Memphis, TN –Karl "Shun" Blackmon, 46, has pleaded guilty to mail fraud and conspiracy. U.S. Attorney D. Michael Dunavant announced the guilty plea today.

According to the Superseding Indictment and information presented in court, from April 2013 until November 2014, Karl "Shun" Blackmon defrauded the City of Memphis's ("City") Division of Housing and Community Development ("HCD") maintenance program. The purpose of that program is to maintain vacant City-owned lots and properties.

During that time, Karl Blackmon's father, Leon Blackmon, Sr., worked for the City and was in charge of that program. Karl Blackmon recruited at least 13 family, friends, associates, and employees to establish lawn care companies in order to participate in the HCD maintenance program. Karl Blackmon and Leon Blackmon Sr. instructed those recruits to apply for business licenses, obtain federal EIN numbers, open post office boxes and business bank accounts, and apply to become City vendors. Karl Blackmon distributed lists of properties to his recruits, and caused invoices to be submitted for those recruits to Leon Blackmon, Sr. under the City's HCD maintenance program.

At least half of the properties shown on the invoices were fraudulently billed; meaning the work shown was not done. The fraudulent invoices resulted in City checks being generated and mailed to Karl Blackmon's recruits via the U.S. Postal Service. Karl Blackmon met the recruited vendors in Memphis, where he was paid a portion of those recruits' City checks.

As a result of this fraud scheme, the City paid approximately $84,665 under the HCD maintenance program to lawn care companies that Karl Blackmon recruited. Charges against Leon Blackmon, Sr. and eight other alleged co-conspirators are still pending.

Sentencing for Karl Blackmon is scheduled for May 22, 2020, before U.S. District Court Judge Sheryl H. Lipman, where he faces a maximum sentence of 20 years in federal prison followed by 3 years supervised release.

U.S. Attorney D. Michael Dunavant said, "This long-term fraudulent scheme had significant financial consequences to the public interests of the City of Memphis, and created unfair business advantages for vendors in the HCD Maintenance Program. This office is committed to the protection of the integrity of public services, and schemes to defraud programs or compromise public office will not be tolerated. This case demonstrates our commitment to protect taxpayer resources from such disturbing crimes of dishonesty, and to eliminate fraud, waste, and abuse in government programs."

The U.S. Postal Inspection Service and the Federal Bureau of Investigation investigated this case.

Assistant U.S. Attorneys Damon Griffin and Murre Foster are prosecuting this case on behalf of the government.

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Memphis, TN – Former City of Memphis Division of Housing and Community Development employee Leon Blackmon Sr. and eight other relatives or acquaintances were indicted for their roles in a government-contracting scheme that defrauded the City of Memphis (City) and taxpayers by causing the City to pay out at least $1.6 million to City vendors, of which at least 50% of said funds resulted from fraud. D. Michael Dunavant, U.S. Attorney for the Western District of Tennessee announced the indictment today.

Those charged in the indictment include the following named defendants:

Leon Blackmon Sr., 70, Memphis, TN., former City of Memphis employee

Leon Blackmon Jr., 41, Memphis, TN.

Karl "Shun" Blackmon, 46, Memphis, TN.

Larry Donnell Banks Jr., 42, Memphis, TN., Banks Lawncare & Landscaping

Charles M. Bell, 33, Memphis, TN., Charles Bell’s Lawn Care

Shaunita Lacole Callicutt, 39, Arlington, TN., A Perfect Edge Lawn Service, L&S Lawn Maintenance, and Professional Mowers of Memphis

Sharon D. Taylor, 59, Memphis, TN., Sharon’s Lawn Service

Teressa Lynn Taylor, 61, Memphis, TN., TLT Beautiful Lawns

Henry J. Taylor, 68, Memphis, TN., Hank’s Lawn Service

Mendel L. Wade, 55, Memphis, TN., Lisdel Lawn Service

According to the indictment, from 2009 to 2016, Leon Blackmon Sr., an Analyst with the City of Memphis-Division of Housing and Community Development (HCD), maintained the City-owned lots and properties list and selected vendors to maintain those lots under the City HCD Maintenance Program. He received, reviewed, approved vendor invoices for the HCD Maintenance Program, then submitted check requests to the City requesting that those vendors be paid.

It was a part of the scheme that Leon Blackmon Sr., Leon Blackmon Jr., and Karl Blackmon recruited family, friends, associates or employees from their auto businesses to establish lawn companies and to become City vendors. The Blackmons directed these individuals to obtain business tax licenses, to apply for and obtain U.S. Post Office Boxes and to open business bank accounts. Some of the City-owned lots and properties were already maintained by City employees or neighboring property owners. Some of the City-owned lots and properties were inaccessible and could not be maintained. However, vendors still submitted fraudulent invoices to Leon Blackmon Sr.’s attention for alleged work conducted. In return, he submitted check requests to City officials for payment to vendors via U.S. Mail service.

As a part of the conspiracy, Leon Blackmon Sr., Leon Blackmon Jr. and Karl Blackmon received proceeds from the City checks sent to vendors via U.S. Mail. From 2009 and continuing through 2016, the City paid approximately $1.6 million under the HCD Maintenance Program to participating lawn care companies based on invoices those companies submitted to Leon Blackmon Sr. in his role as the HCD Analyst. At a minimum, approximately 50% of the City-owned lots and properties shown on those billed invoices were fraudulent. When federal agents asked Leon Blackmon Sr. whether he had personal or family relationships with City vendors and received any proceeds from City checks, he denied both.

All defendants are charged with conspiracy to commit mail fraud and multiple individual mail fraud charges. They face individual sentences of up to five years imprisonment for the conspiracy offense and up to twenty years for the mail fraud offense. Additionally, Leon Blackmon Sr. faces up to five years imprisonment for false statements to federal agents.

U.S. Attorney D. Michael Dunavant said, "This long-term fraudulent scheme had significant financial consequences to the public interests of the City of Memphis, and created unfair business advantages for vendors in the HCD Maintenance Program. This office is committed to the protection of the integrity of public services, and schemes to defraud programs or compromise public office will not be tolerated. This indictment demonstrates our commitment to protect taxpayer resources from such disturbing crimes of dishonesty, and to eliminate fraud, waste, and abuse in government programs."

This case was investigated by the United States Postal Inspection Service (USPIS) and the Federal Bureau of Investigation (FBI).

Assistant U.S. Attorneys Damon Keith Griffin and Murre Foster are prosecuting the case on behalf of the government.

The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.

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