Watson’s Sister Gets 5 Years for Role in $9.5-Million Fake-Check Plot

The sister of state Sen. Diane Watson (D-Los Angeles) was sentenced Monday to five years in prison for her role in a scheme to embezzle $9.5 million from the Department of Defense by cashing a fake federal check.

Barbara Coleman, 55, was one of four people convicted in a plan to program a computer at a Southern California defense contracting center to issue a check payable to a company created by Coleman and one of her accomplices.

U.S. District Judge Ronald Lew sentenced two other defendants, Eunice Williams of Memphis, Tenn., and Wallace Medeiros of Bellingham, Wash., to five years each for their role in the check-cashing enterprise.

The fourth defendant, Anderson Belvin, will be sentenced April 11 in federal court in Los Angeles.

Assistant U.S. Atty. William Fahey called Coleman “a long-term con artist who traded on her sister’s name in order to bilk people in the community.”

Prosecutors argued that Coleman became involved in the check-cashing scheme in part to raise money to pay off victims of an alleged real estate loan scheme that she had been involved in for more than four years.

Fahey said Coleman accepted large “advance fees” from loan applicants, often totaling as much as $10,000, but then never provided the loans for which the fees were to have been paid.

“There were eight or 10 of these people who had been defrauded by Coleman and Medeiros over the last four to five years,” Fahey said.

“Oftentimes, when she went in to make a proposal to a prospective individual, she would say that state Sen. Watson was involved in or supporting a particular (real estate) project that Barbara Coleman was advancing. Many people who knew or had heard of Sen. Watson thought that added a certain air of credibility to it, and they were willing to come up with and provide the money to Barbara Coleman as a result,” Fahey said.

In one case, he said, a minister working on a home for disadvantaged children in South-Central Los Angeles paid Coleman a $10,000 advance fee in reliance on Watson’s name but never received any loan proceeds, he said.

Prosecutors said there is no evidence that Watson was involved in any of the loan transactions or was aware of any of her sister’s activities.

In the fake-check case, a jury convicted all four defendants on six counts of conspiracy, computer fraud, mail fraud and theft.

Prosecutors presented evidence that Williams was a computer and customer-relations clerk with the Defense Contract Administration Services Region in El Segundo, a facility that disburses billions of dollars in government contract funds to defense contractors throughout the West.

At Belvin’s suggestion, Williams programmed the government computer to cut a check for $9,469,348 for a company created by Coleman and Medeiros. Coleman then picked up the check and sent it to Bellingham, where Medeiros attempted to cash it the following Monday.

Medeiros was arrested when he came to make a withdrawal from his account two days later.