Wife of Former Oregon Department of Corrections Food Service Administrator Pleads Guilty to Laundering Proceeds of Bribery Scheme

Case Relates to Prison Food Buying Program

Eugene, Ore. - Karen Monem, 45, Salem, Oregon, pleaded guilty today before United States District Judge Ann Aiken in Eugene, Oregon to one count of money laundering, relating to a bribery scheme spearheaded by her husband Fred Monem.

Fred Monem was the Food Services Administrator for the Oregon Department of Corrections (ODOC).  In October 2007, Fred Monem and his wife Karen Monem were indicted in a bribery scheme.  The indictment alleged that from 2000 through 2007 Fred Monem used his position with ODOC to solicit and receive $1.3 million in kickback payments from vendors selling food products to ODOC, and that Karen Monem assisted him by laundering the proceeds of the illegal activity.

As part of a plea agreement reached with the United States Attorneys Office, Karen Monem acknowledged that, at the request of Fred Monem, she opened bank accounts in the name of her mother at three separate banks.  From 2001 through 2006, she deposited more than $160,000 in cash generated from the bribery scheme into these accounts.  In June 2005 Karen Monem utilized some of the proceeds of the kickback scheme deposited into these bank accounts by purchasing a residence at Seal Rock, on the Oregon Coast.

Judge Ann Aiken accepted Monem’s guilty plea and scheduled sentencing for January 29, 2009 at 10:00 a.m.   Monem faces up to ten years in prison and a $250,000 fine for the money laundering conviction.  In addition to the criminal charge, Karen Monem has also forfeited to the federal government several assets related to Fred Monem’s kickback scheme, including more than $700,000 in cash, a $50,000 certificate of deposit, a 2006 BMW automobile, a 2007 GMC Denali, and a 2006 Silverado pickup truck. 

The Oregon Department of Justice, in coordination with the federal government, forfeited additional assets owned by the Monems, including real estate purchased by the Monems with the proceeds of the kickback scheme.

In 2007, four individuals plead guilty to bribery and tax fraud relating to this same kickback scheme.  Each admitted they paid Fred Monem a series of kickbacks in return for Monem’s agreement on behalf of ODOC to buy food products through their companies.  They are scheduled to be sentenced in January 2009.

The only remaining defendant in the bribery scheme is Fred Monem.  Monem’s employment was terminated by the State of Oregon and he fled the United States in July 2007.  There is a warrant pending for his arrest.  Fred Monem is believed to be currently living as an international fugitive in Iran, where he was born.

The bribery scheme was successfully investigated by the Internal Revenue Service - Criminal Investigation, and the Federal Bureau of Investigation, with the assistance of the Oregon Department of Corrections.

For further information, contact Gerri Badden at 503-727-1033.

 

 

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