Tuesday, February 11, 2020

Man Who Schemed City Out of $85K Pleads Guilty

Posted By on Tue, Feb 11, 2020 at 11:24 AM

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The son of a former City of Memphis employee pleaded guilty Monday for scheming a city maintenance program and fraudulently making nearly $100,000 in the process.


Karl “Shun” Blackmon, 46, son of Leon Blackmon Sr., 70, who was formerly in charge of the city’s Housing and Community Development (HCD) maintenance program, pleaded guilty to mail fraud and conspiracy.


The HCD program’s purpose is to maintain vacant city-owned lots and properties. From April 2013 until November 2014, Blackmon recruited at least 13 friends and family members to form lawn care companies to participate in the HCD program, according to information presented in court.


Blackmon and Blackmon Sr. instructed the recruits to apply for business licenses, obtain federal EIN numbers, open post office boxes and business bank accounts, and finally apply to become city vendors.


A list of city-owned properties was given to the recruits and invoices for their work was sent to Blackmon Sr.. Except, at least half of the properties shown on the invoices were fraudulently billed and the work was never done.


City checks were generated and mailed to the recruits who then shared a portion of the money with Blackmon. The scheme costs the city approximately $84,665.


U.S. Attorney D. Michael Dunavant said the fraudulent scheme has “significant financial consequences to the public interests of the city of Memphis and created unfair business advantages for vendors in the HCD maintenance program.


“This office is committed to the protection of the integrity of public services, and schemes to defraud programs or compromise public office will not be tolerated,” Dunavant said. “This case demonstrates our commitment to protect taxpayer resources from such disturbing crimes of dishonesty, and to eliminate fraud, waste, and abuse in government programs.”


Blackmon pleaded guilty Monday and now faces a maximum sentence of 20 years in federal prison followed by three years supervised release. His sentencing hearing is set for May 22, 2020, before U.S. Circuit Judge Sheryl Lipman. Charges against Blackmon Sr. and eight other alleged co-conspirators are still pending.


The case was investigated by the U.S. Postal Inspection Service and the Federal Bureau of Investigation.

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