FAYETTEVILLE -- The three defendants accused of participating in a kickback scheme involving state grants pleaded not guilty to a revised set of charges Wednesday.
Former state Sen. Jon Woods of Springdale; Oren Paris III, president of Ecclesia College in Springdale; and consultant Randell G. Shelton Jr., formerly of Alma, are accused of a plan to pay Woods, who was in office at the time, and another legislator kickbacks in return for steering state grants to the college.
Paris paid fees to Shelton's consulting firm, according to the indictment. Shelton in turn passed kickbacks to Woods and then-state Rep. Micah Neal, both R-Springdale, according to the indictment.
Defense attorneys spoke after Wednesday's arraignment about their claim the government is not providing them access to electronic records in a usable form.
Defense attorney Shelly Koehler said the Justice Department's "conduct borders on either incompetence at best, or bad faith at worst" in a motion filed Monday on behalf of attorneys for all three defendants in the case.
The U.S. Attorney's Office for the Western District of Arkansas, which is prosecuting the case, will prepare a reply to the defense motion about the documents, spokesman Charles Robbins said Wednesday afternoon.
Woods 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. All three are charged with one count of conspiracy to commit fraud, which was the count added in the latest revised indictment. Woods is also charged with one count of money laundering in connection with the purchase of a cashier's check.
This is the second time charges against the men have been revised since they were originally indicted in March. None of the defendants appeared at Wednesday's arraignment, with all signing waivers allowing their attorneys to speak for them.
The case involves grants from the state General Improvement Fund, which is controlled by legislators. The 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 Justice Department alleges Paris paid kickbacks in return for a total of $550,000 in grants from Woods and Neal to his college from 2013 through 2014.
Woods is also accused of using his office to pass legislation in 2015 that would have created a special General Improvement Fund account in the state Department of Higher Education of up to $2.5 million. The fund would benefit only work-learning colleges that are "part of the Works College Consortium." The only college in Arkansas that is a member of that consortium is Ecclesia, according to the consortium's website. The law is still on the books, but no money was ever appropriated to the account, according to the state Department of Finance and Administration.
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 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 improvement fund grants to two nonprofits. He has not been sentenced.
All three defendants are set for trial in Fayetteville on Dec. 4.
When defense attorneys asked for the evidence to be used against their clients, they were presented with 4.3 million computer files, according to the motion filed Monday by Koehler, Shelton's defense attorney. Many of those files were numbered and not named, giving no clue to their contents. The files often lacked dates, the defense attorneys said Wednesday. The first batch of documents received was encrypted and, even after decoded, could not be searched electronically for keywords, the defense attorneys said.
"It was as if someone backed up to your office in a tractor-trailer with 1,700 boxes filled with 4.3 million documents, all unmarked," said Travis Story, attorney for Paris.
In another filing in the case Sept. 19, Woods' attorney notified the court he plans to call an expert witness, law professor Richard Leo of the University of San Francisco, to testify at trial about law enforcement interrogation techniques.
Those interrogation techniques can become psychologically coercive and lead to involuntary statements, according to the motion.
NW News on 09/28/2017
Print Headline: Defendants renew not guilty pleas in kickback case