Gresham Burger King
Gresham, Oregon
CCA
October 22, 2006 News Herald
The 19-year-old woman stripped naked in front of her boss in the manager’s room
at the Winn-Dixie on 23rd Street more than three years ago because a voice on
the phone said so. The teenager posed. She exposed. She did jumping jacks nude.
For nearly two hours, a man who said he was a police officer orchestrated her
humiliation over the phone. The voice told the girl’s boss, assistant manager
James Marvin Pate, that she stole a purse. Police believe the man on the phone
was David R. Stewart, of Fountain, said Sgt. Kevin Miller, of the Panama City
Police Department. Authorities said Stewart, 39, made dozens of calls like this
across the country for several years. The phone hoaxes sparked lawsuits against
restaurant franchisees and chains like McDonald’s, Burger King and Applebee’s.
Stewart’s first trial is scheduled to begin Tuesday in Mount Washington, Ky. In
the Kentucky case, Stewart is accused of calling a McDonald’s on April 9, 2004,
and posing as a police officer. Police said he told McDonald’s assistant manager
Donna Summers a story similar to what the voice told the manager at the Panama
City Winn-Dixie: He said a teenage female employee, Louise Ogborn, had stolen a
purse and that she needed to be strip-searched. Summers and her ex-boyfriend,
Walter Nix Jr., strip-searched Ogborn for about four hours, police said. Nix
also had Ogborn perform sexual acts on him — all at the request of the caller.
Mount Washington authorities charged Stewart with three counts of solicitation
to commit sexual abuse, first degree; solicitation to commit sodomy, first
degree; impersonating a police officer; and solicitation unlawful imprisonment,
second degree. Incidents since the ’90s: Authorities said Stewart has peppered
the country with calls dating back to the mid-1990s, mostly to chain
restaurants. Usually, the man calls, identifies himself as a police officer, and
says a female employee has drugs or has stolen something and must be
strip-searched. In Panama City, the nightmare for a 19-year-old cashier began on
July 12, 2003, at Winn-Dixie, when a fellow employee told her to report to the
manager’s office, according to a PCPD incident report. According to the police
report, which blacked out the name of the victim, what happened next lasted
nearly two hours: Assistant manager Pate, 39, was waiting and handed her the
phone. On the line was a man who said he was Officer Tim Peterson with the
Panama City Police Department. The voice said she stole a purse and gave her two
choices: Either strip naked in front of Pate or be brought down to the jail,
where she’d be strip-searched in front of a lot more people. The voice also said
Pate had the authority to keep her there and strip-search her, while the voice
verified everything over the phone. The cashier agreed. Pate told her what to
take off, and she complied out of fear of being taken to jail. She placed each
item of clothing in a plastic bag. Pate described the cashier’s naked body in
intimate detail to the voice on the phone, according to the police report. The
voice commanded the cashier to pose in various positions that exposed her
breasts, anal and vaginal areas to Pate. Toward the end of the woman’s ordeal,
grocery manager Thomas Moton, 49, entered the office looking for a a key to
unload a truck at the store’s rear dock. When he entered, the cashier was doing
jumping jacks, and Pate had the receiver to his ear. “Pate said the boss is on
the phone,” Moton said. “I thought the store manager was on the phone.” Moton
said he thought something wasn’t right. He wanted to get the other assistant
manager, but Pate said the voice on the phone told him to stay. The cashier went
through several poses, Moton said. “She was bending over, sitting in a chair and
doing jumping jacks,” he said. When the woman finally was allowed to leave, she
put her clothes on and rushed out the door. Moton mentioned to Pate that “if
this ain’t what it’s supposed to be, then you are out of here.” A short time
later, police tore into the parking lot and hauled off Pate in handcuffs. Police
charged Pate with lewd and lascivious behavior and false imprisonment. The
charges eventually were dropped, Miller said. Moton said he never saw the
cashier again after that night. “I didn’t even want to look her in face,” he
said. “It was so embarrassing.” Police track the caller: The caller contacted
several Wendy’s restaurants on Feb. 20, 2004, in the West Bridgewater, Mass.,
area, said Detective Sgt. Victor Flaherty of the West Bridgewater Police
Department. West Bridge water is a suburb of Boston. “We had four incidents in
one night,” Flaherty said. “Some conversations lasted more than an hour and a
half.” Like the others, calls involved strip-searches of female employees,
Flaherty said. By this time, however, the trail was leading back to Stewart,
authorities said. After a story appeared in a restaurant industry magazine about
what happened in West Bridgewater, Flaherty was flooded with calls from police
agencies across the country. Detective Buddy Stump of the Mount Washington
Police Department called Flaherty. Stump was looking for help tracing the call
to the McDonald’s where Ogborn was strip-searched. Flaherty traced the calls
made to West Bridgewater back to the Panama City area. He called the Panama City
Police Department and asked for help, Miller said. Andrea McKenzie, a former
detective with the PCPD and now an investigator with the state attorney’s
office, helped link Stewart to the calls. McKenzie said she fielded calls from
police agencies all over the country. “It was kind of shocking,” she said.
“People said the phone number was coming from the Panama City area.” When the
investigation uncovered that some of the calls were made using a phone card,
authorities got the break they needed. “Nothing in this world is untraceable, if
you put the time into it,” Flaherty said. McKenzie tracked the date and time of
when the phone cards were bought to the Wal-Mart on 23rd Street. She pulled
security video. On the video was a man wearing a uniform from the local jail run
by Corrections Corporation of America, McKenzie said. Stewart was identified as
the jail guard shown on the video, authorities said, and police brought him to
the PCPD to be interrogated by Flaherty, who flew in from Massachusetts. When
police arrested Stewart, they found numerous police magazines and applications
to police departments, Miller said. “This guy wanted to be a cop in the worst
way,” Flaherty said. Stewart’s attorney, Steve Romines, said there is no way his
client could have been the voice on the phone. “To talk someone into this — it
is someone more eloquent than David (Stewart),” Romines said. “He’s not dumb,
but this was very sophisticated.” Flaherty disagreed with Romines’ assessment.
“I’ve been doing this for 20 years, and there is no doubt in my mind” that
Stewart did it, Flaherty said. Authorities eventually extradited Stewart in the
fall 2004 from Bay County to Mount Washington to stand trial. Panama City police
didn’t go after Stewart because they couldn’t link him to the call to the
Winn-Dixie, Miller said. Other states, meanwhile, are awaiting the outcome of
the Kentucky trial before pursuing legal action against Stewart, Flaherty said.
“Oregon is still interested in him,” Flaherty said. “In Massachusetts, I
consider it a rape by him.”February 4, 2006 Oregonian
A former fast-food worker is suing the owners of a Gresham Burger King
franchise because she claims her supervisor ordered her to undress after
accusing her of theft two years ago. The supervisor told police he was following
the instructions of a caller who claimed he was a police officer investigating
theft. In fact, the caller is suspected of pulling a similar scam on dozens of
workers at restaurants and other stores across the country for a decade. Last
year, police arrested David R. Stewart, a former private corrections officer
from Florida. Stewart faces charges in Kentucky, although he is suspected of
making calls around the country, according to an article in the Courier-Journal
in Louisville, Ky. Officer Grant McCormick, spokesman for the Gresham Police
Department, said there was no active investigation since the arrest. The
lawsuit, which was filed Wednesday in Multnomah County Circuit Court, describes
a typical version of the scam: The plaintiff, who was a minor, finished her
shift at the Burger King at 990 N.W. Eastman Parkway about 8:45 p.m. in February
2004. She was with her mother in the parking lot when the manager approached and
told her to return to the restaurant. The manager told the girl's mother to wait
outside. Then he brought the plaintiff into his office where he accused her of
stealing $50 from a customer and said a police officer was on the phone and
needed to speak with her. The plaintiff "spoke with the caller . . . and then
was instructed to hand the phone back to (the manager, who) then instructed (the
plaintiff) to begin disrobing and gave her a bag in which to place her clothing.
The caller instructed (the plaintiff) to remove all her clothing, including her
bra and panties, and she complied while (the manager) stood by. After she was
completely undressed and all her clothes were in the bag, (the manager) again
spoke with the caller and described how (the plaintiff) was sitting and further
advised the caller that her legs were closed. The caller instructed (the
plaintiff) to open her legs so that (the manager) could see between them, but
(the plaintiff) refused to do this," according to the suit. After 45 minutes,
the plaintiff's mother came in and told her daughter to get dressed and leave.
Oregon Department of
Corrections
March 18, 2007 The Oregonian
Federal court statistics show that plaintiffs filed nearly 4,200 cases under
the federal Fair Labor Standards Act, which governs pay practices, in fiscal
2006, which ended Sept. 30. That's up from 4,040 cases in fiscal 2005 and 2,751
in 2003. In Portland this month, Richard Bird filed a class-action lawsuit
against his ex-employer, Aramark Correctional Services Inc. He alleges the
nationwide prison-service provider broke Oregon laws by failing to properly pay
him and co-workers when they worked overtime, took rest periods and put in for
their final paychecks. An Aramark spokeswoman said Friday that the company does
not comment on pending litigation. Those claims surfaced in a state court --
Multnomah County Circuit Court, specifically. And although Oregon doesn't track
civil cases by cause, attorneys say wage-and-hour claims are numerous in state
venues. Why the flood of cases? It's easy for employers to make a mistake and
relatively easy for employees to make them pay for it, said Nancy Cooper, an
attorney with Bullivant Houser Bailey in Portland. Wage-and-hour rules are
complicated and vary across state lines, making national firms such as
Philadelphia-based Aramark vulnerable. Oregon, for instance, requires employers
to provide paid 10-minute breaks, Cooper said. Arizona does not.
February 27, 2007 The Oregonian
Oregon corrections officials on Monday fired Fred Monem, the state prison
food manager who federal investigators claim took nearly $700,000 in bribes from
food vendors. Monem, 48, has been on paid leave since Jan. 10, the day squads of
IRS and FBI agents searched his Salem home and state office in what has the
potential to become the biggest bribery case in Oregon history. Neither Monem
nor his wife, Karen, who was also implicated, have been charged. Max Williams,
state Corrections Department director, confirmed Monem's termination but
wouldn't discuss the basis. "You'll have to draw your own conclusions," Williams
told The Oregonian. The agency didn't announce the action, but a termination
letter obtained by The Oregonian said Monem had engaged in "misconduct,
insubordination, indolence and malfeasance." "Your actions are egregious because
you were in the role to have a relationship with the vendors while being
entrusted to maintain business-related ethical standards," John Koreski, a
Corrections Department assistant director, said in the letter. David Angeli,
Monem's attorney, had no comment. Monem joined the state department in 1996 and
was praised by supervisors in annual reviews for his management of food
purchases. The performance reviews credited Monem with saving the state up to
$10 million a biennium by shopping the "spot" market for discounted goods for
the state's 13,300 inmates. In the spot market, Monem found deeply-discounted
foods being liquidated by name-brand producers at a fraction of the normal
wholesale price. Monem put Oregon in the forefront of the practice among state
prison systems; most states avoid buying in the spot market, according to a
survey by The Oregonian. Federal affidavits unsealed last month in Eugene and
Los Angeles cited witnesses and bank records to assert that Monem had been
taking bribes from vendors since 2003. The vendors initially paid Monem in cash
and often met him in Las Vegas, according to the affidavits. The allegations are
based in part on statements from two former employees of a California company,
identified in the affidavits as a source of $475,000 in bribes. According to the
affidavits, Monem started accepting checks in 2004 because the California vendor
was tiring of rounding up cash for the payoffs. With coaching from the vendors,
Monem's wife, Karen, established a corporation to take in the payments,
according to the affidavits. The vendors continued paying the Monems' expenses
for regular trips to Las Vegas. Agents searching the Monems' home in South Salem
reported finding $75,000 -- nearly all of it in $100 bills -- in a safe in the
garage. They found another $455,000 in cash in the couple's safety deposit box.
The vendors suspected of paying the bribes are Levin and Lawrence Inc., which
operates as Michael Levin Trading in California, and MRB LLC of Maryland.
Principals of both firms are accused in the affidavit of handling the kickbacks.
The companies and their owners have repeatedly declined comment on the
investigation. February 4, 2007 The Oregonian
Fred Monem, the prison food executive suspected of taking bribes, had
virtually unchecked power over how the state spends millions each year to feed
state inmates, according to documents obtained by The Oregonian and interviews
with state officials. The picture of Monem's role is far different from the
portrayal made by Corrections Department officials as the kickback scandal
emerged two weeks ago. Initially, officials said he had little freedom to
operate on his own. Agency officials now concede that Monem was able to decide
on his own what food to buy and when. And although standard procedures required
someone other than Monem to get price comparisons before his deals went through,
for years he did so himself, evading a key safeguard against fraud. Monem, 48,
and his wife, Karen, 43, are accused in federal court papers of accepting
$681,000 in kickbacks from three food companies. Monem has been placed on paid
leave, as has his brother-in-law, William Morgan Jr., who worked under him in
the buying program. Neither the Monems nor Morgan has been charged with a crime.
As investigators from the FBI and the IRS continue to pursue leads in the case,
state documents and interviews help piece together a clearer picture of the
loose oversight under which Monem steered state business to food brokers in
California, Maryland and New York who allegedly paid kickbacks. Corrections
Department officials have praised Monem in public and through job reviews for
his work as their food services administrator, saying he produced millions of
dollars in savings for taxpayers. But according to a federal affidavit, the
vendors secretly paid Monem to buy "distressed" and hard-to-sell products on the
cheap. The Monems and Morgan have declined comment. The Monems' Portland lawyer,
David H. Angeli, has said his clients deserve to be presumed innocent. His job:
Keep costs down: Monem's job was to clamp down on costs for feeding 13,300
inmates in the state system. In part, he did so by taking Oregon into the "spot"
food market, where manufacturers fix bad bets at guessing the public appetite by
selling deeply discounted products that aren't moving in grocery stores or major
restaurant chains. Operating in the fast-moving spot market, where bargains can
appear and disappear in a flash, required flexibility. Rules allowed Monem to
buy goods using purchase orders instead of formal contracts. Goods from the
three vendors suspected in the kickback scheme represented a significant share
of the spot buys ordered by Monem, corrections officials said. Concentrations of
business with a just few suppliers can be legitimate, purchasing and audit
experts told The Oregonian, but they may also signal illegal buying patterns.
The agency recently examined spot buys over five years, identifying just 15
vendors used by the agency. Officials wouldn't release the document and couldn't
say when it had ever done such an analysis before. Don Charlton, Monem's
supervisor, said the concentration didn't alarm him and raised no red flags with
other corrections officials. Prison meals are planned three months at a time,
and Monem organized his food buys by consulting with dietitians, food service
managers and warehouse managers to determine grocery needs, officials said. But
when it came to ordering, Monem alone made the decisions and could spend up to
$200,000 on a single order. "He doesn't have to get anyone's approval," said
John Koreski, Corrections Department assistant director. At the same time, Monem
was expected to discuss significant or unusual buys with his supervisors,
Charlton said. Prowling the market: Agency officials said Monem prowled the spot
market by phone, fax and e-mail. Once he found a product at a good price, other
employees were supposed to verify the quote and seek at least two competing
bids, they said. "The quotes are obtained by a purchasing agent, not by the food
services administrator (Monem), to provide proper separation and controls," the
agency said in a written statement after the kickback allegations surfaced. In
an interview Friday, however, Koreski and Charlton said it hasn't always worked
that way. They said Monem wasn't turning over the comparison work to purchasing
agents working in another unit. Instead, Monem "would go out to the marketplace
and look for competing bids to compare against the price he had just gotten,"
Koreski said. Charlton said that when he took over his current job in early
2006, he realized that better controls were needed in Monem's operation. In
April 2006, he promoted Monem's aide -- Morgan -- to state purchaser, tasked
with getting comparable quotes. "(Morgan) was independent," Charlton said. But
Charlton didn't know at the time that Morgan was Monem's brother- in-law.
Federal agents first alerted corrections officials to the relationship during a
Jan. 10 search of Monem's office. Morgan told prison officials last week that he
had done outside consulting with Monem, advising a vendor who he said didn't do
business with the Corrections Department. Morgan told officials he received a
single payment from Jamm Inc. According to the federal affidavit, that was the
company set up by Karen Monem, who is Morgan's sister. The affidavit said Jamm
Inc. was used as a conduit for at least $475,000 in kickbacks from the vendors.
Morgan, 41, was placed on leave last week after The Oregonian asked questions
about his relationship to Monem and officials found that he hadn't disclosed the
tie when he was hired seven years ago. Before Morgan's promotion, Monem would
pass on his price quotes to a purchasing agent, who would "sometimes"
double-check the quotes or contact a vendor to get another quote, Koreski said.
He couldn't say how often that happened. The agency last week mandated that all
quotes from vendors be obtained in writing. "It's another measure of
protection," Koreski said. Internal review on hold: Corrections officials say
they won't do an internal review of procedures in the prison food buying program
until the criminal investigation is done. Records that would show what Monem
bought, whether he obtained comparison quotes, and who signed off on the
paperwork have been turned over to federal investigators, they said. In 2003,
the Corrections Department hired an internal auditor, but Monem's operation
hasn't been audited. Two years ago, the state Audits Division examined
Corrections Department contracting but found no gaps. Auditors didn't examine
the spot buy program because contracts weren't involved. Auditors did randomly
sample one Monem purchase -- but stopped when they determined it didn't fit the
purpose of their audit. Government auditors and procurement experts say
detecting kickbacks to government workers is difficult. The flow of
under-the-table bribes to the employee doesn't show up in government records.
Charles Hibner, director of the state Audits Division, said the best chance of
catching a kickback situation is for supervisors to be alert to red flags, such
as a flashy lifestyle that doesn't match a public paycheck. Records show that
Monem, who earned $75,000 a year, bought a $77,000 BMW for his wife and invested
in property on the Oregon Coast with executives from one of the food companies.
Federal investigators say he also took dozens of trips to Las Vegas to collect
cash from his vendors. None of that appears to have caught the eyes of his
supervisors. January 23, 2007 The Oregonian
Federal agents found more than $450,000 in cash in the home and safety
deposit box of an Oregon prison official accused of taking bribes from companies
that sell food for inmates' meals and snacks. Farhad "Fred" Monem, who earns
$75,500 a year as the food service administrator for the Oregon Department of
Corrections, was placed on leave after IRS and FBI agents searched his home and
office Jan. 10. A federal judge Friday unsealed court documents that describe a
four-year kickback scheme and detail what agents discovered during their
searches. Monem's lawyer declined to comment Monday. No charges have been filed
against Monem or others allegedly involved. Federal prosecutors declined to
discuss a timeline for arrests in the bribery scheme, which they allege included
Monem's wife, Karen, and officials from food distributors and brokers in
California, New York and Maryland. Monem, 48, was considered a whiz kid at the
prison system, credited with saving the state millions of dollars because of his
shrewd working of the commodities market. Prison officials praised Monem for
reducing the daily cost of prison food from $2.88 to $2.30, third lowest in the
nation. One food broker praised Monem's business savvy in a March 2002 profile
in The Oregonian. "He'll let you earn a living, but you're not going to get rich
off him," said Doug Levene of 21st Century Supply. Levene, who could not be
reached for comment Monday, is one of several food industry officials accused in
federal court records of taking part in a bribery scheme that included splashy
Las Vegas casino meetings, a junket to a football game in Chicago between the
Bears and the Green Bay Packers and the creation of a shell company allegedly
controlled by Karen Monem. Court records single out Levin & Lawrence, Inc., a
wholesale food distributor based in Santa Clarita, Calif. The company buys bulk
food, some of it labeled "distressed" because it was close to the expiration
date, marks it up and resells it for a profit. In his position, Monem bought
bulk food for inmate meals and the prison commissary. His job was to get the
cheapest price possible. But by early 2003, according to court records, Monem
was agreeing to buy large quantities of bulk food from Levin & Lawrence in
exchange for 20 percent of the company's net profits on sales to the Oregon
prison system, according to an affidavit filed by IRS Special Agent Robert
Salisbury. A unnamed informant told federal investigators that if they ever had
product that was difficult to sell, "they would make Fred buy it," according to
the affidavit. Michael Levin, a company official accused of participating in the
bribery scheme, declined to comment Monday. The affidavit said Monem met
repeatedly with company officials in Las Vegas where at least initially he
received cash payments. In one meeting last year, Salisbury said he observed
Monem and Levin & Lawrence officials arrive at the Mandalay Bay Resort and
Casino by limo and check in at the VIP services desk. Over time, Levin &
Lawrence officials urged Monem to create a shell company. Monem set up Jamm
Inc., which was controlled by his wife, according to the affidavit. Karen Monem
would send invoices to Levin & Lawrence for consulting work. Court records
allege the Monems received more than $475,000 in bribes from Levin & Lawrence
and an additional $200,000 from other food companies. Court records indicate
that the Monems invested some of the money, teaming up with Levin & Lawrence
officials to buy a rental property in Seal Rock. But records also note that Fred
Monem bought a $77,000 BMW. Salisbury said in his affidavit that he saw Monem
drive the car to his office earlier this month. During the search of the Monems'
Salem home, agents found a diamond ring worth nearly $9,500. They say they also
found baggies of marijuana and hashish. Gov. Ted Kulongoski's spokeswoman, Anna
Richter Taylor, directed questions to the Oregon Department of Corrections. "We
don't comment on pending investigations," she said. Corrections officials
expressed dismay. "We are, of course, disappointed that allegations have
surfaced regarding a department employee. We hold ourselves -- and all employees
-- to the highest ethical standards, and we take very seriously any suggestion
that those standards have been violated," Max Williams, director of the
Corrections Department, said in a statement. "The Department of Corrections will
fully cooperate in every way to ensure that justice is served." Court records
say potential criminal charges include mail fraud, wire fraud, bribery,
conspiracy, money laundering and filing a false federal income tax return. Court
records indicate that two former Levin & Lawrence employees, who left the
company to start their own competing food business last spring, told federal
officials about the bribery scheme. One of the unnamed informants said a company
official threatened him if he talked. In the 2002 profile in The Oregonian,
Monem boasted of his ability to buy goods at the lowest prices. While leading a
tour through the prison system's food warehouse, he noted that he purchased a
large block of Mrs. Fields oatmeal raisin-and-nut cookies -- normally $1.98 --
for 36 cents a pack. He also criticized government workers who feel a sense of
entitlement. "People work for so many years and feel the taxpayer owes them," he
said. "But to me, nobody deserves anything."
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