JACKSONVILLE, Fla. – A man who worked in the mailroom of VyStar Credit Union for more than two decades and pleaded guilty to embezzling $5.4 million in checks intended to pay for postage was expected to be sentenced Thursday.
But the sentencing hearing for Duane Sikes in the Federal Courthouse in Jacksonville took on an entirely different tone as an accuser brought forth damning accusations that Sikes used at least some money he stole from VyStar over a period of 13 years to pay underage boys for sexual favors. Sikes, through his lawyer, denied the accusations and pointed out that Sikes previously had never been convicted of a crime.
Sikes, 65, was arrested in Bradford County in September 2018 and charged with 10 counts of mail fraud and five counts of embezzlement. He eventually pleaded guilty to one count each of mail fraud, embezzlement and income tax fraud.
The new details about how investigators believe Sikes might have used the stolen money were presented to U.S. District Judge Brian Davis during the sentencing hearing Thursday.
Following media reports of Sikes' arrest, First Coast Crime Stoppers received multiple reports accusing Sikes of paying underage boys of middle school and high school ages to take photos of them unclothed, often while swimming in his pool, and paid them to perform sex acts on each other, according a sentencing memorandum filed by the U.S. Attorney's Office.
One of the men accusing Sikes took the stand to testify on Thursday. He said Sikes recruited him in 2008 to clean his pool when he was 13 years old. Sikes was a friend of his mom, who also worked at VyStar.
The now 25-year-old man, who News4Jax is not identifying, said eventually the relationship changed. One day, the man said Thursday, Sikes asked the then 13-year-old to take off his clothes while he took photographs and recorded video. From 2008 until 2017, Sikes gave the young teen thousands of dollars and gifts in exchange for sexual favors, according to the man's testimony. The man said there were at least 10 other boys who had a similar relationship with Sikes. He also accused Sikes of frequently hosting drug and alcohol-fueled pool parties at his house that were attended by young boys.
Similar reports about Sikes were made to the Jacksonville Sheriff's Office between 2010 and 2015, but according to federal court documents, no charges were ever filed.
The man who testified Thursday said he was approached by JSO about Sikes when he was in high school, and he told the investigator that nothing inappropriate ever happen between him and Sikes. He said Thursday he lied to the investigator because he was scared.
Lawyers for Sikes portrayed him as a generous neighbor who took care of his disabled parents. Four friends of Sikes, including a 20-year-old man who said he met Sikes when he was 16 years old and frequently used the pool at his house, came forward and said Sikes was in no way a threat to the community.
Sikes declined to comment to News4Jax as he walked out of the courthouse.
Two more witnesses, who are expected to corroborate the new accusations against Sikes, were scheduled to testify Thursday, but Judge Davis called for recess at 5:30 p.m. Court is scheduled to resume on Monday at 11 a.m. Prosecutors said in court documents that the witnesses will provide a clear picture of Sikes' character and give a possible motive for the crimes.
Due to the witnesses interviews, the U.S. Attorney's Office filed a motion to modify Sikes' conditional release before sentencing to prevent any contact with children as a precaution, which was granted.
Judge Davis said the original charges of embezzlement and fraud carry a maximum sentence of 20 years in prison, but the recommended sentence for Sikes was between 51 and 63 months. Sikes also faces the possibility of a $1 million fine and 2 to 5 years of supervised release.
According to the indictment, between from 2007-2017, some checks Sikes stole outright, and he took others that were made out to the U.S. Postmaster to the main post office downtown and bought rolls of stamps -- $3.6 million worth of stamps -- and sold them to Mystic Stamp Company in New York. Mystic turned around and sold the stamps for 80 percent of their face value.
Mystic's president, Don Sundman, said they were suspicious and notified the U.S. Postal Service.
"We just wanted to make sure that everything was on the up and up," Sundman told News4Jax. "They said, 'We'll check into it,' and they came back to us sometime later and said it's fine."
Sikes worked at the corporate headquarters of VyStar in Jacksonville from 1994 to 2017. His neighbors said he drives a car that's about 20 years old and his house is modest, at about 1,200 square feet.
Sikes also apparently spent money producing. His IMDb.com page credits him with producing dozens of independent films, many shot in Jacksonville, though News4Jax was unable to verify those details.
"He told me he had a trust fund," said Sharon Cobb, a friend who has worked with him on film projects, including a recent release, "Ortega River Rats." "Really, people were amazed how much money he had to spend on filmmaking."
VyStar said Sikes was dismissed in 2017 and released this statement:
"Upon our discovery that a former employee had defrauded the Company during his employment, VyStar immediately conducted a more comprehensive internal review, reported the matter to authorities and is cooperating fully with their investigation. Importantly, this isolated incident did not in any way compromise member personal information or accounts, and is immaterial to the Company's financials. VyStar does not tolerate behavior that is contrary to our culture and high ethical values, and has taken immediate action to address the situation and even further enhance our internal processes."