Former Kearney man Jeffery Sikes sentenced for $819,000 fraud in Nebraska

The News Guy

3 months ago

LINCOLN — A former Kearney resident has been sentenced in federal court in Lincoln for a string of fraud schemes that netted more than $819,000 from multiple victims.

Senior U.S. District Judge John M. Gerrard sentenced Jeffery Sikes, 43, to nine years in prison on wire fraud charges on Tuesday, Aug. 27. He’ll begin the sentence after serving 18 years for his role in setting a series of fires at Walmarts in Alabama.

According to a release from the U.S. Attorney’s Office, starting in early 2012 and continuing through about July 1, 2014, Sikes devised and enacted multiple fraudulent schemes in the District of Nebraska. An indictment charged Sikes with enacting several separate schemes with different victims being preyed upon by Sikes for each individual scheme.

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Jeff Sikes

Per the attorney’s office, the charges included a scheme representing to real estate developers that Sikes had located tenants and demanding a finder’s fee — when in fact no tenants existed. In another scheme, Sikes convinced others to invest their retirement into an alleged new research and development company which did not in reality exist. Each scheme typically included complex fraudulent documents which were used to lull the victims into a sense of security.

In the scheme to which Sikes pleaded guilty, he approached B & J Partnership, also known as Speedway Properties of Lincoln, as a “consultant” for Vanguard Nebraska, a limited liability company. He contacted Speedway about obtaining a lease for commercial space owned by the company in Lincoln. Sikes represented to B & J that Vanguard intended to establish laboratory space in Lincoln for use in research and development.

Sikes proposed that B & J provide $750,000 in financing for the build out of the commercial space owned by B & J. He provided complex falsified documents to convince B & J to enter into the lease and to finance the building including fraudulent balance sheets and IRS tax forms; fraudulent information about purported subcontractors who were allegedly responsible for the construction; and fraudulent bills payable from said subcontractors for work performed or materials related to the construction costs for the property.

But Vanguard was never a real company.

All documents submitted to B &J and others concerning Vanguard and the subcontractors allegedly working on the project were manufactured and fraudulently created by Sikes and others working with Sikes. During the course of this scheme, Sikes directed the disbursement of funds for fraudulent invoices of $507,231.96 causing a loss to B & J.

In addition to the loss to B & J, the other schemes mentioned within the Indictment resulted in the loss of an additional $311,938 to other victims. In total, Sikes is responsible for defrauding multiple companies, organizations, and individuals for $819,169.96.

Sikes pleaded guilty to one count of wire fraud on April 28, 2017.

On January 5, 2018, Sikes did not appear for his sentencing hearing and a warrant was issued for his arrest. It was later determined that Sikes fled Nebraska to Alabama, where he was living in hiding with others and using the alias “Kenneth Allen.”

In February of 2022, Sikes was arrested and charged with conspiracy to maliciously destroy by fire in the District of Alabama—a crime for which he was convicted on May 30, 2023. Pursuant to the documents in that case, while living as a fugitive in Alabama, Sikes led a conspiracy of seven other co-defendants. As part of the conspiracy, Sikes and the others set fires to four different Walmart stores in Alabama and Mississippi. Each of the fires were set during business hours while customers, employees and vendors were inside the stores.

In the lead up to setting these fires, Sikes and his conspirators had meetings and drafted a “Declaration of War and Demands for the People” that made demands and consisted of threats against Walmart if their demands were not met.

Sikes pleaded guilty to the conspiracy charge in the Alabama case. He was sentenced to 18 years in prison, supervised release for three years and to pay restitution in the amount of $7,295,533.23, to be paid jointly and severally with co-defendants from that case.

This case was investigated by the Federal Bureau of Investigation.

“Jeffery S. Sikes’ fraudulent schemes had devastating financial consequences for his Nebraska victims,” FBI Omaha Special Agent in Charge Eugene Kowel said in a release. “His attempt to avoid facing the consequences of his crimes was futile. No matter how long it takes, the FBI is dedicated to working with our federal, state, and local law enforcement partners to bring criminals to justice.”

After Sikes’ sentencing in Alabama, he was returned to the District of Nebraska to face sentencing for his crimes committed as part of this case in the District of Nebraska. The sentence of imprisonment imposed by Gerrard was ordered to be consecutive to Sikes’ term of imprisonment imposed in the Alabama case.

“The United States Attorney’s Office is dedicated to ensuring justice is served for all crimes committed in the District of Nebraska and to holding defendants accountable regardless of the number of years it takes,” U.S. Attorney for the District of Nebraska Susan T. Lehr said in release. “Jeffery Sikes’ serious crimes perpetrated against numerous Nebraska citizens and businesses was not forgotten and today’s sentence is a reflection of the dedication and hard work of all those involved with this case both before and after Sikes fled in 2018.”

After Sikes’ release from prison, he will begin a three-year term of supervised release. There is no parole in the federal system. Sikes was additionally ordered to pay $819,169.96 in restitution to the victims of his fraud crimes in Nebraska.

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