Two men plead guilty in prison food case
By JOSEPH B. FRAZIER - Associated Press
Friday, April 6, 2007 11:43 AM PDT
EUGENE — Two executives of a Los Angeles food distribution company pleaded guilty in federal court Thursday to charges of bribery and tax fraud in a case involving a man once praised for cutting the cost of feeding Oregon prisoners.
Michael Levin, 52, and William Lawrence, 48, could receive a total of 13 years each in prison and a total of $500,000 each in fines.
Assistant U.S. Attorney Christopher Cardani said the government would recommend the low end of the sentence range as long as the two met their obligations, and that the defendants would cooperate with the government in prosecuting others involved in the case.
Cardani said a third Californian charged in the case, Howard Roth of Sherman Oaks, would plead guilty on April 17 to charges related to the case.
Prosecutors have said former prison food service administrator Farhad ‘‘Fred’’ Monem, 48, took kickbacks of more than $475,000, but he has not been formally charged.
The Internal Revenue Service has described a scheme in which Monem was paid 20 percent of the profits for buying food the Californians had trouble selling elsewhere.
In court papers, the government and Levin and Lawrence, both from Santa Clarita, agreed that from August 2004 to December 2006, Monem received $532,000 from Michael Levin Trading, also known as L&L Inc., which the two defendants own, and that between July 2004 and January of this year, the company did $4.36 million in business with the Oregon Department of Corrections.
In a search warrant affidavit filed in January, the government said there are indications that Monem and his wife, Karen, 43, also received kickbacks of more than $200,000 from other food companies.
Levin and Lawrence were freed, awaiting sentencing June 27. Both agreed to cooperate with the Internal Revenue Service on their tax bills.
Monem left his native Iran in 1979 to avoid military conscription.
He had won praise for using special procurement rules to buy distressed and bulk foods on the spot market. The savings dropped per-inmate food costs for Oregon’s 13,000 state prisoners to among the nation’s lowest, but he was the target of inmate complaints about green bologna, moldy hamburger and other problems.
However, a statement of facts agreed to by the government and the defendants said there was no evidence to indicate food sold by L&L Inc. to the Oregon Department of Corrections was deficient.
Monem was fired from his $75,500-a-year state job in February.
According to an affidavit by IRS Special Agent Robert Salisbury, informants said L&L paid 20 percent of its profits to Monem for buying food it had trouble selling elsewhere and at higher prices than L&L might have received from other buyers.
The Monems, Lawrence and Roth formed a company, Laromo LLC, through which they bought investment properties in Oregon, according to Salisbury’s investigation. Roth was described in court papers as a sales representative who dealt with Monem.
Roth, Levin and Lawrence were named in a January search warrant affidavit that described the alleged plot and led to the seizure of cash from the Monems’ home, business account and safe deposit box, according to federal court records.
An affidavit alleges that the couple used kickbacks to buy a $77,000 BMW, cover their mortgage and credit card payments, fund a retirement account, pay for a golf club membership and boat storage.
Federal agents reportedly found more than $500,000 in cash at the couple’s home and in their bank safety deposit box.
Cash plus packets of marijuana and hashish were found in a closet in the Monems’ home, the affidavit states.
The affidavit says much of the information came from two L&L employees, whom it did not name, who left to form their own company in May 2006.
It said one of the two departing employees asked Lawrence what it was worth for him to remain quiet and that Lawrence responded: ‘‘Your life.’’
In March, Monem’s lawyer, David Angeli, said the state violated Monem’s constitutional rights by depriving him of due process and firing him based on hearsay confidential-witness information. Angeli called for his client to be reinstated pending the outcome of the investigation.
