Humans are rarely as creative as when they are committing fraud. I never thought I’d be talking about chicken frames when I started this series, but here we are.
William Hickman and Brian Whiteman worked for Raeford Farms in Louisiana as the sales manager and assistant sales manager respectively. As reported in Meat+Poultry of all places, the two were convicted of concocting a scheme to extract money from Raeford Farms by inserting fake intermediaries into the sales process.
Essentially they created a wholesaler that would purchase chicken frames from Raeford and sell them to places like Heritage Food at a markup. The intermediary provided no value and never took delivery of the product. Hickman would sell the frames to a company he controlled at rock-bottom prices then turn around and sell them to Heritage Farms and pocket the markup.
This is a variation on a kickback. Hickman and Whiteman were operating in bad faith. Rather than selling to the customer and letting the company make the profit, they were siphoning off profit for themselves.
Whiteman helped conceal the fraud. He had control of inventory and shipping making him a good choice as an accomplice.
The two were convicted of fraud totaling more than $2 million. Interestingly, each of them faces restitution of more than $2 million along with jail time. Hickman got 52 months and $2.6 million in restitution. Whiteman was sentenced to 20 months and $2 million in restitution.
For the record, I avoided any puns about the two getting cocky during their scheme. You’re welcome.