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First in a series: Investigating the $6.3 million theft

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Early on in the Floyd County Police Department’s RICO investigation, before the millions of dollars in thefts from Floyd County Schools had been discovered, Assistant Police Chief Mark Wallace and Maj. Jeff Jones paid a visit to a suspect’s home for an interview, they said.

Wallace admits at that time he still believed the investigation was a case of improper spending, as they were looking for a few $50 or $100 items detailed in the school system’s invoices. As they came up to the house, they noticed a pair of muck boots outside the door. They were an item listed on one of the invoices.

They would go on to spot a cooler, also named in an invoice, in the garage of the home. This indicated to the investigators that a theft did indeed occur, Jones said. But what they didn’t know then, Wallace said, was that they were actually looking for $100,000 items.

And almost three years later, with $6.3 million linked to the alleged decades-long scheme of inflating and falsifying invoices that Floyd County Schools paid for, the biggest investigation Wallace, Jones and the department itself have ever had on their plates has ended.

Last week, Wallace and Jones delivered the 3,000-page case summary to District Attorney Leigh Patterson — the entire case file is over 10,000 pages, Jones said.

They worked hours and hours on end without breaking, flew thousands of miles and drove thousands more, prolonged meals and lost time with their families. They conducted over 250 interviews and reviewed a total of 476 years worth of bank account and credit card data.

But more than anything, Wallace and Jones delved into the plan of a man who took the maintenance director job for Floyd County Schools with the sole intent to commit this theft, they said. It’s the story of how Derry Richardson became consumed by greed, taken over by the “on top of the world” feeling that came with the money and power, Jones said.

“What was amazing to us was how Derry was able to manipulate the school system itself and the people themselves,” said Jones, adding that of the $6.3 million proved to be stolen, $4.7 million of it went to Richardson alone.

An Achilles heel

With any case, investigators have to jump on the leads as quick as possible, Jones said. But when the RICO case started, Jones had recently ruptured his Achilles tendon while executing a search warrant for another case, putting him out of work.

The injury led to complications when he got a blood clot in his lungs from a pulmonary embolism. He would go on to have four surgeries throughout the RICO investigation, and said he feels fortunate to be here.

It’s depressing to be stuck at home when he knew there was work to be done, Jones said. He tried to not let his medical issues hinder the initial progress of the case, but it did in a sense, he said. He worked from home before being put on light duty and, eventually, making it back after recovery.

All about the money

“You’ve got to track that money,” said Jones, referring to one of the most time-consuming tasks of the investigation — putting the financials together.

In scouring the bank records, especially considering money laundering was a part of the scheme, Jones said they needed to be able to trace the flow of money from one bank to the next to the next — some of the companies implicated in the thefts had multiple bank accounts under the same business name.

They needed to show how the money would flow through the bank to be put toward property purchases, as well as analyzing the accounts to find where the stolen money went and what it purchased, Jones said. To this last point, it was essential to show what was purchased so it could be seized and then auctioned off to return funds to the school system.

There have been some cooperating defendants, but investigators still had to take their testimony and corroborate it with evidence, Jones said. This became a behemoth of a task.

The Washington trip

On the night of Sept. 11, 2016, Wallace and Jones boarded a flight for Washington in Atlanta. The plane was taxiing out to the runway and was in line to take off when it had to return to the gate due to mechanical problems.

“I was just wondering if the trip was going to be snakebit,” said Wallace.

They transferred planes and flew out, arriving in Seattle late that night to only start working at 4:30 a.m. the next morning. They had no time to waste, knowing that any delay in the three-day trip would only add more expenses to an investigation that would go on to rack up $429,920.94 when all was said and done.

Washington state troopers had been surveilling the man Wallace and Jones had been wanting to talk to in the lead-up to their arrival, wanting to make sure he was in town to talk. They had even done surveillance the morning after their arrival. They had been in contact with FBI fraud investigators as well. Wallace did not provide the man’s name but said he was a former employee of Johnson Controls Inc. and he has cooperated in the case.

There was also another person they needed to interview, and they needed to conduct the interviews at the same time to make sure they couldn’t tip the other off that they were there, Jones said. They needed to catch them away from their homes, he continued.

The interviews lasted for hours, a common theme across the entire investigation, with some of them taking up to eight hours. Neither investigator ate anything until 8 p.m. that first night, and they would go on to work 50 hours in three days.

“It was not a vacation by no stretch of the imagination,” Wallace said.