Jackson Jambalaya

 U.S. District Judge Tom Lee sentenced Memphis community activist Joseph Kyles to four months of house arrest for his role in a bid-rigging scheme at the Mississippi Department of Education.  

A federal grand jury indicted former Mississippi Department of Education Director Cerissa Neal, Joseph Kyles, David  Hunt, and Lambert Martin for a bid-rigging and kickback scheme in 2020.  

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.  

Kyles pleaded guilty to one count of engaging in monetary transaction with funds gained from unlawful activity  in July 2023.  The Justice Department dismissed the indictment against Hunt and Martin.  Neal awaits trial and is represented by Dennis Sweet, III.  

The docket states: 

Sentencing held on 11/25/2024 for Joseph B. Kyles (2), Count(s) 9, Three years probation with special condition of 4-month home confinement, partial fine of $1000 and $100 special assessment.

Neal awaits trial.  

Kingfish note: JJ covered the indictments on  September 3, 2020: 

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 Kyles.   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.

Cerissa Neal: wire fraud, bribery, bribery involving federal programs, conspiracy to commit wire fraud and bank fraud. (Counts 1-9, 13-15)
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.

 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. 

   JJ reported in 2016   that Superintendent Dr. Carey Wright's friends got over $600,000 in sweetheart contracts.