Saturday, July 4, 2009

Man pleads guilty in frozen chicken scam

Associated Press Writer
NEW ORLEANS -- A man who was deported by Canada last year pleaded guilty Wednesday to charges he duped the Egyptian government into paying more than $7 million for a shipment of frozen chicken he never intended to deliver.
Alexander Legault, 59, had moved from Louisiana to Canada before a grand jury in New Orleans indicted him on fraud charges in 1986. Legault, who also has been charged with participating in scams in Texas and Florida, was ordered deported by Canada in 2002 but remained a fugitive until his arrest last year.
In a court filing Wednesday, prosecutors said Legault and a co-conspirator, Alphonse Joseph Demots Jr., started an international food commodities business in south Florida in 1980. They moved to the New Orleans area after a deal to sell Mazola corn oil to a company in the Middle East fell apart, with the two accused of selling a cheaper product with fake Mazola labels.
In 1981, prosecutors said, Legault and Demots were using aliases and operating their business out of an apartment in suburban New Orleans when the Egyptian government agreed to buy 5,000 metric tons of frozen chicken from them.
After a bank wired more than $7 million to Legault's corporate account, he created fake documents to make it appear that the chicken was aboard a Swedish vessel bound for Egypt and transferred $1.5 million of the money to a Grand Cayman Islands bank account, prosecutors said.
Legault and Demots used some of the $7 million to buy 3,200 metric tons of chicken from a poultry farm in Mississippi to make it appear that they were honoring their contract, but Egypt refused to accept the partial shipment because it was late and wasn't what they promised to deliver, according to prosecutors.
"During this same period, Legault and Demots were involved in other fraudulent international-food commodity-contract schemes with Middle Eastern countries and/or companies," prosecutors wrote. "Once Legault and Demots had secured the proceeds from these commodity sales, both defendants left the New Orleans metropolitan area."
Legault moved to Montreal with his Canadian wife and successfully opposed extradition by the U.S. until Canada ordered him deported in 2002. He had a false identification under the name Carl Lavigne in his possession when he was arrested last year, prosecutors said.
A spokeswoman for U.S. Attorney Jim Letten in New Orleans said Demots pleaded guilty in 1983 to a related federal conspiracy charge in Detroit.
Legault, who is scheduled to be sentenced on Oct. 7, pleaded guilty Wednesday to charges that include conspiracy to commit wire and mail fraud and carry a maximum of 10 years in prison.
However, his plea agreement calls for him to serve a maximum of seven years in prison and pay a fine of up to $15,000. He can withdraw his guilty pleas if U.S. District Judge Kurt Engelhardt refuses to sign off on the deal. Engelhardt said he will review a report prepared by the probation department before he passes judgment on the plea deal.
The plea deal also calls for federal prosecutors in Houston to drop 26-year-old charges against Legault "related to a similar scheme," Assistant U.S. Attorney Harry McSherry said.
But the agreement doesn't resolve a case against him in Florida, where he awaits a trial on charges he conspired to swindle about 300 elderly investors out of millions of dollars.
While living in Canada, Legault was one of seven people charged in 1997 in Volusia County, Fla., with racketeering. Between 1993 and 1996, Legault and others allegedly conspired to lure victims into investing about $11 million in unregistered securities.
Legault's lawyer, Robert Glass, declined to comment following Wednesday's hearing.

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