An indictment charges a culture of corruption existed at the Mississippi Department of Education. A federal grand jury indicted former MDE Director Cerissa Neal, Joseph Kyles, David Hunt, and Lambert Martin for a bid-rigging and kickback scheme.
Neal allegedly took kickbacks in exchange for steering contracts. The indictment accuses her of bid-rigging and splitting contracts so they would fall below the minimum thresholds that required competitive bidding. She allegedly manufactured phony, inflated price quotes to justify the sweetheart deals.
MDE wanted to convert teacher record files into digital media in 2014. Neal allegedly split the contract into two contracts of $98,875. State law requires competitive bidding for personal services contracts over $100,000. The Director's actions ensured no such bidding took place.
Neal awarded the first contract to Hunt Services. David Hunt is the owner of the company. Neal allegedly created two phony competing quotes from Docufree and Bits & Bytes. However, the money didn't stay with Hunt. Hunt in turn paid $15,700 to Kyles.
Neal steered the other $98,875 microfiche contract to a Hunt-owned company, Doc Imaging later in 2014. Bogus quotes were again used to justify the award. Hunt paid $14,730 to Kyles two days after receiving payment from MDE for the full amount of the contract in September 2014.
Hunt companies paid $5,000 to Bits & Bytes after receiving payment for the contracts.
Kyles, Martin, and Neal allegedly conspired to use federal grant funds to purchase equipment from Kyles from 2014 to 2016. Purchase orders were kept below the $50,000 threshold for equipment purchased from Kyle. Neal provided false quotes from Promethean Company to justify the awards. Promethean was clueless about the quotes made in its name. Martin "controlled" a company, Educational Awareness. The company would provide a second quote for each Kyles purchase order. All of Martin's quotes were higher than the Kyles quote.
MDE paid $650,000 to Kyles for purchases of educational equipment. Kyles paid Educational Awareness over $65,000. Kyles allegedly paid Neal over $42,000 in kickbacks.
MDE issued an RFP for conversion of microfice files in March 2015. Doc Imaging (Hunt) submitted a price quote but lost to a legitimate" competitor from Texas. The loss did not sit too well with Neal. She tried to get the award thrown out and the contract re-bid. Neal allegedly got her way. All companies resubmitted the same bids except for Hunt. He submitted a bid that was lower than the Texas company's bid and much lower than his earlier bid.
MDE paid $152,352 to Doc Imaging on June 9, 2016. Doc Iamging paid $30,975 to Kyles a week later. Kyles paid $3,000 to Garland Consulting, a Neal-controlled company.
The case is assigned to U.S. District Judge Tom Lee and Magistrate Keith Ball. The grand jury returned the indictment on February 25 but it was not unsealed until August 26. The defendants were not arrested until August.
Joseph Kyles: wire fraud, bribery, bribery involving federal programs, conspiracy to commit wire fraud and bank fraud. (Counts 1-12)
Lambert Martin: Conspiracy to commit wire and bank fraud, wire fraud (Counts 2-8)
David Hunt: Conspiracy to commit wire and bank fraud, wire fraud (Counts 1-8)
State Auditor Stacey Pickering questioned payments to Kyles in a 2017 press conference. JJ reported on September 28, 2017:
State Auditor Stacey Pickering blasted the Mississippi Department of Education for awarding contracts while trying to get around public purchasing laws in a report. +. In other words, the State Auditor accused the Superintendent of repeatedly giving sweetheart deals to her friends while the Board sat back and watched. Payments were made for hundreds of thousands of dollars with no documentation while numerous contracts were structured to avoid bidding and any review by outside parties.JJ reported in 2016 that Superintendent Dr. Carey Wright's friends got over $600,000 in sweetheart contracts.
The most egregious example were the payments made to the Kyles Company. The company is owned by Joseph Kyles, a community activist in Memphis. MDE paid $214,470 to Kyles in 2015 yet could not produce a contract for the company. MDE did not have any documents such a a procurement packet for Kyles. The only records are the actual payments. However, every payment was under $50,000:
▪ October 2014 – $49,300
▪ October 2014 - $49,950
▪ December 2014 – $28,994
▪ March 2015 - $36,700
▪ May 2015 - $49,525
Each payment is below $50,000- the threshold for competitive bidding for such contracts. MDE could not even say which districts received anything from Kyles nor what they received. The State Auditor couldn't even determine if the items purchased were even delivered to MDE. Earlier post with video of press conference and copy of report.
47 comments:
So how many indictments and scandals under Philly Bryant now? Why does no one go after him? You know there is a paper trail to him and my bet, Philly ends up in the slammer before all is said and done! Rumors are all over the place on this issue!!!!!!
It never stops-
yet another example of how this state is out of control with corruption and every 90 days the feds have to step in somewhere and flush the toilet.
why is this in FEDERAL court you ask?
cause this is part of the billions of federal dollers that flow into this state every 30 days so state government employees and ''not for profit charitable corporations'' can steal it.
remember the dew family, the dept of human resources director, the wrestler mr dibiase, the head of marine resources, bill walker, chris epps and his gang of merry men?
i could sit here for an hour naming all the crook film flammers.
fraud has become the biggest industry in mississippi
My oh my. Pass the biscuits, Mississippi!
Lawd it's hot!
Back in my day we used to just sweep sumthin like this under the rug!
will pb go down as the worst gov in history?
Perhaps someone should look into the relationship between Kyles and Dr. Wright......
I don't understand everyone's fascination with Phil. I'm no fan of him, and he has certainly earned his criticisms, but he has nothing to do with this.
MDE is a monster created by multi-year appointed board members who allow Dr. Wright (Wrong) to run the ship without consequence.
@10:07, you can't blame Phil for this one. He didn't appoint MDE directors. This was a bunch of crooks trying to beat the system. The bigger question is why didn't Pickering do anything. It took this long and a new auditor to get an indictment?
If bid rigging was an actual crime then there'd be a lot more inmates in MS prisons. It's the way state business is conducted here. Everyone knows that.
Wonder why the elephants aren't being investigated for this type crime since they run the show and have the power? Have a strong feeling the accused in this scheme are donkeys.
Come on, reel in a really big named fish and we'd respect you more. But we know why you don't. Elephants don't eat themselves...just donkey meat.
Ok, all of you MS legislators that read this blog.
We have had enough of this shit. Create and implement a law that takes away all PERS benefits from employees convicted of this kind of crap.
You had the balls to nullify the state flag, so let's see if you can stop the stealing.
"while the Board sat back and watched."
@11:03 leave it to the Federal government to turn a 3-week process into a 3 year one....
government appointments at all levels, both state and federal, are rarely based on merit. Its a gaping flaw in the system. We get lucky every now and then and get a good draw but more often than not, nope.
1103 - Auditor Shad White had nothing to do with this indictment. Hate to give credit to where credit is deserved, but Pickering did this. The reason it 'took so long" as you ask is because the Auditor does not bring the charges, get the indictment or do the prosecution. Once the Auditor, whether that is Pickering or your darling child Shad, completes the audit and makes their report, they have to turn it over to either the DA, the AG, or the US Attorney.
Why it takes a few years for them to get an indictment, I can't say. Whether it was tied up in the AG's office, or whether it went straight to the US Attorney, I don't know. But it is nothing new for indictments to be months, or years, after the initial findings.
Check the story about your hero worship of Shad. His report on the DHS scandal, released early this year, has not resulted in indictments for the players yet. They will be coming for many, including I am sure more than we have heard about so far.
And as was said earlier, can't blame this on on Phil. He will probably go down with other on the DHS mess, but the Governor does not have any control over the head of Dept of Education. That is one of the problems with MDE, that it is responsible only to a board - members of which have been appointed by a wide swath of politicians. Revamping MDE needs to be done - put it under the Governor since the Governor gets blamed for the failure of education in the state. But of course with Philip wanting to strip Tate of everything, he would probably try to let the Speaker of the House appoint the Superintendent.
Is the Mississippi Land Water and Timber fund still in business?? That was Lester Spell's little grant slush fund??...
11:34, I'd posit that the delay in bringing this case is related to its complexity; it takes time to establish relationships and articulate intent between criminal actors.
Reason number 101 why I am a Libertarian.
@ 11:34 I seem to recall several arrests being made in the DHS case Shad's office investigated. Those indictments were published on this website.
Pappy O'Daniel will go down as the worst governor in my book. Only reason it won't be official is that he was better at playing the "system" than the rest.
Any neither Pickering nor Shad is responsible here. It's their staff. Kudos to them for digging in and doing their job without front page coverage, and less pay than the talking heads.
12:14 - absolutely. But it was also said, or strongly implied, that more indictments were coming. Just as was noted above about this case, showing the connection, the conspiracy and the connections takes time. Part of the DHS deal was evident on its face, but the others that 'may' be involved haven't come out yet. If there are such indictments (which we all would bet on) they will be later.
Have they been arrested/booked yet? I don't see any reference to this.
12:31 - I would disagree that the Auditor himself is not responsible in any of these cases. Yes, it is the staff that does the work, that's true in most any organization. Pickering, as Auditor when this investigation was going down would have had to approve the process, the expenditure, and the reports that were released. The staff did the digging, just as the staff did the digging for Shad White at DHS. And I'm sure someone at MDE whispered in the ear of someone to suggest where they should look, just as they did at MDHS (and it wasn't Phil that did the whispering - he just 'reported' it when someone at DHS told his office about it --- as if his office didn't already know it was going on.
The fact that neither Pickering (at MDE) or White (at DHS) didn't kill the investigation is commendable. There have been a few Auditors before them where that wouldn't have been the result, but we won't name names in this post. Again.
Peer did this investigation in 2017 and turned it in. Can’t believe it took this long. When is Carey Wright leaving she was behind it all and worked with these folks before she came to Mississippi. After this Peer report she had to let Dr Porter go as well because she was paying his company while he was an employee of MDE.
Hey y’all!!! We got the flag changed though!! Momma, can you turn the air down please? It’s warm here in the basement and I’m still waiting on my Chef Boy R Dee ravioli and DiGiorno pizza bites You were supposed to bring me while I play my Nintendo. And yes....I’ll get one of those good state jobs when I turn 40 and move out. I hear there are a lot of new openings. Carry on straight people!!!
No doubt there are many other ( yet to be named) folks that have "certain" very tight sphincter muscle
right now.
1:38 - are you mixing two different issues/investigations or am I just lost? Could be either, I admit. I thought Dr. Wright was involved in a different set of contract deals - and I thought she came in to replace Dr. Neal. But I readily admit that I can't keep track of the highly paid (legally) and the evidently highly paid (illegally) staff at MDE?
11:30 - asking the federal government to handle what should have been a state government indictment/conviction is part of the problem. It appears to me that the feds stepped in because the state (you remember, Conway Hood - our former AG) didn't do squat. The feds indicted these folks on wire fraud, but if you start to read their indictment you can find dozens of state law violations that these folks did. Start with "taking kickbacks", after you get past the violations of state purchasing laws, fraud in the creation of false documents submitted to the agency, and keep on going.
If the feds took three years (following the auditor's report) how long did it take AG Hood to figure out what was going on a couple of blocks down the street from his offices --- oh, I mean the offices he was supposed to be occupying, but instead took the Joe Biden approach and living in his basement in NE MS?
Answer: Hood did diddlysquat. Nothing. At least we have a US Attorney that will find a way to get to these crooks, if for nothing but wire fraud.
Holy Shit! Is there any State agency in Mississippi that isn't corrupt?
MS may just have the biggest hypocrites in the entire country. The good ole Christian politicians are always running a hustle. Most just don't get caught.
11:19- Will never happen. The legislators are part of the problem. They all find a way to benefit from the system. They use their position in the legislature to do outside business they would otherwise never get.
Agree with 2:36. Which state agency isn’t corrupt. It’s depressing and staggering what bad government we pay for.
And the best you can say for Phil is “Maybe he didn’t participate but he’s about like Ulysses S Grant’s presidency. Everyone he appointed was corrupt it so terrible judgement and evidently oversight”.
Piss ass pocket change.....nothing but low hanging fruit. Pickering and White were/are too frightened of opening the true books all the way on the MDE.....billions are being siphoned and squandered.
Pagin Deppity Pheel.
Mississippi needs Deppity Pheel to please report to the trough where some of those on the "FRIENDS AND FAMILY PLAN" done got caught with their snouts in!
@11:19 I'm with you. You take someone's future livelihood and means, that often has more of an effect than jail time. As to the delay, almost all crimes that are expected to go to trial take years. 95% or more of cases get plead out. When it's a white-collar crime it can drag out even longer because they often get pushed to the side when a murder or other violent crime trials come up. This is another unfortunate side effect of the jail break propaganda making non-violent criminals look like they should all just be released. White collar criminals are a drain and harm to society as well and can cause horrible suffering to their victims.
@2:36 The biggest sinners are typically in the pew next to you.
Dam Phil maybe you should have pardon a few folks.
Dam Phil maybe you should have pardon a few folks.
This is another example of why we in Mississippi can't have nice things.
"Pappy O'Daniel will go down as the worst governor in my book".
LOL . . . that was funny !
Some think Governor Musgrove was the worst in recent memory.
(But that's subjective)
I think Ronnie Musgrove meant well. . . but he really was prissy.
Bit I'm getting off track.
Sorry, Kingfish.
"As counsel to Dr. William Walker, we wish to briefly respond to the recent spate of
inaccurate reports regarding the operation of the Mississippi Department of Marine Resources during Dr. Walker's tenure as its Director.
"Dr. Walker cares deeply about the hard working employees and future successes of the DMR. We cannot respond to specifics during an ongoing investigation. However, we are confident that the reports of mismanagement, lack of oversight, or worse, at the DMR are simply wrong. We are equally confident that Dr. Walker's integrity,ability, and longstanding dedication to public service will be fully vindicated."
https://www.gulflive.com/mississippi-press-news/2013/07/inspector_generals_final_audit.html
When Musgrave was governor, I was asked by one of his people if I wanted to be a commissinor for the MWFP. I said sure, and then was told I needed to contribute $30,000. No thank you.
to 3:08....relax baby, in federal court these things move at light speed...they don't get bumped by a stinking farish street murder case. thats what state court is for.
4:19 Phil didn't get it nor does Tater. Life for 2 ounces of weed that will be legal in less than 2 years. What are you going to do then?
Is there any state agency with significant funds that wasn't plundered in some way under Governor Bryant? MDOC, DHS, MDE, MDMR, MBN . . . Can't wait to see what turns up at MDWFP. Maybe they'll final have enough money to turn on the pumps for public land this duck season.
Dig deeper and you'll see far more corruption. Non-profits set up by and employing former MDE staff getting huge allocations of money for doing what MDE should be. They draw their state retirement and then make even more doing "consulting".
Ditto the comment to legislators— we need a law that conviction for corruption will cause forfeiture of PERS!! This would do more to discourage it than anything else.
".....we need a law that conviction for corruption will cause forfeiture of PERS!! This would do more to discourage it than anything else." That is not a bad idea at all, especially while PERS is slowing bleeding to death, and is just about out of oxygen. It would serve the public trust very well indeed.
7:16 - In which alternate universe would the constitution allow the taking of one's honestly and fairly accumulated personal property following conviction of a crime? Think hard...then reply.
They need to look into the dealings of David Hunt with projects at Lane College. Pretty shoddy work. Someone may need to call the President of Lane in Jackson, TN and ask about contracts with them.
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