 |
Department of Justice United States Attorney David L. Huber Contact: Sandy Focken |
Return to the Press Release Index
August 11, 2008
TENNESSEE CONTRACTOR CHARGED WITH DEFRAUDING YUM! BRANDS OVER $566,000
– 58 fraudulent claims submitted
LOUISVILLE, KY - Tommy Hester, age 42, of Franklin, Tennessee, was arrested U.S. Attorney David L. Huber of the Western District of Kentucky announced today. A federal grand jury in Louisville, Kentucky had returned an indictment on August 5, 2008 charging Hester with one count of wire fraud,.
The Indictment alleges that Hester owned and operated Clancey General Contractors with his wife, R.H. Clancey General Contractors was a construction business located in Franklin, Tennessee, that routinely contracted with YUM! BRANDS, INC. ("YUM!") to perform repairs on company owned stores. YUM! is a business headquartered in Louisville, Kentucky, that owned and operated various fast food restaurants, including Pizza Hut and Taco Bell. YUM! both owned individual restaurants and sold the franchise rights to restaurants. YUM! owned and operated Taco Bell and Pizza Hut restaurants in Tennessee, Louisiana, and Florida. The management of these restaurants was operated out of YUM!'s Louisville, Kentucky, headquarters. Hester was required to submit invoices to YUM!'s Louisville, Kentucky, headquarters for any work he completed on individual YUM! owned stores. From November 2005 through August 2006 Tommy Hester, through Clancey General Contractors, submitted invoices to YUM!'s Louisville, Kentucky, headquarters in which he claimed he completed work on YUM! stores located in Tennessee, Louisiana, and Florida. Tommy Hester caused the fraudulent invoices to be submitted via facsimile from Clancey General Contractors's office in Franklin, Tennessee, to YUM!'s Louisville, Kentucky, headquarters. The work claimed on the invoices was not performed by Hester or his company, Clancey General Contractors, and because of the fraudulent invoices YUM! issued approximately $566,000 in payments.
The indictment identifies 58 separate instances in which Hester fraudulently billed YUM! for repair work completed. In nearly every instance no work was completed by Hester. For example, on or about August 31, 2006, Hester submitted via facsimile a Clancey General Contractors invoice no. 60285, dated May 29, 2006, in the amount of $14,828.61 for work purportedly completed on a Louisiana Taco Bell, store number 2454. The May 29, 2006, facsimile was sent in interstate commerce from Clancey General Contractors's office in Franklin, Tennessee, to YUM's Louisville headquarters. Hester submitted the invoice knowing that the claimed work was not completed. YUM subsequently issued a check in the amount of $14,828.61 for the work claimed on the invoice no. 60285. The indictment identifies 57 other instances in which Hester submitted similar invoices. In all, Hester submitted fraudulent invoices totaling $566,000 and caused YUM! to pay Hester approximately $475,000.
In the event of a conviction, the maximum potential penalties are 20 years imprisonment, a $250,000 fine, and supervised release for a period of three years.
The case is being prosecuted by Assistant United States Attorney Bryan R. Calhoun, and it was investigated by the Federal Bureau of Investigation.
Hester appear today for arraignment before the United States Magistrate Judge in Louisville, Kentucky.
* * *
The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless
proven guilty.
#####
Return to the Press Release Index