Former Bay Springs City Clerk Randy James pleaded guilty Wednesday to money laundering and making false statements on a federal tax return before Senior U.S. District Judge Keith Starrett in Hattiesburg.
James, 56, is scheduled to be sentenced by Judge Starrett on Jan. 12, 2021, at 10:30 a.m. in Hattiesburg. James faces up to 10 years in federal prison, a $250,000 fine, and up to three years of supervised release for money laundering.
Additionally, James faces up to three years in prison, a $250,000 fine, and one year of supervised release for making false statement on a Federal Income Tax Return.
During 2017 and 2018, James was Bay Springs City Clerk, and had control over certain financial aspects of the city. During this time, James embezzled more than $300,000 by creating fraudulent invoices from fictitious companies for the costs of false services that were never approved or incurred by the city. James diverted city funds by obtaining checks from the City of Bay Springs, cashing the checks at a local bank, and wiring those funds overseas to international scammers in the hope of winning money in a lottery scheme.
According to the Criminal Information filed in this case, James also made false statements on his personal 2018 Federal Income Tax Return by under-reporting gross receipts by $193,331.
The State Auditor’s Office previously issued a demand letter to James for $325,562, which included the amount of his embezzlement, plus interest and investigative costs. In his publicly filed plea agreement with the U.S. Attorney’s Office, James agreed to pay a total of $420,562 in restitution.
U.S. Attorney Mike Hurst said James was charged for his criminal activity because of a strong investigation.
“One of the highest priorities of this office is bringing to justice corrupt officials who betray our public trust,” he said. “I commend local bank employees who spotted this criminal activity, as well as our federal, state, and local law enforcement partners and prosecutors who were diligent in catching this crook and holding him accountable. We will continue to do all that we can to root out criminality and corruption in all forms of government.”
State Auditor Shad White said James’ corruption was especially severe in Bay Springs.
“This loss is massive for a town the size of Bay Springs – over 10 percent of their annual budget,” he said. “Our small towns cannot afford to lose a single penny right now. My office will work to hold fraudsters like Randy James, who knowingly steal your money, accountable with zero tolerance for this kind of theft.”
Hurst commended the federal, state and local law enforcement cooperation displayed in this case. The case was investigated by the Mississippi State Auditor’s Office and by agents for the Internal Revenue Service – Criminal Investigations. The case is being prosecuted by Assistant U.S. Attorney Stan Harris.