United States Attorney's Office
District of Nebraska

January 11, 2007

 United States Attorney Joe W. Stecher and the Federal Bureau of Investigation announce the following information for the attention of the media:

Event Triggering this Release:

Former CIETC Executives Charged With Fraud Former IWD Deputy Director And Former City Council Member Also Indicted

DES MOINES - On January 11, 2007, a federal grand jury in Des Moines returned a twenty-seven-count Indictment against Ramona Cunningham, 52, of Farmerville, Louisiana, Jane Barto, 52, of Carroll, Karen Tesdell, 67, of Manson, and Joseph Archibald "Archie" Brooks, Jr., 57, of Des Moines, accusing them of various criminal charges stemming from their employment or involvement with the Central Iowa Employment and Training Consortium (CIETC), announced United States Attorney Matthew G. Whitaker. Summons have been issued for their appearance in federal court for arraignment on January 25, 2007.

A fifth defendant, John Bargman III, 58, of Granger, appeared before Senior United States District Court Judge Ronald E. Longstaff on January 16, 2007, entered a plea of guilty to a U.S. Attorney's Information charging him with conspiracy and fraud/misapplication of federal funds. In a plea agreement reached with the government, Bargman agreed that the appropriate sentencing range would be 37 to 46 months in prison and a restitution amount not to exceed $400,000. The government agreed to ask the sentencing judge to reduce that sentence if Bargman cooperates with the government. A sentencing hearing will be scheduled at a later date.

CIETC was a governmental agency funded through federal, state and local grants to provide workplace training and other workforce investment activities. Cunningham was Chief Executive Officer; Bargman was Chief Operating Officer; Tesdell was Chief Accountant; Barto was Deputy Director of Iowa Workplace Development; and Brooks was a Des Moines City Councilman and Chairman of the Board of Directors for CIETC.

All four indicted defendants are charged with conspiring to defraud/misapply federal funds (Workforce Investment Act funds and other program funds) and obstructing government functions through deceit, trickery, and dishonest means. The fraud charges involve fraud or misapplication of federal funds under the Workforce Investment Act (WIA) (Counts 2-10), the Temporary Assistance for Needy Families program (Counts 11-20), the New Economic Opportunity Funds program (Counts 21-23), and WIA funds and Promise Jobs program funds (Counts 24-26). The last count of the indictment charges Barto and Cunningham of obstructing and impeding an investigation or inquiry by attempting to influence Iowa Workforce Development and the U.S. Department of Labor to discontinue the investigation into the compensation paid to the CIETC executive staff.

The following is a synopsis of the charges on the defendants:

Defendant Charges Maximum Penalties (per count)
Ramona Cunningham Conspiracy (1 count) 5 years and/or $250,000 fine
Fraud/Misapplication of Fed. Workforce Investment Funds (9 counts) 2 years and/or $250,000 fine
Fraud /Misapplication of Federal Program Funds (16 counts) 10 years and/or $250,000 fine
Obstruction of an investigation (1 count) 1 years and/or $100,000 fine
Jane Barto Conspiracy (1 count) 5 years and/or $250,000 fine
Obstruction of an investigation (1 count) 1 years and/or $100,000 fine
Karen Tesdell Conspiracy (1 count) 5 years and/or $250,000 fine
Fraud/Misapplication of Fed. Workforce Investment Funds (9 counts) 2 years and/or $250,000 fine
Fraud /Misapplication of Federal Program Funds (16 counts) 10 years and/or $250,000 fine
Archie Brooks Conspiracy (1 counts) 5 years and/or $250,000 fine
Fraud/Misapplication of Fed. Workforce Investment Funds (9 counts) 2 years and/or $250,000 fine
Fraud /Misapplication of Federal Program Funds (9 counts) 10 years and/or $250,000 fine

This case was investigated by the Federal Bureau of Investigation, the Iowa State Auditor's Office, the Iowa Department of Public Safety, Division of Criminal Investigation, the Office of Inspector General for the Department of Labor, and the Office of Inspector General for the Department of Health and Human Services. The United States Attorney's Office was also assisted by the Polk County Attorney's Office.

As with any case, an indictment is merely an accusation and the defendants are presumed innocent until proven guilty.

Individuals at news conference:

Matthew G. Whitaker, U.S. Attorney, Southern District of Iowa
David Vaudt, Iowa State Auditor
Jack Boyle, Assistant Special Agent in Charge (ASAC), Federal Bureau of Investigation
James Vandenberg, SAC, Office of Inspector General for the Department of Labor
Kory Ihnken, Special Agent, Office of Inspector General, Dept. of Health and Human Services
John Quinn, Assistant Director, Division of Criminal Investigation

Additional quotes:

United States Attorney Matt Whitaker stated, " These individuals are charged with serious crimes. Along with our investigative partners, we investigate allegations of public corruption throughly and will continue to ensure that taxpayer money is handled appropriately. I commend all the government agencies that are working on this investigation. State Auditor Vaudt, his staff, and the FBI especially should be commended. Their commitment was truly extraordinary on this CIETC matter."

Gordon S. Heddell, Inspector General, United States Department of Labor, stated: "The Workforce Investment Act Program creates opportunities that help economically disadvantaged, under-employed, and unemployed individuals enhance their potential for long-term employment. Today's plea by CIETC's former Chief Operating Officer sends a strong message that we will aggressively identify and pursue individuals who misuse Federal funds for personal gain. We will continue to work with our law enforcement partners in the prosecution of the remaining individuals who allegedly mismanaged program funds that could have been used to provide vocational training to economically disadvantaged program participants."