money from First Citizens Bank & Trust Company and the Bank of Tuscaloosa, prosecutors said.

Gamma Phi Beta Sorority’s account was at the Bank of Tuscaloosa. Meehan admitted to opening an account at First Citizens Bank under a fraudulent business name.

In September and November 2014, Meehan said she submitted fraudulent furniture invoices totaling about $375,000 to Greek Resource Services.  

The invoices, according to prosecutors, were either inflated, reflecting higher prices than was actually paid, or were completely fraudulent and submitted by fictitious companies.

GRS drew money from Gamma Phi Beta’s account at Bank of Tuscaloosa and gave Meehan two checks totaling about $375,000. She deposited that money into the newly opened First Citizens account, authorities said.

In January 2015, Meehan entered a First Citizens Bank & Trust branch in Anderson, SC, and wired $175,000 from the fraudulent business account into her personal business account at Bank of America for personal use, U.S. Attorney Vance said.

GRS reportedly helped uncover the fraud and worked with the Secret Service to investigate.

Sisterhood ‘Disappointed’

Following her arrest in June 2015, the Gamma Phi Beta International Sorority issued a statement that it was “disappointed,” noting that Meehan’s membership in the organization had been terminated.

“Ms. Meehan’s actions and practices circumvented Gamma Phi Beta Sorority, Inc.’s processes and procedures,” the group said.

Further, the sorority said it was cooperating with authorities and would take “every step to work with our members at the University of Alabama to repair the damage done and move forward.”

Founded in 1874 at Syracuse University in New York, Gamma Phi Beta has over 180 collegiate chapters across the U.S. and Canada. The University of Alabama’s recently completed chapter house is the sorority’s largest in the nation, housing 70.

The U.S. Secret Service and the U.S. Postal Inspection Service investigated the case; Assistant U.S. Attorney David H. Estes is prosecuting.

   

Tagged categories: Billings; Building owners; Colleges and Universities; Construction; Fraud; Housing

Comment from Dick Piper, (7/27/2016, 8:21 AM)

She should have jail time. Jail is the only real deterrent for white collar crime.


Comment from Sheldon Wolfe, (7/27/2016, 9:29 AM)

So the sorority is still short $150,000?


Comment from Tom Schwerdt, (7/28/2016, 8:10 AM)

From the article it looks like 20 months of jail time, and the actual value of the furnishings etc provided was $150k


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