Former Geminus employee sentenced to two years for stealing federal funds
A former employee of a Merrillville-based not-for-profit service agency was sentenced to two years in prison Tuesday morning after pleading guilty to one count of wire fraud in February.
United States District Court Judge Philip P. Simon sentenced Valencia Franklin of Lynwood, Illinois, to 24 months in prison followed by a year of supervised release in the U.S. District Court Northern Indiana in Hammond. Franklin, 52, was also ordered to pay $352,300 in restitution to Geminus Corporation, her former employer.
Franklin was accused of misappropriating $636,000 in Emergency Rental Assistance funds destined to help renters hang on to their residences during the pandemic by creating false landlords to fraudulently request money from the program, according to an independent audit by an Indianapolis accounting firm. Geminus Corp. discovered discrepancies in its records which led to finding out about the potential fraud in July 2022, according to Bill Trowbridge, president and CEO of Geminus and its umbrella organization, Regional Care Group.
The nonprofit service agency based in Merrillville immediately contacted the U.S. Department of the Treasury and fired Franklin, as well as alerted the accounting firm that does its annual audit. The audit, released in January 2023, covered fiscal years ending in June 2021 and 2022. The $636,000 figure is what Geminus 'had strong suspicions' was fraudulent and reported to the feds and the agency's auditors, Trowbridge said.
Geminus received $40 million in federal funding for the Emergency Rental Assistance program as a pass-through agency, distributing the money throughout Lake County during the pandemic.
During the often emotional hearing, Franklin's attorney, Adam Sheppard, pointed to the adversity Franklin overcame in her life and the fact that she 'didn't try to shift the blame' of her crime to anyone else as mitigating factors. Originally, sentencing guidelines had Franklin facing between 41 months and 51 months.
'Look at the adversity she's overcome: a teenage pregnancy, but then she got her GED, then her associate's degree, a bachelor's degree, a master's degree and a (certified public accountant) degree,' Sheppard said. 'It was a crime of opportunity and greed, and she spent the money on basic needs. There were no luxury cars; she was supporting family and friends — her youngest son and her ailing mother, for whom she's the primary caregiver.
'She recognizes she's jeopardized her freedom.'
Veronica Hill, Franklin's friend since they were in fifth grade, said Franklin has always 'given her all' to make sure everyone else was Ok.
'When we would play ding-dong ditch, Valencia wouldn't play because she was afraid of getting in trouble,' Hill said through tears. 'She has a fear of authority, and she wouldn't do anything to harm the government. It's not who she is.'
In her statement to the court, Franklin — who wept through most of it — said she had 'no excuses' for 'the embarrassment she brought to her family and employer.'
'I was tempted by the easy way out. I failed my job, I failed my community,' she said. 'I let down a young, underprivileged lady, and she deserved better. So did everyone else I failed.
'I will carry the weight of that for the rest of my life. I'm not trying to escape punishment, but I'm asking for mercy.'
Assistant U.S. Attorney Kevin Wolff agreed the case was sad, but said it was also intentional.
'She did the first one for her son, but then she did it again and again and again. It wasn't a passive scheme,' Wolff said.
Simon said he has 'very little concern' that Franklin will ever re-offend, but he had to send a message to the community that stealing from the Federal government will not go unanswered.
'You used family members as props in a jaw-dropping level of criminality,' Simon said. 'And a year after, when you were supposed to send out 1099s for recipients of the money to report it to the IRS, you made efforts that they didn't receive them. You said you're ashamed — well, you ought to be ashamed.
'You were one of the few success stories of the system, and you've thrown it away. But you've totally owned this, which is important for getting it behind you.'
Simon gave Franklin until 2 p.m. August 28 to report to prison, and he said he will see to it that she's close enough to family for their support.
Franklin will likely receive 54 days of good behavior toward her sentence, meaning she'll serve 85% of her sentence, Sheppard said, after which she'll be moved to a halfway house to complete it. He was pleased with the outcome.
'Judge was very thoughtful with the sentencing, and he was considerate,' Sheppard said.
Franklin and her family declined comment through Sheppard.
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