Last updated on June 27th, 2019 at 12:38 pm
Note: This story has been updated to identify Superior Support Resources Inc. after the company issued a statement about the search warrant documents.
Milwaukee County Register of Deeds John La Fave allegedly used fake invoices from Brookfield IT services firm Superior Support Resources Inc. to create a pot of money to pay vendors outside the county’s budget and payment processes, according to a search warrant application filed in the U.S. District Court for Eastern Wisconsin.
Auditors for the county determined the company submitted and was paid for more than $2.3 million in fake invoices from 2010 through 2017, according to the search warrant affidavit.
Federal investigators seized records, computer files and paperwork from the business’ offices in early February. The Milwaukee Journal Sentinel previously reported that federal investigators searched La Fave’s Milwaukee County offices on the same day.
BizTimes initially did not identify the business because no charges have been filed against it or its employees in connection with the alleged scheme. The company issued a statement after other publications reported on the search warrant.
Sarit Singhal, president and CEO of Superior Support Resoruces, said the company has done work for the Register of Deeds office for many years.
“We are cooperating fully with the authorities and plan to continue that cooperation,” Singhal said. “We are confident we have not done anything improper, and we are performing an internal investigation to verify as such. At this point, we have not seen anything that is of concern.”
La Fave is named in the search warrant but also has not been charged. He announced on April 9 he would retire on April 12. BizTimes is identifying him given his previous position in elected office and the FBI’s confirmation of an investigation to the Journal Sentinel.
The search warrant records were originally sealed for 45 days at the request of investigators who contended disclosing it would alert people who had not been interviewed in the case.
La Fave’s attorney, Michael Maistelman, said in an email “the Wisconsin Supreme Court rules preclude us from commenting on an ongoing matter.”
According to the search warrant application, La Fave would regularly direct the SSR’s director of finance to send the county invoices for redacting and indexing records, even though the company had not performed the work. When the county paid the invoices, the company would allegedly hold the money “on account” for La Fave to use to pay other third-party vendors that actually performed the work. Register of Deeds employees also allegedly performed some of the services the Brookfield firm was paid for.
Invoices from third-party vendors would allegedly be repackaged into invoices from the SSR with a 5% “project technician charge” added as compensation for its role in the scheme, the affidavit says.
During the investigation, Milwaukee County auditors uncovered a number of emails between La Fave and the company’s director of finance.
In an October 2014 email, the director noted SSR was already holding around $700,000 and questioned how the funds would be used up.
La Fave responded by saying it was “an extremely important question” that he had given some thought to. He said the indexing and redaction work would account for most of the money but it could also be spent on other annual invoices instead of going through the county budget.
“Otherwise we could use it for future projects that we come up with that could be billed via SSR,” La Fave wrote in an email included in the search warrant. “For example, I have some future scanning of books that I plan to do through (another service provider).”
In a December 2014 email, La Fave said he planned to ask the SSR to send one more invoice to “pre-pay.”
“… please invoice Milwaukee County right away. This is to spend funds we have remaining in a dozen accounts. Use it or lose it. Holding it with you all is a nice way to deal with it,” La Fave wrote.
The next day La Fave sent an email at 2:11 p.m. asking for an invoice for $83,160.34 in redaction and invoicing services. The director responded with an invoice 16 minutes later, according to the court documents.