Examples of Public Corruption Investigations - Fiscal Year 2013
The following examples of public corruption investigations are written from public record documents on file in the court records in the judicial district in which the cases were prosecuted.
Florida Contractors Sentenced for Paying Bribes
On April 23, 2013, in Miami, Fla., Anthoneel Allen, of Wellington, Fla., and James Hashim, of Plantation, Fla., were sentenced for conspiracy to commit bribery, mail fraud, extortion and tax fraud. Allen was sentenced to 60 months in prison, three years of supervised release, a $15,000 fine and forfeiture of $3 million. Hashim was sentenced to 36 months in prison, three years of supervised release, a $15,000 fine and forfeiture of $3 million. According to court documents, beginning in the fall of 2006 through 2010, Hashim and Allen were part of a scheme that paid bribes to secure approximately $26 million in contracts from Broward County. They obtained approximately $6.5 million in benefits. Allen and Hashim paid more than $150,000 in cash, provided a car and a job in exchange for help securing multi-million dollar contracts from the Broward County Traffic Engineering Division. Projects included the Signalization and Street Light Installation contract, a contract to make installations and do repair work of the streetlights and traffic equipment in Broward County. The Advanced Transportation Management System, a federally-funded project, which required the contractor to install an integrated traffic control system which entailed laying hundreds of thousands of feet of underground cable and conduit in order to synchronize traffic flow within Broward County. The Video Detection Contract, which required the contractor to install video detection cameras in various intersections in Broward County in order to improve traffic flow.
Former New Jersey School Administrator Sentenced for Bribery Scheme
On December 10, 2012, in Trenton, N.J., Frank D’Alonzo, the former supervisor of Athletics and Special Projects for the Toms River, N.J., Regional School District, was sentenced to 37 months in prison, three years of supervised release. D’Alonzo pleaded guilty to one count of bribery and one count of tax evasion. According to court documents and statements made in court, D’Alonzo admitted to participating in a scheme in which he received corrupt payments from Francis X. Gartland, an insurance broker who specialized in providing insurance brokerage services for public entities, including the Toms River Regional School District. As early as 2001 through June 2006, D’Alonzo took hundreds of thousands of dollars in corrupt payments from Gartland and others and then passed on a portion of these proceeds as bribes to Michael J. Ritacco, who was then superintendent of the school district, in exchange for Ritacco’s official assistance in maintaining insurance and other business with the school district. Ritacco and Gartland were each sentenced recently to 135 months in prison. D’Alonzo also admitted that for the 2005 tax year, he evaded the assessment of hundreds of thousands of dollars of federal income tax by concealing the illegal proceeds that he received from the bribery scheme.
Former Head of Dallas Crime Stoppers Sentenced on Conspiracy and Tax Convictions
On December 3, 2012, in Dallas, Texas, Theadora Ross, a former senior corporal with the Dallas Police Department, was sentenced to 46 months in prison and ordered to pay $274,304 in restitution. Ross pleaded guilty in August 2012 to one count of conspiracy to commit wire fraud and one count of willfully attempting to evade assessment of income taxes. According to court documents, Ross worked at the Dallas Crime Stoppers office from 2003 to May 2010, and was the head of that office from March 2006 to May 2010. The Dallas Crime Stoppers office is funded by the North Texas Crime Commission (NTCC). From February 2005 through May 2010, Ross and co-defendant Malva R. Delley conspired to defraud the NTCC. Ross determined which tips would be listed and presented for cash reward approval. These lists contained both bogus tips that Ross created and legitimate cash reward tip numbers. Ross provided the bogus tip information to Delley, who then presented that information to the bank and collected cash rewards. Delley divided the cash with Ross. Ross admitted that for calendar years 2006, 2007, 2008 and 2009, she filed false federal income tax returns by omitting nearly $175,000 in proceeds of her illegal scheme. Delley pleaded guilty in May 2011 and is awaiting sentencing.
Former Pennsylvania State Senator Sentenced on Mail Fraud and Tax Charges
On November 30, 2012, in Scranton, Pa., Robert Mellow, former Pennsylvania State Senator, was sentenced to 16 months in prison, three years of supervised release and ordered to pay $79,806 in restitution. Mellow previously paid over $31,000 in restitution for federal tax charges. Mellow pleaded guilty in May 2012 to conspiracy to commit mail fraud and to defraud the United States. According to court documents, Mellow, in his capacity as a state Senator and the Democratic Leader during 2006 through 2010, conspired with others to misuse the staff and resources of the Pennsylvania Senate for political fund-raising and campaign purposes. As part of the scheme, Mellow caused and knowingly permitted the submission to the Chief Clerk of the Senate of false job classification and re-classification forms and memos for Senate staff who performed political fund-raising and campaign work while being compensated by the Senate. Mellow also conspired with others to file a false individual federal income tax return for the year 2008. The unreported income consisted of money paid to Mellow in connection with the sale of property where Mellow’s district office was located.
Maryland County Developer Sentenced for Extortion and Tax Evasion
On November 16, 2012, in Greenbelt, Md., Patrick Q. Ricker, of Bowie, Maryland, was sentenced to 12 months and one day in prison, three years of supervised release and ordered to pay $250,000 in restitution for conspiring to provide gifts and services to public officials in exchange for favorable official action, and for tax evasion. According to Ricker’s plea agreement and court documents, Ricker is a real estate broker and president of Ricker Brothers, Inc. Ricker and other co-conspirators had ownership interests in Greenbelt Metropark (which sought to design, develop and build a mixed-use project) and Day Homes (which was incorporated to construct single-family homes). From about 1997 through at least September 11, 2008, Ricker and his co-conspirators regularly provided money, in-kind campaign contributions and other items to state and local officials, in exchange for obtaining beneficial treatment for the Greenbelt Station site plan and Day Homes. Finally, Ricker under-reported his taxable income by more than $1.1 million for tax years 2004 to 2007.
Insurance Broker Sentenced for Bribery, Kickback, Fraud and Perjury
On November 16, 2012, Trenton, N.J., Francis X. Gartland, of Baltimore, Md., was sentenced to 135 months in prison and three years of supervised release. Gartland, the former insurance broker for the Toms River Regional School District, pleaded guilty to charges of mail fraud, conspiracy to defraud the IRS, and perjury. According to court documents, from 2002 to 2010, Gartland and co-conspirators Frank D’Alonzo, Frank Cotroneo and others paid $1 to $2 million in bribes and other benefits to Michael J.Ritacco, then superintendent of schools. The payments were made to allow Gartland to obtain and keep the insurance contract with the district. Gartland admitted that in 2002, he, Ritacco, Cotroneo, and D’Alonzo agreed to have Ritacco approve a workers’ compensation insurance contract between Gartland and the school district in which the contract fee would yield $500,000 to $600,000 per year in excess fees, which would be used to pay bribes and kickbacks to Ritacco. Gartland admitted his role in conspiring with Ritacco to defraud the IRS by hiding these bribes and other benefits that were paid to Ritacco – and to other individuals at Ritacco’s direction – during the same period. To conceal the scheme, Gartland and Ritacco agreed to use middlemen, shell companies, sham consulting contracts, and third-party payments to secretly pass hundreds of thousands of dollars in cash bribes and other payments to Ritacco. Gartland also filed fraudulent individual tax returns for tax years 2004 through 2007 and to conspired with Cotroneo and Thomas O’Leary to evade their respective federal income taxes. In addition, Gartland admitted that on January 23, 2012, he committed perjury when he submitted a false affidavit that stated his payments to D’Alonzo and another individual were not, and were never intended to be, disguised bribes to Ritacco. Gartland also admitted his role in a scheme to funnel thousands of dollars in illegal campaign contributions through straw contributors to the Democratic primary election campaign of Joseph Vas, who was running for Congress in 2006.
Wisconsin Man Sentenced in Ho-Chunk Indian Nation Bribery Case
On October 24, 2012, in Madison, Wis., Timothy Whiteagle, of Black River Falls, Wis., was sentenced to 120 months in prison, three years of supervised release, and ordered to pay $162,854 in taxes to the IRS. Whiteagle was convicted by a jury on August 1, 2012, on bribery, tax, and obstruction charges. According to the evidence presented at the trial, the Ho-Chunk Nation, an Indian tribal government, operates casinos in the Western District of Wisconsin and annually receives federal grants well in excess of $10,000. Whiteagle is a Ho-Chunk tribal member. From 2002 to 2009, Whiteagle, at times with the assistance of Deborah H. Atherton, acted covertly as a behind-the-scenes consultant for clients seeking to do business with the Ho-Chunk Nation. The clients included companies that provided cash access services (such as check cashing and ATMs) at Ho-Chunk casinos, and a company that sought to provide mortgages and housing for tribal members. Whiteagle received over $3 million dollars from the clients. Clarence Pettibone was an elected legislator of the Ho-Chunk Nation. Whiteagle and Atherton offered and gave the money and valuables to Pettibone to influence and reward him for helping certain clients do business with the Nation. On July 11, 2012, Pettibone was sentenced to 60 months in prison. Atherton was sentenced on October 10, 2012, to 50 months in prison. In a related case, Brian Johnson, Shakopee, Minn., was sentenced to four months in prison for lying to federal agents during the course of the bribery investigation.
Former City Clerk Sentenced for Embezzling City Funds
On October 24, 2012, in Wichita, Kan., Laura Whittley, a former city clerk of the City of Thayer in Neosho County, Kan., was sentenced to 12 months and a day in prison and ordered to pay $120,000 in restitution. Whittley pleaded guilty to one count of bank fraud and one count of money laundering. According to her plea agreement, she used more than one method to steal money from the city including:
– Pocketing cash paid by citizens for utility bills, municipal court payments, parks and wildlife licenses and permits.
– Issuing unauthorized checks to herself.
– Using a city credit card to pay for her personal purchases.
– Submitting fraudulent bills for cleanup work done after a large storm in May 2009. The bills were paid by the city, partly with funds received through the Federal Emergency Management Agency (FEMA).
In order to conceal the thefts, Whittley presented a fraudulent letter to Emprise Bank directing the bank to cash a $100,000 certificate of deposit belonging to the city. She had the bank put $50,000 into a new CD, and she deposited some of the remaining proceeds into the city’s account to conceal the thefts. She went back the next year and removed the remaining money in the CD without authorization in order to cover her embezzlement, which left the city’s general account depleted and unable to cover regular bills.
Maryland County Developer Sentenced in Extortion Scheme
On October 3, 2012, in Greenbelt, Md., Karl Granzow, of Upper Marlboro, Maryland, was sentenced to 18 months in prison and three years of supervised release for conspiring to commit extortion and cause false statements to be filed with the Federal Election Commission and income tax evasion. Granzow was also ordered to pay a $10,000 fine and forfeit his financial interest in Greenbelt Metropark. Granzow and his co-conspirators had ownership interests in Greenbelt Metropark, which sought to design, develop and build a mixed-use project near the Greenbelt Metro Station, called Greenbelt Station. According to his guilty plea, from 1997 through September 11, 2008, Granzow and others provided money and other items to state and local government officials in exchange for approval letters for the Greenbelt Station Detailed Site Plan and other beneficial treatment. Further, Granzow and his co-conspirators concealed campaign contributions to the state and local officials that were above state and federal legal limits by using conduits and in-kind contributions. Additionally, Granzow prepared or caused to be prepared a federal income tax return for the calendar year 2004 which failed to report $225,974 in taxable income, resulting in a tax loss of $74,191.
Former Executive Director of South Amboy, N.J., Housing Authority Sentenced
On October 1, 2012, in Trenton, N.J., Thomas J. O’Leary, the former executive director of the South Amboy Housing Authority, was sentenced to 30 months in prison, three years of supervised release and fined $12,000. O’Leary, of South Amboy, pleaded guilty to charges of conspiracy to defraud the Federal Election Commission by participating in a scheme to funnel thousands of dollars through straw contributors to Joseph Vas’s campaign and to one count of tax evasion. According to court documents and statements made in court, O’Leary admitted he participated in a scheme with co-defendant Francis X. Gartland, an insurance broker based in Towson, Md., to use “straw” or “conduit” contributors to make contributions to the 2005-2006 Vas congressional campaign for the 13th Congressional District. Gartland, through his various companies, was the insurance broker of record for the City of Perth Amboy and the Perth Amboy Board of Education. Gartland received thousands of dollars in commissions for those representations and split a portion of the commissions with O’Leary. The purpose of the straw contributions to Vas, then the Mayor of Perth Amboy and a New Jersey State assemblyman, was to ensure that Gartland maintained the lucrative insurance brokerage representations with the City of Perth Amboy and the Perth Amboy Board of Education. O’Leary acknowledged that he recruited five straw contributors to contribute $2,000 each to Vas’ federal campaign committee. He reimbursed the straw contributors by cash or check with funds provided by Gartland. The Federal Election Campaign Act prohibits straw contributions. O’Leary also admitted that for tax year 2006, he evaded the assessment of thousands of dollars of federal income tax by concealing income and other benefits that he received from Gartland.