Stephanie Barnes should serve 45 months in prison and pay $180,433 in restitution for defrauding the Virgin Islands government of some $659,000 and filing a false tax return when she was a contractor with the Casino Control Commission, according to the V.I. Justice Department, which cited her continued refusal to admit her guilt in calculating the punishment.
The proposed sentence is more severe than the 33 to 41 months that federal advisory guidelines would suggest for a person with no prior criminal history — and greater than the two years her co-defendant Violet Anne Golden received — the department acknowledged, but said it aligns with punishments for tax offenders in the 50 states and considers mitigating factors in her case.
The argument is laid out in a 19-page sentencing memorandum the Justice Department filed last week in V.I. District Court. It is recommending that she also serve three years of probation after completing her sentence.
Barnes, 64, was found guilty at a jury trial in December 2021 of conspiracy to commit theft from programs receiving federal funds and filing a false tax return. She has steadfastly maintained that she was an unwitting victim of former Casino Control Commission chairwoman Violet Anne Golden’s profligate spending.
Under a plea deal, Golden pleaded guilty to misappropriating $295,503 of government funds in January 2020. She was sentenced in August that year to 24 months and was released in September 2021. She testified at Barnes’ trial on behalf of the prosecution.
Barnes has been held at the Metropolitan Detention Center in Guaynabo, Puerto Rico, since shortly after her conviction on Dec. 23, 2021.
Her sentencing — currently set for Dec. 8, when V.I. District Court Chief Judge Robert Molloy will first consider Barnes’ March 2022 motion for acquittal — has been rescheduled eight times. She has had almost as many lawyers, too, since her arrest along with Golden in 2019.
At a hearing last month, Molloy denied Barnes’ request for a new attorney after she fired her latest court-appointed counsel Miguel Oppenheimer, who filed a motion to withdraw from the case at a hearing in August, citing a breakdown in communication with his client.
Molloy ruled that going forward, Barnes will represent herself. She did not file a sentencing memorandum on her own behalf by the Nov. 21 deadline set by the judge, and in the past has noted the difficulty of communicating from the detention center, and being hampered by a lack of resources and outdated technology when access is available.
According to evidence in the case, Golden hired Barnes in 2015 under a sole source, no-bid contract to work as a consultant, developing programs to help people with gambling addictions, even though the Casino Control Commission had never had such a program or been required to under V.I. law, and even though Barnes had no training in the field.
“The conspiracy encompassed four streams of cash and other lucrative emoluments funneled by Golden to Barnes, at Barnes’ constant urging and prodding,” the Justice Department said. “The first stream included two separate sole source no-bid contracts for Barnes, which netted Barnes over $500,000 over a three-year period. The second was a funding stream to help pay for Barnes’ graduate education. The third was a series of lavish vacations, and the fourth was grab bag of various and sundry benefits, including cash reimbursements for personal expenditures, all going directly into Barnes’ pockets,” it said.
Besides paying $44,523 towards university degrees for Barnes so she would be qualified for the job for which she had already been hired, the spending included everything from work on her personal vehicle and hurricane repairs to her home, to expensive dinners, Broadway tickets to “Hamilton,” trips to Disney World in Florida, and lavish vacations via private jet to events such as the St. Kitts music festival, the department said.
A second contract, for Barnes to train casino employees on problem gambling, was especially lucrative, and was kept secret from the commission, the Justice Department said. It called for her to be paid $250 per employee that she trained, in addition to a $200 to $350 hourly wage and travel expenses for her and her disabled adult son, it said.
“Barnes received $33,500 in 2015; $175,925 in 2016; $172,717 in 2017; and $67,450 in 2018, from the VICCC by submitting invoices for payment claiming she had performed this work,” according to the memorandum, but evidence produced at trial showed that she falsified the employee sign-in sheets for the sessions and overbilled the commission by a total of $29,500 in fiscal 2016 alone.
“However, even if we were to assume that there was no overbilling by Barnes, the evidence at trial established that she was paid exorbitantly by the VICCC for her training services. If one divides the amount of money paid by the VICCC to Barnes, by the number of individual casino employees that she claims to have trained, and further divides that number by the number of hours at each training session (approximately 4 hours each) Barnes was paid $1,375 per hour of training in 2016 and $1,954 per hour of training in 2017,” the memorandum states.
Additionally, “working together with Golden, Barnes engineered the creation of a fictitious 1099-MISC form which vastly understated her income for the 2016 tax year, thereby allowing Barnes to dramatically reduce her income tax liability by over 90% for that tax year,” it said, reducing her earnings from $155,925 to $89,925 so she would owe the Bureau of Internal Revenue $3,201 instead of $33,124. In fact, her own bank records showed Barnes had received $175,925 in earnings from the Casino Control Commission that year, according to the department.
The irregularities in spending and administrative functions were brought to light by an investigation of the V.I. Inspector General’s Office in 2018, which led to an FBI investigation. Barnes and Golden were subsequently arrested in July 2019.
Among the mitigating factors it considered in its sentencing recommendation is the fact that Golden admitted her guilt and testified for the prosecution at Barnes’ trial, the Justice Department said, while Barnes refuses to take responsibility for her “brazen thievery from the public purse.”
“Even after the jury rendered its verdict of guilty beyond a reasonable doubt, Barnes has ostentatiously denied her guilt, expressed no remorse for her conduct, and has shown not a scintilla of self-awareness regarding her disgraceful conduct,” according to the sentencing memorandum.
“To this day, Barnes not only steadfastly refuses to accept any responsibility for her criminality, but she goes a step further by persisting in the outrageous fiction that somehow, she is still owed $75,000 in payments from the VICCC, which is the organizational victim in this case,” it said.
“We respectfully urge this Court not to be swayed by potential arguments from Barnes that she should receive a sentence that is equal to or less than the sentence meted out to Golden,” the memorandum states. “Barnes and Golden are not similarly situated at all, because Golden accepted responsibility for her criminality and pleaded guilty long in advance of any trial.”
“Moreover, because she had already been sentenced, Golden received no benefits in exchange for her truthful testimony at trial. By contrast, Barnes stands before this Court defiantly refusing to accept responsibility for her criminality, and refusing to acknowledge the jury’s verdict of guilt beyond a reasonable doubt,” the Justice Department said.
Additionally, Barnes was raised on St. Croix in a solid middle-class home free of abuse or drug and alcohol addiction, and was afforded a post-secondary education, receiving a bachelor’s degree from Carroll University, it noted.
“Barnes has enjoyed many more advantages in life than most defendants who appear before this Court. As courts around the country have recognized, rather than a basis for leniency, Barnes’ relatively privileged background counsels for a sentence of incarceration,” the department said.
“In such circumstances, a sentence of 45 months for Barnes is sufficient, but not greater than necessary, to reflect the seriousness of the offense, promote respect for the law, and to provide just punishment for Barnes,” it said.
