Tosa Police Bust Widespread Payroll Fraud Ring; 4 Charged

After an investigation by Wauwatosa police that dates back to January 2010, and a lengthy, secret grand jury proceeding, four people, one a Milwaukee Public Schools employee, have been charged with conspiracy to commit fraud against six metro area temporary employment agencies.

There are more suspects in those and related crimes, already totaling about $250,000 bilked from Manpower and other temp providers through payroll scams, according to police reports and a criminal complaint.

The defendants are accused of having set up several phony businesses in Wauwatosa and defrauding the temp companies through short-term payments to enrolled employees who did no actual work.

Charged with six counts each of felony conspiracy to commit theft by fraud are: Qianna Quartman, 30; her mother, Dianna Spiller, 53; Rufus T. Jackson, 33, father of a child with Quartman; and Lucner J. Freeman, 40, an acquaintance, all of Milwaukee.

For each of them, five of those counts involve fraud in amounts over $10,000, punishable by up to 10 years in prison and $25,000 in fines, the complaint says. One count involves fraud greater than $2,500 but less than $5,000, punishable by up to three years and six months in prison and $10,000 in fines.

Jackson had been released from state prison on parole less than two weeks before starting his “employment” with one of the phony firms, through which he was paid thousands of dollars. He was found at home by his parole officer during more than half a dozen visits when he was also claiming to be at work at two different jobs.

Spiller remained legitimately employed for 30 hours a week by MPS as a paraprofessional educational assistant at Hamilton High School while also collecting, over one five-week period, fraudulent paychecks from more than one agency. The hours she billed them over that time came to between 170 and 178 per week – more than the actual 168 hours in a full, round-the-clock week, even without counting her school hours.

Scheme set for quick, short-term returns, police say

According to police and court documents, Quartman was the ringleader in the scheme. She realized that temporary employment agencies, many of which also provide payroll services, will “float” paychecks to staff of new clients by up to a month before expecting reimbursement.

By pleading some communication problem or a faulty transaction – a wrong address, the wrong credit account, etc. – Quartman got some temp agencies to float her non-existant companies for up to three months.

Quartman would register the companies and set up an office as a front, the complaint says, and then take a large cut of her employees’ salaries.

When an agency would cut her off for non-reimbursement, the court documents say, Quartman, who used a number of aliases to hide her identity, would simply close up shop and start a new shadow company, with the same group of “employees,” and find new temp agencies to target. During part of the scam, she was billing more than one company at the same time for the same employees, several of whom, like Spiller, collected weekly paychecks for hours exceeding the number of hours in a week.

In one case, Quartman defrauded a company of more than $82,000 for regular hours and overtime paid to her staff of do-nothings, the complaint says.

For a time, some of the companies that were hit simply wrote off the losses as bad business. A couple planned civil actions to recoup their funds but had a hard time locating anyone to sue after the perpetrators moved on. Manpower hired a private investigator, who made little progress.

But one company went to the Wauwatosa police.

Defendant tries to keep pay coming with rubber check

The fraud unraveled in the usual way. First, the con artists went too far and wanted too much; and second, somebody inside the organization became dissatisfied, felt unappreciated and, in the end, talked.

On Jan. 4, 2010, the owner of Resource Staffing Associates, 11040 Blue Mound Rd., walked in to the Wauwatosa Police Station to file a complaint. After nearly three months of supporting payroll for extra dispatchers for a trucking company called Q&R Logistics, with an address given as 3333 North Mayfair Rd., his firm had demanded reimbursement and had been given a check for $48,419.

Quartman, the owner said, had come in after the first week’s payout, he said, and complained that she didn’t want checks sent to her employees, but rather that she would pick them up herself.

RSA was then supporting payroll for several temporary employees of Q&R – including Freeman and Spiller – who soon began to rack up unusual amounts of overtime claims, up to and then beyond 70 hours a week.

When weeks and then months passed with no reimbursement and only excuses from Q&R for those claims, RSA said no more paychecks would be issued until it received reimbursement.

That’s when the owner was delivered the check, he said, along with a plea for another week’s payout. He deferred and went to the police. He suspected the check was bad – that there would be insufficient funds to pay it.

Regardless, he was told initially, you have to follow state statutes and deposit the check first – and come back if it bounces.

One 'employee' feels cheated

On Jan. 18, he was back. The check had bounced, he said. And something more. One of the employees of Q&R Logistics had come into the RSA office that day to complain about her pay arrangements.

She told the owner, the complaint says, that she had been on government assistance and had just learned that she had made too much in 2009 from her pay through RSA to continue on the dole.

She said she was a longtime friend of Quartman – at the time going by the name Qianna Spiller – and had been given to understand that she would be paid in cash, with no IRS W2 forms to worry about.

The owner said he explained to the woman how that could not be the case. The checks were issued in her name, with appropriate withholding, and had to be documented with a W2 form.

The woman then related how Quartman had accompanied her to a check cashing business in Milwaukee where Quartman had given her her paycheck for $2,100 to cash. Quartman demanded $1,600 as “her take,” the woman said, and let her keep $500.

When the light dawned on her, as she spoke to the RSA owner, that even though she carried away cash, it was still she who was liable for payroll tax reporting, she told him that she wanted no more part of the operation and would cooperate with police.

Three days later, she called a Wauwatosa detective and, in tears, said she was then enrolled in school as a criminal justice major and did not want to get into trouble. She would talk.

Short-changed agencies come out of the woodwork

From there, Tosa detectives realized there was likely far more to the scam than one victim and one phony company. The Wauwatosa police contacted every temporary agency in the metro area and also every police department, looking for similar circumstances.

Argus Technical Services, 2835 N. Mayfair Rd., had been the first victim, beginning in August 2009. It had paid out $82,629.88 to a company called C&H Transportation, supposedly doing business at 2825 N. Mayfair Rd.

For a time, C&H, which was registered by Quartman, actually employed one part-time employee who showed up for work every day from 8 a.m. to noon. He had an associate’s degree in business management from a private tech school and wanted to do well. He would wait in the office every day, alone, and send messages to Quartman suggesting business leads. She never answered, he said.

The Manpower office at 418 N. Mayfair Rd. was targeted and signed up five employees for Q&R Trucking in January 2010, the complaint says. Quartman billed 60 hours each for the first week for Spiller, Jackson and another woman not charged, and Manpower paid out $3,296.89.

But when Quartman came back the following week with time sheets claiming 70 hours each for those three and two more employees, including Jackson, Manpower demurred. It does not “float” companies for a month, Quartman was told; she would need to reimburse the agency for the first week before being paid further.

Quartman did not pay, and Manpower hired a private investigator to try to track her down and collect. He went to the address listed on the account and found an empty office. He later found Freeman, who claimed he had worked just the one week for Q&R, all of it in training. He said he knew nothing more about the company or Quartman. At the very time, according to findings of a later grand jury, he was submitting time sheets and being paid through RSA and Argus.

The Seek Inc. employment agency, based in Ozaukee County but with an office in Milwaukee, registered five employees to Q&R Trucking in the first two weeks of February 2010 and paid out $11,760 when they all claimed 60 hours a week. Thereafter, Seek began to check credit references and found two were fictitious, and that a claimed Wachovia bank account was non-existent. Seek then terminated payments.

Diversified Personnel Service in Oconomowoc paid out more than $51,000 to six employees of Affordable Professional Cleaning, with an address of 3333 N. Mayfair Rd. Among them were Spiller, Jackson and Freeman. The cleaning company was never even incorporated in Wisconsin, and Diversified was never reimbursed a cent.

Finally, Spherion Personnel Services of Milwaukee paid out more than $30,000 to employees of Platinum Trucking Inc. from late February through late March 2010.

Platinum, it turned out, was registered as a corporation in Wisconsin – under the name of Rufus Jackson’s minor son.

Defendant allowed to hire her own workers

In all cases, Quartman was allowed by the temp agencies to hire her own employees, the complaint shows, rather than those recommended by the agencies themselves. And in almost all cases, those employees drew from a week to several months’ pay, usually with a great deal of overtime, for doing no work at all. Often they drew paychecks from more than one company at once.

In one case, Wauwatosa detectives found that an attorney who had never heard of any of the defendants or any of the companies involved had been fraudulently named as the registered agent for one of Quartman’s phony firms.

The Wauwatosa police investigation brought in the Ozaukee County Sheriff’s Department, the Oconomowoc Police Department, the Milwaukee Police Department and the Wisconsin Department of Justice, Division of Criminal Investigations.

The resulting “John Doe” investigation revealed further details of the Wauwatosa investigation.

There were 13 times when Jackson submitted time sheets to two different employment agencies for work with two different fictitious companies, including six in which he submitted more hours than there are in a week. During that period, Jackson was visited by his parole agent eight times and found at home every time.

Spiller also submitted time sheets to two agencies for two different shadow companies over 13 weeks, totaling more than the hours in a week, while reporting for work at MPS daily during those same hours.

And the woman who first talked – after learning that she was losing all her government assistance while Quartman was taking thee-quarters of her phony paycheck – told the grand jury that she had actually done some work: She had spent several hours, over two, three or four days a week, driving Quartman around town.

Preliminary hearings for all four defendants are scheduled for 8:30 a.m. Dec. 19.