Former Missouri Alderman Pleads Guilty to Wire Fraud; Sentenced to 5 Years Probation, Pay $292K Restitution
Former Des Peres Alderman John Pound received five years probation for embezzling money from property management clients. Photo by Des Peres City.
Pound previously pleaded guilty in U.S. District Court in St. Louis on March 7 to three counts of wire fraud in connection with his scheme, according to his plea agreement, which was obtained by The Daily Muck.
Pound, 81, has served on the Des Peres City Legislature for 20 years. After his guilty plea, he resigned from the council and withdrew from the April 2 municipal elections, although it was too late to remove his name from the ballot. Jennifer Weller won that election to the council. Pound received 15 votes, according to a local news outlet.
Anatomy of an Embezzlement
Pound’s Commercial Realty Management, Inc. maintained bank accounts and paid bills for commercial property clients in St. Louis. During the period in question, he admittedly took larger management fees and commissions. He also charged high hourly rates for additional work for which he was owed, according to the press release. Prosecutors said the total amount of the fraud was $220,000.
As part of the scheme, Pound prepared annual budgets misrepresenting the monthly management fee and concealing the inflated fees, the U.S. Attorney’s Office said. From Jan. 1, 2015, through Dec. 31, 2019, he made 132 false entries totaling $190,000 supposedly to a third-party payee that went to him.
The federal indictment alleged Pound “embezzled funds by taking significantly larger management fees, keeping larger commissions, failing to get prior approval for payments to himself, and charging higher hourly rates than specified by the contracts.” It also noted that Pound hid his theft through false accounting entries that misrepresented the payee or the amount of the payments he collected.
From 2010 to June 2020, Pound increased the monthly fees without consulting the property owners and paid himself a “fraudulently increased monthly fee more than 12 times per year,” the indictment states. He also paid himself lease commissions when no commission was due.
As part of the guilty plea, Pound waives all rights to appeal and the DOJ will not pursue any other prosecutions related to the actions during this period. Pound also admits he intentionally participated in a scheme to defraud another with false representations or promises, did so with the intent to defraud, and used an interstate wire communication to carry out an essential step in the scheme, according to the U.S. Attorney’s plea agreement.
Fiore Case
The Missouri case isn’t the only one in which a former municipal official has run afoul of federal fraud laws.
Former Las Vegas City Councilwoman Michelle Fiore – currently serving as justice of the peace in Nye County, Nevada – was indicted July 16 on charges she conducted a scheme to defraud donors to a charity to honor police officers who died in the line of duty. She has pleaded not guilty to the charges.
You can read more about The Daily Muck’s coverage of the Michelle Fiore case here.
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