A federal judge Wednesday sentenced a local businessman to three years of probation for orchestrating a kickback scheme involving government funds supposed to be used for cleaning up New Orleans in the wake of Hurricane Katrina.
U.S. District Judge Stanwood Duval ordered the businessman, Anthony Penn, to serve a year of home detention and to pay more than $200,000 restitution to Metro Disposal, a local waste management company that had hired Penn to manage a subcontract it received to clear storm debris from the ravaged city.
The disaster cleanup was administered by the U.S. Army Corps of Engineers, which contracted the project to Phillips & Jordan, a national construction company.
Penn, who was tasked, among other things, with ensuring sub-tier subcontractors were paid on time, approached the owner of Metro Disposal shortly after the storm and persuaded him to hire a small landscaping and construction company based in Stone Mountain, Georgia. That business, KCJ Enterprises, was co-owned by Penn’s brother-in-law, Kenneth Johnson, who later admitted paying $222,000 in kickbacks to Penn and filing false tax returns, according to court records.
Penn had asked Johnson to reward him for steering the subcontract to his company, prosecutors said.
KCJ Enterprises, which has filed suit against Penn and Johnson, claimed the sum paid in kickbacks amounted to about 10 percent of the total amount KCJ received from Metro under its sub-tier contract.
Penn, who pleaded guilty to the conspiracy more than two years ago, admitted the payments had been “strictly unlawful” and did not represent consulting fees, according to court records.
The FBI searched Johnson’s home in 2009 and found a ledger that contained an itemized list of the kickbacks.
Agents determined that Penn had sometimes overpaid Johnson’s company for load tickets that KCJ submitted to Metro Disposal.
Duval sentenced Johnson in September to a similar term of probation and home detention.
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