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Things to know about polygamous sect food stamp fraud case

2016-04-05 Source:bigstory.ap.org Author:Brady Mccombs

Lyle Jeffs' attorney Kathryn Nester leaves the federal courthouse Wednesday, Feb. 24, 2016, in Salt Lake City. Lyle Jeffs and another polygamous sect leader in Utah are pleading not guilty to orchestrating what prosecutors call a wide-ranging food-stamp fraud scheme. (AP Photo/Rick Bowmer)

FILE - In this Nov. 15, 2010 file photo, Warren Jeffs sits in the Third District Court in Salt Lake City. Multiple people were charged with food stamp fraud and money laundering, including Lyle Jeffs and Seth Jeffs, top-ranking leaders of the Fundamentalist Church of Jesus Christ of Latter Day Saints and brothers of imprisoned sect leader Warren Jeffs. (Trent Nelson/The Salt Lake Tribune via AP, Pool, File)

This photo provided by Andrew Chatwin shows law enforcement officers conducting a search at Reliance Electric in Hildale, Utah, Tuesday, Feb. 23, 2016. Police are searching businesses in a polygamous town on the Utah-Arizona border. The U.S. Attorney's Office in Utah said in statement Tuesday that federal, state and local authorities are carrying out actions approved by a court. Officials didn't elaborate, saying court documents are sealed. (Andrew Chatwin via AP)

Thomas Jeffs, the son of Lyle Jeffs, foreground, and Roy Jeffs, son of jailed polygamous leader Warren Jeffs, leave the federal courthouse Wednesday, Feb. 24, 2016, in Salt Lake City. Lyle Jeffs and another polygamous sect leader in Utah are pleading not guilty to orchestrating what prosecutors call a wide-ranging food-stamp fraud scheme. The two men are former members of the sect. (AP Photo/Rick Bowmer)

This Tuesday, Feb. 23, 2016 booking photo released by the Davis County, Utah Jail shows Lyle Jeffs. On Tuesday, several top leaders from Warren Jeffs' polygamous sect, including Lyle Jeffs, were arrested on federal accusations of food stamp fraud and money laundering marking one of the biggest blows to the group in years. (Davis County Jail via AP)

SALT LAKE CITY (AP) - Warren Jeffs' polygamous sect on the Utah-Arizona border is reeling after 11 members were indicted this week on allegations that leaders carried out widespread food stamp fraud and money laundering.

A closer look at what's happening:


Federal prosecutors say church leaders orchestrated a yearslong scheme instructing members how to use food-stamp benefits illegally for the benefit of the faith and avoid getting caught.

Followers would scan their food stamp debit cards at church-run stores, leaving the money with the owners, prosecutors say. Group leaders then funneled money to front companies. Some of those funds were used to pay thousands for a tractor and a truck, the indictment shows.

The volume of food stamp purchases at two small convenience stores was so large that it rivaled retailers the size of Wal-Mart and Costco, prosecutors say, with the total amount diverted and laundered estimated at $12 million.

Another common practice was buying groceries with food stamps and giving the supplies to the church's communal storehouse for leaders to divvy up.


In the sister cities of Hildale, Utah, and Colorado City, Arizona - the base for the group known as the Fundamentalist Church of Jesus Christ of Latter Day Saints. The sect is a radical offshoot of mainstream Mormonism, which disavowed polygamy more than 100 years ago.

Defense attorneys have not yet commented on the allegations. The sect does not have a spokesman or a phone listing where leaders can be contacted.


Several key players in the sect:

- Lyle Jeffs, who runs day-to-day operations in the community by carrying out orders from his imprisoned brother Warren Jeffs.

- Seth Jeffs, another brother who runs the group's South Dakota compound.

- John Wayman, a confidant of Warren Jeffs' who handles legal and tax issues.

- Nephi Steed Allred, an accountant who set up corporations and helped move around the group's money, prosecutors say.

They face up to five years in prison on the fraud charges and up to 20 years in money laundering.

Warren Jeffs was not charged in the scheme. The sect leader has been in a Texas prison for years, serving a life sentence for sexually assaulting two young girls he considered brides.

Prosecutors and former members say he leads from behind bars by communicating via mail and occasional phone calls.


Four suspects are still at large. Three lower-level defendants are out on supervised release. The key players are behind bars pending detention hearings in federal courts in Utah and South Dakota.

Prosecutors have asked judges to keep them in custody, arguing they are likely to flee and try to hide in the group's elaborate network of houses throughout the U.S., Mexico and Canada. They say the polygamists likely would use aliases, disguises, false identification and prepaid cellphones to avoid being caught - just as Warren Jeffs did in the mid-2000s.

Prosecutors revealed in court documents that Lyle Jeffs has a ranch in South America, according to one of his estranged wives.


Yes, but this crackdown marks one of the biggest blows to the group in years.

It comes amid a civil rights trial in Phoenix against the Utah-Arizona community, which prosecutors say discriminated against nonbelievers by denying them housing, water services and police protection.

Federal labor lawyers also are going after church leaders on allegations that they ordered parents to put their kids to work for long hours for little pay on a Utah pecan farm.

The community denies the allegations.

In 2008, authorities carried out a massive raid on the sect's remote Texas ranch, collecting evidence that sent Warren Jeffs and several of his deputies to prison.

In 2005, Utah seized control of a church trust holding more than 700 homes estimated to be worth over $100 million amid allegations of mismanagement.


Prosecutors aren't unveiling exactly how they discovered the scheme, but a steady exodus of followers who have left or been kicked out of the sect in recent years has given investigators an expanding pool of witnesses to help unlock secrets about its operation.


No, though it was expected to rattle the group.

Mid-ranking leaders who have been closely involved in business and religious dealings will likely fill the vacated roles, even it takes time to find their footing, former members and experts say.

Warren Jeffs will likely spin the arrests by telling his flock that the crackdown is further proof the government is an evil entity out to attack their way of life, ex-followers say.