Gov. Rick Scott on Friday suspended Jacksonville City Council members Katrina Brown and Reginald Brown after they were indicted Thursday by a grand jury.
Scott’s announcement comes after they were indicted on 38 separate counts that include mail and wire fraud and tax evasion.
They also are suspended without pay.
U.S. attorneys for the Middle District of Florida allege Katrina Brown and Reginald Brown, who are not related, used a group of shell corporations to improperly handle nearly $3 million in federal and city-backed loans and grants by submitting fake invoices to their lender for work that never occurred.
The companies were tied to a failed barbecue sauce plant in Northwest Jacksonville co-owned by Katrina Brown.
As governor, Scott has sole authority to temporarily suspend public officials facing criminal indictment. Both can return to their post before their terms end next year at his discretion.
Only the Florida Senate can permanently remove sitting public officials.
Katrina Brown has represented council District 8 since 2015 and Reginald Brown has served District 10 since 2008.
After the May 23 indictment was unsealed Thursday, council President Anna Lopez Brosche removed them from all council assignments, which included seats on the Finance Committee.
Scott did not name possible appointments to fill the roles. That announcement is expected in the next few weeks.
Government prosecutors, both council members and their attorneys appeared Thursday in front of U.S. Magistrate Judge James Klindt at the Bryan Simpson U.S. Courthouse in Downtown Jacksonville.
Katrina Brown and Reginald Brown were released on a $50,000 unsecured bond each and must adhere to travel restrictions.
If convicted on all counts, Katrina Brown could face up to 720 years in federal prison, a $12.25 million fine, a $3,700 special assessment fee and five years of supervised release.
Reginald Brown faces up to 601 years in prison, an $8.275 million fine, a $3,325 special assessment fee and up to five years supervised release for his alleged role in the scheme.
According to prosecutors, Katrina Brown routinely sent false invoices to BizCapital, the custodian of a $2.65 million Small Business Administration loan she obtained for her barbecue sauce plant to justify disbursements and repayments to two companies she operated with Reginald Brown.
When checks from the bank were sent to the companies, which listed Reginald Brown as a principal, he allegedly withdrew thousands of dollars, wrote checks and obtained cashier checks to then give to Katrina Brown.
Reginald Brown also is accused of not filing taxes in 2014, and therefore hiding income from the businesses.
Attorneys for each stated their clients were innocent after the hearing on Thursday.
Their next appearance in federal court will be a status hearing at 10 a.m. June 14, where Katrina Brown and Reginald Brown could be arraigned.
A trial date tentatively is set for Aug. 6.