Feb 24, 2016

Polygamous sect’s leaders arrested on fraud charges

Associated Press
February 23, 2016


FBI
ST. GEORGE, Utah — A federal indictment unsealed Tuesday in Salt Lake City charges 11 members of the Fundamentalist Church of Jesus Christ of Latter Day Saints with conspiracy to commit food stamp fraud and money laundering.

The defendants include leaders of the church.

The indictment alleges church leaders diverted Supplemental Nutrition Assistance Program proceeds from authorized beneficiaries to leaders of the FLDS Church for use by ineligible beneficiaries and for unapproved purposes. A large percentage of FLDS Church members living in the community known as Short Creek on the Utah-Arizona border receive SNAP benefits, amounting to millions of dollars per year.

The case was unsealed hours after residents of the border towns of Hildale, Utah, and Colorado City, Ariz., took to social media to report FBI agents had raided some church buildings and were carrying out boxes of items.
Among those arrested was Lyle Steed Jeffs, 56, the bishop of the congregation. Jeffs’ reported second-in-command, John Clifton Wayman, 56, was also among those arrested.

The other nine people arrested in connection with the court case Tuesday included Kimball Dee Barlow, 51, Winford Johnson Barlow, 50, Rulon Mormon Barlow, 45, Ruth Peine Barlow, 41, and Preston Yates Barlow, 41, all of Hildale; Seth Steed Jeffs, 42, of Custer, S.D.; and Hyrum Bygnal Dutson, 55, Kristal Meldrum Dutson, 55, and Nephi Steed Allred, all of Colorado City.

Federal prosecutors are expected to argue Wednesday that the 11 defendants should be kept in custody and not set at liberty for fear they might “present a flight risk,” according to the government’s motion filed late Tuesday.

The defendants are charged with one count of conspiracy in relation to the SNAP benefits fraud and a count of conspiracy to commit money laundering.

Lyle and Seth Jeffs are brothers of FLDS leader Warren Jeffs, who is serving a life-plus-20-years prison sentence in Texas following his conviction in 2011 on charges of child sexual assault. Many other FLDS leaders were also convicted in Texas on similar charges relating to the church’s practice of marrying underaged girls to often much-older men.

FLDS community watchers claim Warren Jeffs continues to lead the church from prison through contact with Lyle, although the church generally avoids discussing its activities with outsiders. Seth reportedly leads a growing FLDS congregation in rural South Dakota.

“This indictment is not about religion,” U.S. Attorney John Huber said. “This indictment is about fraud. This indictment charges a sophisticated group of individuals operating in the Hildale-Colorado City community who conspired to defraud a program intended to help low-income individuals and families purchase food.”

The indictment alleges that starting in about 2011, FLDS leaders, including Lyle Jeffs, instituted what they called a “United Order” within the ranks of the church.

Members of the United Order must donate all of their material assets to the FLDS Storehouse, a communal clearinghouse charged with collecting and disbursing commodities to the community. United Order policy also dictates that members must obtain their food and household commodities solely through the FLDS Storehouse, according to the indictment.

The indictment alleges that the defendants defrauded the SNAP program by diverting its funds from authorized beneficiaries to leaders of the FLDS Church without authorization. Church leaders, including Lyle Jeffs, Seth Jeffs, John Wayman and Kimball Barlow, held meetings in which they disseminated storehouse protocols that dictated methods for unlawfully diverting SNAP benefits to the FLDS Storehouse as well as instruction on how to avoid suspicion and detection by the government, according to the indictment.

FLDS members transferred their SNAP benefits to FLDS controlled stores without receiving eligible food products at the time of the transactions.

The indictment alleges that SNAP fraud proceeds were used for ineligible paper products, a John Deere tractor, and a 2012 Ford F-350.

The potential penalty for conspiracy count is five years in prison. The money laundering count carries a potential penalty of 20 years in prison.

Cedar City private investigator Sam Brower, who began working on behalf of former FLDS members who were exiled by the church, said it appears that federal officials are finally making a serious effort to intervene on behalf of residents.

“It’s a big step and a big day,” Brower said. “They really do need to start treating it like what it is – a criminal organization.”

Defendants arrested Tuesday in the Short Creek area will appear Wednesday at 10 a.m.in federal court in St. George.
The arrests come amid a civil rights trial in Phoenix against the twin polygamous towns of Hildale and Colorado City, Arizona, in which prosecutors say the communities discriminated against non-members by denying them housing, water services and police protection.

Federal labor lawyers also are going after the group on allegations that leaders ordered parents to put their kids to work for long hours for little pay on a southern Utah pecan farm.

The communities deny the allegations.

Contributing: The Associated Press

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