( Richmond, VA) – Wanda Branch, age 40, of Richmond, pled guilty today to a one-count criminal information charging her with mail fraud, in violation of 18 U.S.C. § 1341. Three other defendants have previously pled guilty to one count of mail fraud each in connection with the same scheme. Those defendants are: Steven R. Day (54 years old, of Richmond, guilty plea on 8/23/2007), William M. Cooke, Sr. (69 years old, of Richmond, guilty plea on September 6, 2007), and Bernadine Doggett (52 years old, of Richmond guilty plea on October 31, 2007). Although these defendants all engaged in the same scheme, each acted independently. As a result, each defendant was charged in a separate case, which are all pending before United States District Judge Richard L. Williams. Each defendant is facing up to 20 years in prison, a $250,000 fine, and 3 years of supervised release following any prison term. The defendants will be sentenced on the following dates: Day – November 19, 2007; Cooke – December 3, 2007; Doggett – February 7, 2008; and Branch - February 7, 2008.

Chuck Rosenberg, United States Attorney for the Eastern District of Virginia and Charles J. Cunningham, Special Agent-In-Charge, Federal Bureau of Investigation, Richmond Division announced the pleas.

According to court records, each defendant admitted to his or her involvement in assisting Philip Morris USA Inc. employees to withdraw money from Philip Morris’ Deferred Profit-Sharing Plan for Tobacco Workers (“DPSP”) through false hardship applications. The DPSP was a defined contribution (profit-sharing) plan that allowed employees to share in the profits of the employer and to withdraw the accumulated funds only after the occurrence of a permissible event specified in the plan, such as a financial hardship. In the event of a financial hardship leading to a “hardship withdrawal,” a Philip Morris employee could make an early withdrawal, provided the amount of any hardship withdrawal could not exceed the amount actually needed (including any federal and applicable state tax withholding) to satisfy the immediate and heavy financial need. Hardship withdrawals were allowed by the Philip Morris DPSP in certain situations, including a withdrawal to make payment of the costs directly related to the purchase of a principal residence for the employee. If an employee made a hardship withdrawal for the purchase of a residence, DPSP rules required the employee to submit supporting documentation detailing the proposed purchase of the primary residence necessitating the hardship withdrawal. This documentation could include the real estate purchase contract, sales contract of present home (if applicable), itemized statement of closing costs (good faith estimate), addendum to the contract or counteroffers associated with the employee’s proposed purchase of his or her primary residence. The withdrawal request would be submitted to Fidelity Investments Institutional Services Company, Inc., d/b/a Fidelity Employer Services Company (Fidelity), with its corporate headquarters located at 82 Devonshire Street, Boston, Massachusetts, which served as the “third-party recordkeeper” for the DPSP. If approved, the withdrawal check would be mailed from Fidelity in Massachusetts to the requesting employee in Virginia.

In connection with the guilty pleas, each defendant admitted to assisting a Philip Morris employee to submit a false hardship withdrawal request to fraudulently obtain money out of that employee’s DPSP account. In connection with the charged transactions, each defendant admitted to preparing false and fictitious real estate documentation asserting that a Philip Morris employee had a contract to purchase a residence located in the Richmond area. Using the fraudulent documentation, the Philip Morris employee submitted the false Hardship Withdrawal Application requesting a hardship withdrawal of a specific amount (usually ranging into five figures) from the employee’s Philip Morris DPSP account. The employee listed "for the purchase of a primary residence" as the "Hardship Reason" for the withdrawal. Based on the fraudulent documentation, each withdrawal was approved. Upon receipt of the DPSP funds by United States mail from Fidelity, the employee would pay the defendant a few (usually between $1,000-$2,000) for preparing the fraudulent documentation submitted in support of the Hardship Withdrawal Application. In their Plea Agreements, the defendants admitted to the receiving the following amounts as payment: Day made $54,000 in connection with 36 fraudulent transactions; Cooke made $78,000 in connection with 39 fraudulent transactions; Doggett made $26,000 in connection with 13 fraudulent transactions; and Branch made $33,000 in connection with 22 fraudulent transactions.

The investigation was conducted by the Federal Bureau of Investigation. Assistant United States Attorney Michael Gill is prosecuting the case for the United States.