N.O. Corruption Cases Now On Fast Track
NewOrleansChannel.com, December 30, 2004LINK
NEW ORLEANS -- The head of the FBI in New Orleans has been tapped to lead the FBI division that investigates cyber crime in Washington, and Louis Reigel III said Wednesday that his final 90 days in New Orleans will be busy.
Reigel said the public can expect many more indictments in the ongoing investigations of corruption in the Orleans Parish school system, Traffic Court and the judciary -- some of them of high-profile officials.
When Reigel came to the city 19 months ago, tipsters were not in the habit of calling the FBI. Now the phones are ringing and the separate corruption squads are swamped with active investigations.
"The public corruption squads in Louisiana are very, very busy," Reigel said. "We've had some significant indictments in the past -- had a state judge. Now we're looking at a second state judge, five local police officers, and 13 to 14 other indictments of individuals who were political in nature."
Reigel said the most suprising case involved millions of dollars in fraud and theft uncovered in the school system investigation.
"I was shocked," Reigel said. "I mean, many of these employees have children in the school system. When we are ranked 49th in the nation as far as the educational quality goes, it's disturbing to see these individuals would take advantage of the greed that I have seen. Some of these cases that are coming down in the near future. The people of Orleans Parish are going to be very, very upset with some of the activities that were occurring, and I think they will find it unvbelievable that they were occurring."
So far, 24 people have been indicted and 12 convicted in the schools investigation.
"I'm hoping in the next four months we'll have an additional 25 to 30 indictments, and then we'll know if we're going to get to that upper echelon," Reigel said.
In yet another investigation, a probe of contracts awarded during the administration of former Mayor Marc Morial began with a flurry of subpoenas to Morial confidants and a high-profile Valentine's Day raid on the Rampart Street home of Jacques Morial, the mayor's brother.
"We certainly are looking at lots of information that continues to come in to the FBI in regards to previous administrations," Reigel said. "Whether they be Morial or any other administration, there are issues we need to resolve. Some of them appear to be political in nature. Some of them appear to have, I think, benefitted political officials in ways they should not have benefitted."
Meanwhile, officials with the Metropolitan Crime Commission and U.S. Attorney Jim Letten credit Reigel with bringing the community together in an unprecedented way in the war on corruption in New Orleans.
Crime commission President Rafael Goyeneche said Reigel's departure will be a loss for the city. Reigel's replacement has not been named.Sitting Judge Indicted In Corruption Probe
NewOrleansChannel.com, September 29, 2004LINK
NEW ORLEANS -- An attorney for a state district judge in suburban New Orleans said Wednesday that his client faces an indictment accusing him of racketeering, conspiracy and mail fraud.
Attorney Frank DeSalvo said Judge Alan Green was indicted on charges stemming from an investigation -- dubbed "Operation Wrinkled Robe" -- into corruption at the Jefferson Parish Courthouse.
Also indicted is Norman Bowley, a former executive of Bail Bonds Unlimited.
Attorneys for both say their clients will fight all charges.
U.S. Attorney Jim Letten called a noon news conference to discuss developments in the ongoing public corruption investigation.New Indictments In Orleans School-Corruption Probe
December 16, 2004LINK
NEW ORLEANS -- Eleven people, including teachers and school secretaries, were indicted Thursday on fraud and theft charges as the FBI continues investigating corruption in Orleans Parish public schools system.
Others indicted included insurance brokers accused of paying kickbacks to a school system administrator in return for contracts. Three school system employees were indicted separately for allegedly stealing almost $150,000 from the system's federal credit union by withdrawing money from accounts of customers who were dead or had moved.
More than a dozen people have already pleaded guilty, or agreed to do so, to charges of fraud and bribery in various schemes that have bled millions from the city's school system, considered one of the country's worst.
Earlier this week, schools Superintendent Anthony Amato announced that the system faces a multimillion-dollar deficit, partly the result of theft and corruption.
The federal investigation began last year, and the FBI and other law enforcement groups have been working at school board headquarters examining financial records, trying to determine who is stealing from the system.
In the first indictment, Glenn Davis, 51, and Charles Swanson, 59, are charged with paying kickbacks to school risk manager Carl Coleman. The indictment alleges that Davis, Swanson and Lillian Smith Haydel, who is already convicted in the scheme, paid Coleman in exchange for lucrative school system health insurance contracts from 1997 through 2001.
Haydel pleaded guilty on Oct. 6. Her sentencing is set for Jan. 12.
In the second indictment, two teachers and two clerical workers at Fannie C. Williams Middle School are charged in a conspiracy and extortion scheme.
John Baker, 42, Drena Clay, 38, Trynitha Fulton, 26, and Debra Harrison, 42, are named in the indictment. The indictment alleges that Baker and Fulton inflated the number of hours they worked and kicked back money to Clay and Harrison, who approached them with the scheme and threatened them if they refused to participate.
The third indictment alleges that Juawanne Scott, 32, Sherry Wilkerson, 47, and Angela Williams, 38, conspired to steal almost $150,000 from the school system's credit union for which they all worked.
In one scheme, the women failed to debit checks drawn on their personal accounts, giving themselves an unlimited financial reservoir, the indictment says. When auditors noticed large irregularities in the credit union's corporate account, the women allegedly began drawing money from the accounts of people who were either dead or had moved.
The fourth indictment alleges that Debbie Williams, 42, and Loleta Wright, 39, both clerical workers at McMain Secondary School, would steal and cash the paychecks of workers no longer employed by the system.
The investigation is centered around Bail Bonds Unlimited and allegations that the company's founder, Louis Marcotte III, paid bribes to judges and jail personnel in order for his company to gain favorable treatment.
The investigation already has resulted in a 46-month federal prison sentence for former judge Ronald Bodenheimer, who last year admitted to accepting gifts from Marcotte in exchange for business assistance, plotting to frame an FBI informant on a drug charge and scheming to fix restaurateur Al Copeland's child-custody case.
Bodenheimer was sentenced to 46 months in jail under a plea bargain with prosecutors. He had faced a sentence of up to three years and six months for mail fraud, mail fraud conspiracy and drug conspiracy, but federal prosecutors offered him a reduced sentence in exchange for "substantial cooperation" in the investigation.
In March, Marcotte pleaded guilty to racketeering for bribing Bodenheimer and another judge -- likely Green. Marcotte is awaiting sentencing.
Prosecutors said Marcotte gave the judges cash, meals and alcoholic drinks and paid for their hotel rooms at casinos on the Mississippi Gulf Coast. They said he also hired two of Bodenheimer's children and paid their health insurance at the judge's request.
In July, three former deputies assigned to the Jefferson Parish Correctional Center and a former captain with the Jefferson Parish Sheriff's Office were indicted for allegedly using their positions to aid Marcotte.
The former captain, William Giangrosso, 52, of Kenner, faces one count of conspiracy to commit mail fraud. In a separate bill of information, former deputies Landry Forges, 43, of Harvey; Myrtis Randall, 62, of Harvey; and Edward Still, 64, of Marrero, each are charged with conspiracy to commit mail fraud.
In August, prosecutors told Green in a letter that he is a target of the investigation. The government sent a similar letter to Bowley, who was videotaped by the FBI as he allegedly delivered $5,000 in cash to Green.
On Monday, Green was accused in federal and state civil lawsuits filed by Kmart Corp. of rigging a personal injury case to benefit Bowley and another Marcotte associate, Kenneth Beck.
Kmart claims that FBI telephone recordings captured Bowley and Beck discussing out-of-court meetings with Green.
Kmart attorney Jack Truitt said he listened to the tapes Aug. 25 when he was called as a witness before a federal grand jury investigating the allegations of judicial corruption in Jefferson Parish. Truitt said he was invited to the session to discuss the Kmart case.
The suits claim actions by Green, Beck and Bowley fall under federal racketeering laws.
Copyright 2004 by TheNewOrleansChannel.com. The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.10 To Plead Guilty In Orleans Schools Probe
July 2, 2004LINK
NEW ORLEANS -- Ten people were charged Friday by federal prosecutors in connection with alleged fraud and kickbacks involving the Orleans Parish public school system.
U.S. Attorney Jim Letten said all 10 have agreed to plead guilty.
Eight current and former system employees were charged with receiving money from false reimbursements, fraudulent stipend payments and, in one case, paychecks for an employee who had left the system. They are: Louis Serrano, 29, Conchetta Carbo, 25, Armtrice Cowart, 27, Tremica Knight-Henry, 27, Rachelle Hunter, 27, Monique Landry, 28, Latasha Williams, 31, and Tamika Winesberry, 31.
Prosecutors allege that $70,000 was stolen in that scheme. The employees kicked back half of the illegal payments. The charge did not allege who received the kickbacks.
In a related charge, former payroll clerk Terri Smith Morant was accused of stealing $250,000 in a series of checks made out to herself.
Also, an insurance contractor, Lillian Smith Haydel, is charged with paying kickbacks to the school system's former insurance manager, Carl Coleman.
Coleman pleaded guilty in February to other charges stemming from the investigation.
Smith is the wife of Glen Haydel, an investment banker and an uncle of former Mayor Marc Morial.
An independent auditing firm hired to clean up the district's finances found more than $20 million in missing or misspent money.
So far, the corruption probe has led to several convictions for insurance fraud involving employees who received kickbacks in exchange for helping secure lucrative district contracts.
School board member Jimmy Fahrenholtz said students are ultimately the ones who pay.
"The amount of money that's been wasted through fraud, corruption, incompetence," he said. "We're a cash-strapped district. Every penny that's lost comes out of the classroom."
In April, a group of federal and state investigators began combing the system's administrative offices.
The group, which began its probe at the request of schools Superintendent Anthony Amato, was especially interested in the system's finances.
"We don't know where the truth begins and where the truth ends," Amato said in April. "That's why I said enough already. We need experts -- people who really know how to do this. The end goal for us the goal is to uncover and identify and prosecute anyone who is enriching themselves at the expense of the children."Pleas Made In School System Corruption Probe
Official Says Deal Is Just The Beginning
February 18, 2004LINK
NEW ORLEANS -- A former New Orleans school system official and a Texas contractor who gave him more than $300,000 in kickbacks pleaded guilty Wednesday in U.S. District Court to tax evasion and felony bribery charges.
U.S. Attorney Jim Letten said the admissions by former schools insurance department manager Carl Coleman and contractor Jeff Pollitt mean they will face sentences of up to 30 years in prison.
Federal officials said Pollitt admitted to making massive cash bribes to Coleman in the awarding of repair contracts to schools.
In most cases, the work was never completed or poorly done.
School Board member Jimmy Fahrenholtz said this is just the tip of the iceburg.
"This thing was so complicated, so invasive to our system there's got to be quite a few others involved in it," Fahrenholz said. "I don't think Mr. Coleman could have operated in a vacuum."
Letten said the investigation of the school district continues.
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