A Salisbury business owner will spend five months in federal prison following a guilty plea in a four-year embezzlement scheme to get thousands of dollars from Shaw Air Force Base through construction contracts.

Steven Crandall Sr., 59, is co-owner of Southern Images Lawn Services Inc. in Salisbury.

Federal prosecutors say Crandall and James Autry “Audi” Clemens, 60, of Johnston, SC, and Larry Baker, 64, of Cameron, SC, submitted fake payroll statements to the Air Force base for construction work that was never done.

Crandall will serve five months; upon his release from prison, he will be on supervised probation for three years. He’ll also have to pay back $97,169.34 in monthly $500 installments. Crandall has no other criminal record.

In fact, court records say he’s a father of three adult children and regularly donates his landscaping services to area organizations, churches and nonprofits. Court documents also include character letters from customers, friends and family, who all mostly said Crandall was an “honest businessman.”

Crandall and Clemens were childhood friends. When a business partner died, Clemens called upon his longtime friend, Crandall, to take over the construction projects.

Court documents say Clemens created business fronts and used those business fronts to launder money from the U.S. government from construction contracts on Shaw Air Force Base from 2003 to 2010. Clemens used his position as Sanders Engineering project superintendent for Saber contracts at the Air Force base to steal government funds.

Specifically, Clemens contracted work for the government contracts to companies owned and operated by friends of both him and his wife, including Baker. Authorities say some of the companies were legitimate, while others were shell companies he created in order to launder money.

Clemens created fake invoices, directly or indirectly inflated the government project estimates and created false payroll documents in order to generate extra revenue to pay shell companies not performing work under the contract.

Crandall took over a contract project in September 2009, initially unaware of the fraud his friend had been committing for seven years. Crandall was not able to do work on the projects, which were eventually shut down, court records say.

In court documents, Crandall acknowledged his guilt and says, based on his friend’s advice, he allowed fake payroll records to be submitted to the government for work he had not yet done.

Crandall is expected to turn himself in to authorities after Jan. 15. He was issued a $25,000 unsecured bond.

Baker will serve 15 months in prison, then supervised probation for three years. He was also ordered to pay restitution in monthly $500 installments. Baker will have to pay back $532,932.

Clemens will serve four years in prison, as well as three years of supervised probation. He was ordered to pay $792,651.86 in $500 monthly installments.

Both families of Clemens and Baker lived lavish lifestyles, court documents said, while Crandall and his family lived a simple lifestyle.

According to the U.S. Attorney’s Office in South Carolina, Crandall and Baker could have received the maximum 10 years and a $250,000 fine. The maximum penalty Clemens could have received is 20 years and a $500,000 fine.

“Mr. Clemens’ guilty plea is significant in sending a message that while fraud involving government contracts may be initially lucrative, nothing lasts forever and the consequences are serious. We and our law enforcement partners will work continuously to uncover this type of criminal activity,” said Thomas J. Holloman III, Special Agent in Charge, IRS Criminal Investigation.

The case was also investigated by agents of the United States Air Force and was prosecuted by Assistant United States Attorney T. DeWayne Pearson of the Columbia, South Carolina office.

Contact reporter Shavonne Walker at 704-797-4253.