Former Clarke University bookstore director convicted in fraud scheme

CEDAR RAPIDS - A former Clarke University bookstore director pleaded guilty Thursday in federal court for stealing over $300,000 from the university in a book vendor scheme from 2011 to 2012.

James Spaulding, 35, now of Longmont, Colo., former director of the Bookstore on the Dubuque campus, pleaded guilty to one count of mail fraud and two counts of filing false tax returns in U.S. District Court.

According to the plea agreement Spaulding was responsible for ordering text books and other books for the student bookstore, and he would submit invoices to the university's accounting department for payment to the book supplier.

Spaulding and T.D., a friend, created a fictitious corporation called RVP Wholesale Books Inc. L.L.C., of New Hampshire on July 28, 2011. Spaulding would send fraudulent RVP invoices for books to Clarke University, totaling $302,176, which were paid to RVP, according to the criminal information.

Spaulding admitted a checking and savings account was opened Aug. 11, 2011 by T.D. at Digital Federal Credit Union in Manchester, N.H., in the name of RVP, which T.D. controlled. T.D. listed his apartment as the corporate office for RVP, but Spaulding was listed as a signatory on the account, with his mother's address in New Hampshire as his residence.

The account was opened with a $20 deposit, according to the information.

T.D. would deposit the Clarke money into the accounts and then send Spaulding his share in a cashier's check. Spaulding then deposited his cut into his personal bank account at Dubuque Bank and Trust.

Included in the plea agreement are several fraudulent invoices or transactions created by Spaulding for various amounts in 2011 and 2012. One invoice, dated Sept. 2, 2011, is for over $47,000, and another invoice from Dec. 21, 2012 is for over $53,000.

Spaulding also admitted to falsifying his tax return for 2011 and 2012, according to a plea agreement. Spaulding failed to include the income he received from the RVP scheme. In one transaction, he received $104,165 in 2011 and in another he received $46,664 in 2012, which he didn't report.

According to the plea, Spaulding also lied to the grand jury when he testified in this case May 20. He claimed records showing the purchase of books by RVP existed but had been destroyed or lost. At the time, Spaulding knew the statements made under oath were untrue and he made the false statements in an effort to obstruct the investigation.

Spaulding faces up to 26 years in federal prison and a fine up to $200,000, plus an additional fine of up to $250,000 or an additional fine not more than the greater of twice the gross gain or twice the gross loss resulting from the offense. He also faces up to five years supervised release after serving his prison time.