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United States v. Pearson

United States District Court, W.D. Missouri, Western Division

October 18, 2016

UNITED STATES OF AMERICA, Plaintiff,
v.
FREYA D. PEARSON, Defendant.

          ORDER

          SARAH W. HAYS UNITED STATES MAGISTRATE JUDGE

         Pending before the Court is Defendant Pearson's Motion to Sever Counts for Trial (doc #48). Defendant argues that Counts One through Eight should be severed and separately tried from Count Nine.

         I. THE INDICTMENT

         On October 28, 2014, the Grand Jury returned a nine count indictment against defendant Freya D. Pearson. The indictment charges in part:

         Introduction

1. In 2008, Marva Wilson won approximately $2 million in the Missouri lottery. Wilson was 60 years old at the time and financially unsophisticated. Upon winning the lottery, Wilson bought two houses and with the aid of a financial advisor, established an annuity that would have paid her approximately $30, 000 per year for the rest of her life.
2. In September 2009, defendant Freya Pearson created the nonprofit entity Recidivism at Work (RAW).
3. In approximately January 2010, Wilson was introduced to Pearson, who was unemployed. At that time, Pearson's only income came from child support and Social Security benefits for one of her children. In 2011, Pearson also began receiving welfare and/or food stamp benefits.

         Scheme and Artifice to Defraud Wilson and to Evade Taxes

4. In the spring of 2010, Pearson convinced Wilson to wire transfer a total of $480, 000 to Pearson's account. Whether the money was an investment or a business loan, Pearson materially omitted to disclose to Wilson that she would use the money to gamble and for her own personal expenses.
5. On or about April 22, 2010, Pearson opened a Bank of America nonprofit checking account, number ending 6167, in the name of RAW, over which Pearson had sole signature authority. Pearson instructed Wilson to withdraw her lottery winnings from a John Hancock annuity account that had been established for Wilson by a legitimate financial advisor; the funds were then deposited into Wilson's personal checking account at UMB, account number ending 5583.
6. On April 23, 2010, May 12, 2010, and June 3, 2010, in the Western District of Missouri, at Pearson's direction, Wilson wired the amounts of $180, 000, $240, 000, and $60, 000, respectively, from her UMB checking account into Pearson's RAW checking account, for a total of $480, 000.
7. Pearson used the $480, 000 to gamble, travel, buy cars, clothes, and furniture, and pay rent while she lived in the St. Louis metropolitan area. No identifiable money was used for the nonprofit entity, nor for any business purpose. Between July 2010 and August 2011, Pearson deposited a total of $38, 170 into Wilson's account disguised as annuity or allowance payments, bringing Pearson's unreported income total to $441, 830.
8. On or about May 18, 2010, Pearson set up an additional Bank of America account for RAW, savings account number ending 5535, which was used only to receive transfers from the RAW checking account number 6167.
9. Pearson filed for Chapter 7 bankruptcy protection on December 2, 2010, in St. Louis, Missouri, and submitted schedules she signed under penalty of perjury stating she had only $1, 770 in assets, $91, 883.42 in unsecured debts, and no job. Pearson did not disclose either of the RAW bank accounts, which on December 2, 2010, had balances of $51, 493.99 and $5, 012.34, for a total of $56, 506.33. Nor did ...

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