Corruption accomplice Shelton gets 6 years in prison

Posted: September 6, 2018 at 12:30 p.m.
Updated: September 6, 2018 at 3:23 p.m.

Randell G. Shelton Jr. leaves the John Paul Hammerschmidt Federal Building Thursday in Fayetteville. Shelton was sentenced to six years in prison as an accomplice in a kickback scheme involving state grants.

FAYETTEVILLE — Randell G. Shelton Jr., an accomplice in a kickback scheme involving state grants, was sentenced to six years in prison today.

U.S. District Judge Timothy L. Brooks also ordered Shelton to serve three years of probation and pay $660,698 in restitution.

Before his sentence was announced, Shelton made an impassioned plea to Brooks. He stood at edge of the judge’s bench, gripped the rail with both hands and asked for however long a sentence the judge thought fair — just so long as he was granted home confinement with his newborn daughter, born in July.

“I ask and beg you, not for me but for my family and for my daughter’s sake, please do not keep me from my responsibility of being a father,” Shelton said at the conclusion of a 10-minute speech.

“If I could do anything all over again, I would still work with Ecclesia but I wouldn’t have given a penny to Jon Woods,” Shelton said.

Shelton was convicted May 3 on 12 corruption-related counts as an accomplice with former state Sen. Jon Woods in a kickback scheme involving Ecclesia College in Springdale. Shelton was convicted of passing along the bulk of his consulting fees from Ecclesia College to Woods to disguise kickbacks in return for state grants.

Shelton also helped start a business that secured $39,198 in state grants to buy alternative medical equipment for Woods’ father to treat his multiple sclerosis, according to court testimony today.

The stated purpose of Arkansas Health and Economic Research Inc. was to explore alternative medicine approaches, according to its state grant application. The actual purpose was to provide alternative treatment free to Woods’ father and to supply Shelton with a bank account he could draw on for other business and personal expenses, Brooks found during Shelton’s sentencing hearing.

The government argues Shelton and Woods’ plan to steer of state grant money to Arkansas Health and Economic Research of Benton should add to the potential sentence Shelton faces, although neither Shelton nor Woods was ever charged with crimes related to the Health Research grant awards.

Other patients used the equipment, company Director Charles Snider of Benton testified today, but the only treatment with documentation was for James Woods.

Shelton of Kemp, Texas, was convicted of one count of conspiracy and 11 counts of mail or wire fraud. He faces up to 20 years in prison.

Shelton had asked for a delay in his sentencing last month, noting his first child was born in July.

Woods was sentenced Wednesday to more than 18 years in prison for his part in the Ecclesia scheme and others.

Shelton’s sentencing was the second of four scheduled this week and next in an ongoing federal and state investigation. His and Woods’ corruption case was the first in a string of indictments involving abuse of grants from the state’s General Improvement Fund. Further investigations resulted in other charges for other former lawmakers involving bribery and Medicaid fraud.

Five former lawmakers stand convicted in the investigations. Jeremy Hutchinson, who was chairman of the Senate’s Judiciary Committee, resigned Friday after he was charged by federal authorities with diverting campaign money to his personal use.

Shelton lost his property manager’s job in Little Rock in July 2013 and helped Woods launch the kickback scheme that September, according to the government.

The kickbacks involved $550,000 of the more than $717,500 in General Improvement Fund grants the small, private Christian college received from 2013 through 2014. Woods directed the most grant money to the school at more than $350,000, court records show.

An alleged co-conspirator, Oren Paris III, then Ecclesia’s president, was indicted with Woods and Shelton in March 2017. Paris pleaded guilty April 4 to one count of conspiracy. He resigned his post at Ecclesia before his guilty plea. His sentence is pending.

Paris disguised the kickbacks from Ecclesia grants as consulting fees paid to Shelton’s business, Paradigm Strategic Consulting, according to the indictment. Shelton then passed the money along to Woods and former state Rep. Micah Neal of Springdale, the government contends.

Neal pleaded guilty Jan. 4, 2017, for his role in the scheme and was the government’s first witness in the case. His sentence is also pending.

The amount of money Woods is accused of receiving as a kickback isn’t specified in the indictment. Prosecutors claim much of that money was paid in cash, except for a $40,000 wire transfer from Shelton.

Total deposits to Paradigm Strategic Consulting’s account at Arvest Bank from 2013 through 2015 were $285,994, with Ecclesia providing $267,500, or 93.4 percent, of all deposits, according to bank records presented by Steven Williams, a certified public accountant assigned to criminal investigations for the FBI.

Shelton made the $40,000 wire transfer directly to one of Woods’ bank accounts, another $1,800 to a band Woods’ managed called the Plaid Jackets, $170,420 in cash withdrawals and another $9,235 in automatic teller machine withdrawals from the Paradigm account in the same time period, bank records summarized by Williams show.

Shelton made a total of $221,455 of either cash withdrawals or direct transfers to Woods or Woods-related accounts, Williams testified.

That Oct. 1, 2013, wire transfer was a loan, Shelton’s defense contended. Shelton also claimed his business as a consultant and fundraiser for Ecclesia was legitimate and money paid by Paris was for services provided.

Sean Mulryne, attorney for the public integrity section of the U.S. Department of Justice, said it was no coincidence Shelton landed a high-paying job at Ecclesia within months of losing a job.

“Think not only of what happened, but what did not happen,” Mulryne said. “What did not happen was anything that would justify paying Randell Shelton more than $267,000 through Paradigm.”

Shelton moved back to his family’s ranch in Kemp, Texas, southeast of Dallas after his indictment.

FBI agent John Munns’ evidence and testimony also showed Shelton’s company was paid by Ecclesia College half of the amounts paid in grants from the West Central Arkansas Planning and Development District, along with smaller payments after other grants.

Two grants of $50,000 each are involved from the West Central district, based in Hot Springs. The records showed cash deposits of $25,000 by Shelton into the Paradigm accounts and also showed cash withdrawals from Paradigm’s account of $21,000 after the first grant and $13,000 after the second.

Shelly Koehler of Fayetteville, one of Shelton’s attorneys, said Shelton had a long history of successful enterprises including fundraising. He was helping Ecclesia pursue an $18 million expansion plan, she said during his trial.

NW News on 09/07/2018