Several people from Arkansas and beyond testified Wednesday before a federal jury that they sent money between 2004 and 2011 to a woman in Southaven, Miss., to pay for credit-repair services or federal grant money that never materialized, and then found they couldn't get their money back.
Prosecutors say that's because the "opportunity" offered by Sherry LaJoyce Mance, who lives in a small town near Pine Bluff, and Tiffany Morris of Southaven, was a scam designed only to enrich the women themselves.
Mance and Morris were jointly indicted Jan. 8, 2014, on a charge of wire-fraud conspiracy and seven individual counts of wire fraud.
Mance, 50, was expected to be tried alongside Morris in the Little Rock courtroom of U.S. District Judge D. Price Marshall, but she pleaded guilty Feb. 19 to the conspiracy charge in exchange for the other charges being dropped. Mance's plea agreement also required her to testify as a government witness at Morris' trial, which she did Wednesday.
In opening statements Tuesday afternoon, Assistant U.S. Attorney Allison Bragg told jurors that Mance and Morris worked together to entice people into giving them cashier's checks or wiring them money through Money Gram stations. In return, "clients" were promised that they would see their credit scores improve, enabling them to get lower financing on loans, or that they would receive federal money to help them pay off debts, go to college or whatever else they needed it for, she said.
"This business had all the trappings of a legitimate business," Bragg told the six women and six men on the jury, noting that the women flashed business cards and referred clients to their website. But in reality, she said, "No one's credit was actually repaired. No one actually received grant money."
The clients paid $250 in most cases to obtain one of the services, and they were offered incentives to encourage other family members and friends to "enroll" in the programs as well, they said.
Morris' attorney, Mike Spades of Little Rock, suggested to jurors that Mance was the mastermind of the operation who drafted all the official-looking documents they used; actively solicited clients, even by traveling to California; and instructed people to wire their money to her "partner," Morris, in Mississippi.
"There was a market out there for services that could help people improve their credit and get a home," Spades said, reminding jurors that the economy was different then, with home prices on the rise and not as much technological scrutiny as there is today.
He said Morris was in her 30s and "ambitious, wanting to move ahead."
Noting that there were "a lot of startup companies" at the time, he said, "This was an opportunity. I think we'll all agree this was something that went bad."
Clara Collins of Little Rock testified that she and her husband, Kenneth, each paid $550 to Mance for credit-repair services while they were seeking a construction loan to build a house. She said Mance told her not to contact the credit bureau to check on her credit score "or that would mess up what she was doing for us and other people enrolled in the program."
Collins said her husband asked for their money back after a Regions Bank loan officer told them their credit score hadn't changed, and Mance scolded her for "messing up" and said they would have to pay $1,100 again to get re-enrolled -- which they did.
Eventually, she said, her husband called the Arkansas attorney general's office, which pursued the women in a civil lawsuit that prompted U.S. District Judge Susan Webber-Wright to find in 2009 that they had violated the Arkansas Deceptive Trade Practices Act and ordered them to cease and desist. Wright also ordered the women to pay restitution of $127,564 and imposed civil penalties, but it wasn't clear on Wednesday whether the money was ever collected.
Katherine Greer of Helena-West Helena told jurors Wednesday that she paid $250 to receive $5,000 in grant funds only because "it was free money."
The trial resumes at 9 a.m. today.
Metro on 02/26/2015