A jury found former Jacksonville City Council members Katrina Brown and Reginald Brown guilty in their federal corruption trial.
The 12-member jury reached its verdict during the second day of deliberations.
Katrina Brown was found guilty on all 37 counts against her. Reginald Brown, no relation, was found guilty on 33 of the 34 counts against him. The jury ruled him not guilty in aiding and abetting mail fraud.
"Rooting out corrupt public officials who undermine public trust is the FBI's top criminal priority," Rachel L. Rojas, Special Agent in Charge of FBI Jacksonville, said. "This case demonstrates our relentless efforts to ensure that those who are elected to serve their communities do so for the greater good, and not their own personal gain."
(Story continues below.)
Katrina Brown faced 37 counts in the original indictment and her council colleague Reginald Brown faced 34.
The jury verdict is still being read into the record. Stay with First Coast News for more on this developing story.
Below is a breakdown of the charges from the indictment and the potential maximum penalties they carry.
Charges/penalties for Katrina Brown and Reginald Brown:
Count 1 Conspiracy: 20 years/$250,000/three years probation
Counts 2-14 Aiding and abetting mail fraud: 20 years/$250,000 or twice total gain from fraud/three years probation
Counts 15 -27 Aiding and abetting wire fraud: MAX 20 years/$250,000/three years probation
Counts 28-33 Aiding and abetting money laundering: MAX 10 years/$250,000 or twice amount of criminally derived proceeds/three years probation
Charges/penalties for Katrina Brown only:
Counts 34-5 Attempted bank fraud: Up to 30 years/five years probation
Counts 36 -7 Making false statements to financial institutions: Up to 30 years/five years probation
Charges/penalties for Reginald Brown only:
Count 38 Failure to file federal taxes: One year (REGGIE BROWN ONLY)
SUMMARY OF THE CASE
This is what happened between Katrina Brown, Reginald Brown and the government leading to Wednesday's guilty verdicts.
In 2011, two companies associated with Katrina Brown, including one called Basic Products, got a Small Business Administration loan and a city loan, totaling $3.2 million.
The stated purpose of the loans was to finance the purchase of inventory and equipment and a manufacturing facility for KJB Specialties, a barbecue sauce business owned by Katrina Brown's family.
Basic Products was required to submit invoices reflecting expenditures before loan funds would be disbursed.
In mid-to-late 2013, Katrina Brown, with Reginald Brown’s help, developed a fraudulent scheme to get that loan money by faking invoices.
That included creating two shell companies, in which Reginald Brown served as the principal and opened bank accounts.
Katrina Brown invoiced those companies for services never rendered and products never sold, then used those documents to get the loan money.
Basic Products mailed checks to the shell companies, amounting to wire fraud.
Reginald Brown later withdrew funds from the shell companies and gave them to Katrina Brown who deposited them back into Basic Products, leading to the money laundering charges.
By cooperating on these illegal actions, the two Browns were engaged in an illegal conspiracy.
They were indicted May 23, 2018.