Editor's note: The story has been updated to include a copy of the indictment.
KANKAKEE — Richard G. Simms, the former executive director of the Kankakee River Metropolitan Agency, was indicted by a federal grand jury Tuesday in Springfield, charged with defrauding KRMA and the city of Kankakee’s Environmental Services Agency of more than $2 million.
According to the indictment, the alleged fraud occurred from 2014 through 2018.
The Daily Journal reported in March 2019 that Simms was being investigated by the U.S. Attorney’s office. The paper’s review of Simms’ dealings with KRMA began in November 2018.
KRMA is responsible for treating wastewater from its member municipalities: Kankakee, Bradley, Bourbonnais and Aroma Park. KRMA also treated wastewater from Manteno and Chebanse by intergovernmental agreement.
During this period, Simms was also the superintendent of Environmental Service Utility that serves as Kankakee’s public works and sewer system.
At the same time, Simms, 73, currently of Marietta, Ohio, owned and operated Simms Engineering LTD.
Simms retired from KRMA and Kankakee’s ESA positions in April 2018. He began his career with KRMA when the treatment plant was being built in 1987.
From 2014 through 2018, Simms received more than $2.5 million in salary and legitimate payments: approximately $1,124,288 from KRMA and approximately $1,594,585 from ESU, according to a news release from John C. Milhiser, U.S. District Attorney for the Central District of Illinois.
In addition, and independent of his salary and payments, the indictment alleges that Simms fraudulently received approximately $2.2 million — $768,000 from KRMA and $1,257,000 from ESU — as payment to Simms Engineering for software development by Plum Flower International.
Simms registered Plum Flower International with the State of Illinois in March 2014 purportedly to develop a software application for medical companies to track medical records.
The indictment alleges that although Simms did not have board approval or contracts with his engineering firm to develop software, he submitted fraudulent and inflated invoices to KRMA and ESU for software development. Simms allegedly circumvented KRMA’s invoice payment procedure by submitting invoices directly to its accounting firm. As a result, KRMA’s superintendent and administrative assistant did not approve and were unaware of the invoices.
It further alleges that from May 2014 through September 2018, Simms Engineering transferred more than $2 million to Plum Flower International, which represented more than 95 percent of its revenue during this time frame.
Plum Flower International used approximately $161,000 of the funds to pay another company to create a software application which they attempted to sell on the open market, the indictment alleges. The remaining funds were used for the personal benefit of Simms, according to investigators.
In a November 2018 Daily Journal story, Simms said 87.5 percent to 90 percent of the money for the software application passed through his firm to subcontractors, which he did not identify. He said the application was intended to operate the sewage treatment plant, allowing for reduced staffing.
The Federal Deposit Insurance Corporation Office of Inspector General conducted the investigation. Assistant U.S. Attorney Eugene L. Miller is representing the government in the case prosecution.
The U.S. Clerk of the Court will set the date for Simms to appear in federal court in Urbana for arraignment.
If convicted, the offense of federal program fraud carries a maximum statutory penalty of 10 years in prison.