FAYETTEVILLE -- The U.S. Justice Department added a conspiracy charge against former state Sen. Jon Woods and two others in a bribery scheme, according to a revised indictment released Thursday.
Woods; Oren Paris III, president of Ecclesia College in Springdale; and consultant Randell G. Shelton Jr. were charged with one count of conspiracy to commit fraud.
Woods also faces 15 counts of fraud, all relating to either wire or mail transfers of money. Paris and Shelton are named in 14 of the fraud charges. Woods is also charged with one count of money laundering in connection with the purchase of a cashier's check.
The case involves grants from the state General Improvement Fund, which is controlled by legislators. The Justice Department alleges that Paris paid Woods and former state Rep. Micah Neal of Springdale kickbacks in return for a total of $550,000 in grants from those two legislators to his college from 2013 through 2014.
Shelton is accused of using a consulting firm he owned as a way to pass along the kickbacks to Neal and Woods through consulting fees approved by Paris.
More indictments are expected against other defendants, attorneys for the defense said at a May 23 hearing before U.S. District Judge Timothy Brooks. Attorneys for the government confirmed during the hearing that an investigation is ongoing. Portions of the case's record remain sealed to protect that investigation, the attorneys said and court records confirm.
Ecclesia, a private, Christian college, also received improvement fund grants from other lawmakers who are not implicated in the indictments, grant records show. In all, the college received $717,500 in improvement fund grants from 2013 through 2014.
Neal, a Republican, pleaded guilty Jan. 4 to one count of conspiracy to commit fraud, admitting that he took two kickbacks totaling $38,000 in exchange for directing General Improvement Fund grants to two nonprofits. He has not been sentenced.
Thursday's indictment replaces previous grand jury indictments against Woods, Paris and Shelton. All three defendants have entered innocent pleas and are set for trial in Fayetteville on Dec. 4. They were first indicted on March 3 with a superseding indictment filed April 18.
Paris paid Shelton's consulting company $267,000 out of college money from 2013-15, according to court documents. Shelton is described in the latest indictment as a mutual friend of Paris and Woods.
The indictment does not give a total figure of what Woods, a Springdale Republican, is accused of receiving in kickbacks because portions of it were reportedly paid in cash.
The indictment doesn't name the college involved, but says Paris is its president and describes it as a work-study college located in Springdale. Each of these particulars, along with the amount and dates of the state grants as given in court documents, match Ecclesia.
Woods and Neal also took kickbacks from another nonprofit group, a workforce training program that returned $400,000 in grants after being questioned by federal investigators, according to the indictment. Both the indictment and Neal's guilty plea say the two lawmakers cooperated in the workforce grants in return for kickbacks.
The indictment states the workforce training program returned the grants in 2013. Grant records and a state audit show that the only workforce training program to receive and then return $400,000 in 2013 was a Bentonville company called AmeriWorks.
AmeriWorks was set up by Milton "Rusty" Cranford of Rogers, a lobbyist who represented Decision Point, a Bentonville-based nonprofit corporation that provides behavioral and substance abuse treatment. Decision Point staff helped file the grant and the organization received the grants on AmeriWorks behalf, with Cranford signing the application for the grants in question, according to state records and court documents.
The General Improvement Fund consists of state tax money left unallocated at the end of each fiscal year and interest earned on state deposits. Each legislator is given a share of the fund to be directed to a nonprofit group or government entity.
The Arkansas Supreme Court heard arguments Sept. 7 in a lawsuit that seeks to end the practice of the lawmaker-directed grants to local projects.
The trial of the three men indicted in the alleged kickback scheme is expected to last more than a week, according to attorneys from both sides in previous court hearings. The defense expects to call more than 20 witnesses.
Brooks ruled Sept. 8 that federal prosecutors can use about 40 secretly recorded telephone calls as evidence in the case. The recordings were made by a defendant in a separate but related case, according to court documents.
"The court agrees with the government that, under controlling legal precedent, it would not have been a Sixth Amendment violation for the government to do exactly what Mr. Woods accuses it of doing," Brooks wrote in his order and opinion.
In a related filing last month, Gregory Payne, an attorney for Paris, filed a motion to suppress statements Woods made to federal investigators implicating Paris and some subsequent audio recordings. According to the motion, Woods told investigators that he was involved in a kickback scheme involving General Improvement Fund money and Paris had full knowledge and was an active participant.
Paris' defense claims that those statements were made upon the insistence of Woods' attorney at the time who was also an attorney for an FBI investigator in a civil matter.
The three defendants face up to 20 years in prison on the fraud and conspiracy charges, if convicted. Woods faces an additional 10 years on the money laundering charge, if convicted.
All three may also be ordered to forfeit any money or property obtained through their actions, if found guilty.
Metro on 09/15/2017