(Richmond, VA) - Wanda Branch, age 40, and Bernadine Doggett, age 52, both of Richmond, Virginia, were sentenced yesterday for their involvement in a mail fraud scheme resulting in a number of fraudulent withdrawals from Philip Morris USA Inc. retirement accounts. United States District Judge Richard L. Williams sentenced both Branch and Doggett to four months' imprisonment followed by four months' home confinement. Both defendants' sentences will be followed by a 3 year term of supervised release. Two other defendants were previously sentenced for their roles in the scheme. Steven R. Day, age 54, of Richmond, was sentenced on November 19, 2007 to 4 months' imprisonment followed by 4 months' home confinement. William M. Cooke, Sr., age 69, of Richmond, was sentenced on December 3, 2007, to 5 months' imprisonment followed by 5 months' home confinement. Although these defendants all engaged in the same scheme, each acted independently. As a result, each was charged in a separate case before Judge Williams. Chuck Rosenberg, United States Attorney for the Eastern District of Virginia; and Jeffrey L. Troy, Acting Special Agent in Charge, Federal Bureau of Investigation announced the sentencings.

Each defendant has admitted to assisting Philip Morris USA Inc. employees make fraudulent withdrawals of money from Philip Morris' Deferred Profit-Sharing Plan for Tobacco Workers ("DPSP"). The DPSP was a defined contribution (profit-sharing) plan that allowed employees to share in the profits of the employer. Participating employees were permitted 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 qualifying hardship, a Philip Morris employee could make an early withdrawal, provided that the amount of any withdrawal not exceed the amount actually needed to satisfy the immediate and heavy financial need. Hardship withdrawals were allowed by the Philip Morris DPSP to, among other things, 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.

Each defendant confessed to assisting Philip Morris employees submit false hardship withdrawal requests to fraudulently obtain money out of DPSP accounts. 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. In fact, none of the employees was purchasing a principle residence. Using the fraudulent documentation, Philip Morris employees submitted the false Hardship Withdrawal Applications to request a hardship withdrawal of a specific amount from the Philip Morris DPSP accounts. The withdrawals usually were in excess of $10,000. The employees falsely listed "for the purchase of a primary residence" as the "Hardship Reason" for the withdrawals. Based on the fraudulent documentation, each withdrawal was approved, though none would have been had the truth been known. Upon receipt of the DPSP funds by United States mail from Fidelity Investments Institutional Services Company, Inc., d/b/a Fidelity Employer Services Company, the third-party recordkeeper, located in Massachusetts, the employee would pay the defendant for preparing the fraudulent documentation submitted in support of the Hardship Withdrawal Application. The payments were usually between $1,000$2,000. In their Plea Agreements, the defendants admitted to receiving the following amounts as payment: Day received $54,000 in connection with 36 fraudulent transactions; Cooke received $78,000 in connection with 39 fraudulent transactions; Doggett received $26,000 in connection with 13 fraudulent transactions; and Branch received $33,000 in connection with 22 fraudulent transactions.

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