RIVERSIDE, California
A grand jury indictment alleges that a Utah man participated in a long-running scheme in which he sent fake invoices on behalf of a shell company, officials announced this week.
Kevin Scott Horton allegedly sent the fake invoices to defraud an organic produce distributor out of $5.8 million, according to authorities.
Horton, 55, of Saratoga Springs, Utah, is charged with seven counts of mail fraud. He plead not guilty to the charges Tuesday in Riverside federal court.
According to the indictment and other court documents, from February 2000 to April 2018, Horton schemed with Tony Anhtuan Rawlings, 56, of Garden Grove, California.
Rawlings is the management information systems director at Melissa’s World Variety Produce Inc., a Vernon-based company. Horton allegedly defrauded Melissa’s World out of its money through the approval of payment of invoices for fictitious services.
In February 2000, Horton allegedly created a shell company called Creative Network Solutions (CNS).
At Rawlings’s instruction, Horton allegedly created one or two fictitious invoices per month, in which CNS billed Melissa’s for services that CNS did not provide.
Horton provided the fictitious invoices to Rawlings, who approved them and then provided them to a Melissa’s executive, who ensured that Melissa’s World paid CNS the amounts listed on the sham invoices, the indictment alleges.
Rawlings falsely represented to Melissa’s executives that CNS provided information technology and information systems services to Melissa’s. Horton had no background in computers, and CNS never provided services to Melissa’s or any other company, the indictment states.
Horton, along with Rawlings, allegedly caused Melissa’s to send CNS payment through checks mailed through the United States Postal Service, according to the indictment.
Horton allegedly deposited the checks he received through the scheme into a bank account that he controlled. Horton allegedly provided Rawlings a portion of the money that Melissa’s World paid to CNS in the form of checks sent via U.S. Mail to an address in Irvine that Rawlings controlled.
In total, Horton, along with Rawlings, allegedly caused Melissa’s to pay CNS approximately $5.8 million because of the fictitious invoices.
If convicted of all charges, Horton faces up to 20 years in federal prison for each mail fraud count.
Rawlings pleaded guilty in August 2022 to one count of mail fraud. His sentencing hearing is scheduled for June 1.
The FBI investigated this matter.
Assistant U.S. Attorney Eli A. Alcaraz of the Riverside Branch Office is prosecuting this case.