FAYETTEVILLE -- A judge Tuesday delayed the public corruption trial involving former state Sen. Jon Woods until Dec. 4, in part because of an ongoing federal investigation into state General Improvement Fund grants.
More indictments are expected against other defendants, attorneys for the defense said at a hearing before U.S. District Judge Timothy L. Brooks. Attorneys for the government confirmed during the hearing an investigation is ongoing. Portions of this case's record remain sealed to protect that investigation, the attorneys said and court records confirm.
GIF Money
Arkansas General Improvement Fund grants are distributed by eight nonprofit economic development districts set up around the state. Each grant requires approval by a sponsoring state lawmaker.
Source: Staff Report
U.S. Attorney Kenneth Elser didn't dispute defense claims there would be more indictments.
Woods, R-Springdale, is accused of taking kickbacks in return for directing state improvement fund grants to certain recipients. Oren Paris III of Springdale, president of Ecclesia College, is accused of paying some of the kickbacks. The college passed its kickbacks through a consulting firm owned by Randell G. Shelton Jr. of Alma, the indictment says.
Part of those fees went to Woods and to then-state Rep. Micah Neal, R-Springdale, according to the indictment. Neal pleaded guilty to public corruption charges Jan. 4.
The other three are being tried together. Paris requested a separate trial but was denied at the hearing.
Future indictments aren't expected to be against Woods, Paris or Shelton, Travis Story of Fayetteville, defense attorney for Paris, said after the hearing. Story said during the hearing "it is very likely there will be other indictments."
Woods' defense attorney, Patrick Benca of Little Rock, also said at the hearing the government has indicated there will be other indictments. The investigation's findings could shed light in this case, defense attorneys said.
Federal court records show at least two filings entered in the case before Tuesday's hearing are under seal by court order. One was submitted May 8 and the other Monday, in response to the first.
"The government is investigating other schemes that may or may not be relevant," Elser said during the hearing. Brooks asked Elser if that investigation and any future indictments would cause further delays in this case. Elser said no.
The defense requested the delay, citing the investigation and the extensive financial records and grant documents to review.
"You'll get your six-month continuance, but that's it," Brooks said. "There's no more coming back to the well. You are going to get upfront everything you are going to get."
The judge stressed his lack of leeway would apply to the government also.
Paris paid Shelton's consulting company $267,000 out of college money from 2013 to 2015 without notifying his college's board until October 2015, according to the indictment. Shelton is described in court documents as a mutual friend of Paris and Woods. Neal received $18,000 for his part in obtaining a grant for the college and another $20,000 for obtaining a grant to another nonprofit group, according to his plea.
Woods faces 15 counts of wire fraud. Paris and Shelton are named in 13 of the wire fraud counts. A count of mail fraud also names all three men. In addition, Woods faces a count of money laundering. The indictment doesn't give a total of what Woods is accused of receiving in kickbacks because portions of it were paid in cash, court documents say.
The indictment never names the college involved but says Paris is president of it and it's a work-study college in Springdale. Each of these particulars, along with the amount and dates of the grants given in court documents, match Ecclesia. Also, Benca mentioned Ecclesia by name Tuesday in a discussion during the hearing of where documents in the case came from. Ecclesia received $550,000 in grants with the support of Woods, Neal or both. All the grants were issued from 2013 through 2014. Ecclesia received $717,500 in improvement fund grants in 2013 through 2014.
The General Improvement Fund is state tax money left unallocated at the end of each fiscal year and interest earned on state deposits. Each legislator is given a share and can direct where he wants it to go as long as it goes to a nonprofit group or government entity.
An estimated 500,000 pages of bank records, grant records and other documentation has to be reviewed, defense attorneys said in arguing for the delay. A transcript of one witness' testimony before a federal grand jury alone consists of 1,700 pages, the judge was told. With more than 20 witnesses expected for the defense, the trial is expected to last more than a week, Benca said.
Paris is ready to go to trial now, Story told the judge in seeking a separate trial. Paris also opposed the motion to delay the trial.
A portion of the case has nothing to do with the college, Story said and court documents show. Woods' indictment includes three counts related to another nonprofit group, a workforce training program that returned its $400,000 grant. Both the indictment and Neal's guilty plea say the two lawmakers cooperated in the workforce grant in return for kickbacks. Lumping the cases together casts his client in a bad light, Story argued.
The indictment states the workforce training program returned the grant in 2013. Grant records and a state audit show the only workforce training program to receive and then return $400,000 in 2013 was a Bentonville company called AmeriWorks.
Paris has a right to a speedy trial and shouldn't be forced to await developments in other cases, Story argued in the matter of the ongoing investigation.
"This case puts a severe cloud over our heads," Story said, making it difficult for Paris to carry out his duties as college president, particularly in fundraising.
Brooks replied it wouldn't serve either justice or the public interest in efficiency to have two trials about one case. Which counts are against Woods alone are matters a jury can easily discern, especially if given proper jury instructions, the judge said.
Benca had a scheduling conflict with the Dec. 4 date, but Brooks told him that was the only available time that wouldn't delay the trial even further and allow more than a week for the proceedings.
"I apologize Mr. Benca, but it's a big case," Brooks said.
NW News on 05/24/2017