A summary of the investigation into a local RICO case paints a tangled web of theft from the Floyd County school system dating back to 2005.
The systematic, decade-long swindle that included money laundering resulted in the loss of more than $3 million by the school system, according to the documents.
In some cases, investigators say payments were made for construction materials that were never actually purchased and work that was never performed.
Inflated invoices paid for costly appliances that ended up in Derry Richardson’s new Summerville home, according to an investigative summary in discovery documents served to the Floyd County Board of Education.
The summary is part of the state’s response to a request for information by Kadima Inc. — a party in the Racketeer Influenced and Corrupt Organizations Act civil case. The Rome News-Tribune received the documents after filing an open records request with the school system.
No charges had been filed in the case as of Thursday, although Floyd County Police Chief Bill Shiflett said arrests are coming.
The theft of both money and property involved a scheme set up by Richardson — the school system’s former maintenance director — with the help of a host of other individuals, according to court documents.
The information below on the investigation, including the possible involvement of Richardson’s relatives, members of the business community and former school system employees, was taken from the legal documents obtained by the newspaper:
10 percent commission
The activity began in 2005 and continued through April 2015.
In 2004, Richardson met Steve Bevill while Richardson was working for Johnson Controls Inc. and Bevill was doing business under the company name SMD Contracting.
Bevill was a subcontractor for JCI on construction contracts the company had with the school system.
Richardson negotiated with JCI to perform work for the school system and would then insist Bevill be hired as a subcontractor.
Bevill submitted fake invoices and received a total of $2.3 million paid to JCI from the school system. Afterward, JCI paid the money to SMD as its subcontractor.
Neither Bevill nor SMD actually performed any of the work or bought any material for the projects.
At the inception of the scheme, Bevill would receive 10 percent of the money and the rest would go to Richardson.
Richardson and Bevill went on to create Bevill Contracting. From September 2010 to April 2015, $1.1 million of stolen funds were transferred from SMD to Bevill Contracting.
Richardson and his brother Dwayne Richardson, another alleged co-conspirator, used a bank account in the name of Summerville Building & Supply — a construction supply company owned by Dwayne Richardson. SBS was a front company.
“In fact it was created and maintained solely to receive and launder the monies stolen from FCBOE and it conducted no legitimate business,” the filing stated.
From Sept. 10, 2010, through April 2015, a total of $678,480.50 was transferred from the Bevill Contracting account to the SBS account.
Richardson also conspired with Mitchell Anderson to steal money from the school system. Anderson was a sales representative for City Electric Inc., which sold electrical appliances to the school system.
Anderson would receive fake purchase orders from Richardson for the school system, but the items, provided by City Electric through Anderson, went to Richardson’s new home in Summerville, including Viking appliances and a Frigidaire refrigerator.
Anderson received a commission. The amount stolen in that scheme totaled $93,000.
Viking appliances, zebra-skin chairs
Richardson’s wife, Lisa Richardson, also conspired to “further the RICO enterprise.”
She received personal property with funds stolen from the school system.
She picked out expensive furnishing for their new Summerville home, Viking appliances, a ceiling fan worth several thousand dollars and “exotic” zebra-skin chairs.
Many of the items were bought using a credit card paid for by Bevill.
She withdrew $11,875 from her bank account and deposited a cashier’s check for the same amount into Summerville Building & Supply’s bank account, then received $20,000 in return.
She and her husband also stayed in New York in a hotel that cost $1,000 a night and her family, including two children and a witness, attended a Broadway show, the witness said.
Richardson also conspired with Harold Bailey to purchase other items for his home through Rom Com Inc., an electrical supply company owned by Bailey.
The theft, which occurred from 2005 through April 2015, totaled $188,517.
Richardson would submit false invoices from the school system for the items and provide additional money for Bailey to keep.
Rom Com disguised the purchases as “computer parts” on invoices. A search of Richardson’s home uncovered several Apple computers identified as being purchased by the school system. Richardson also gave a computer bought by the system to a woman.
Paying off school employees
Richardson also conspired with Russell Burkhalter to steal $250,060 from the school system between 2005 and April 2015.
Burkhalter, under the direction of Richardson, inflated invoices submitted to the school system and paid three maintenance workers, Rod Debois, Keith Brownlow and Greg McCary.
Richardson said Burkhalter would be reimbursed by the inflated invoices and would receive an extra 20 percent for his help.
At the request of Richardson, Burkhalter also paid $10,000 to Kris Hayes, $2,500 to Mitchell Anderson and $6,000 to Chad Watson. Watson and McCary were among the five school system employees who resigned when news of the scandal broke in April 2015.
Burkhalter also performed all of the electrical work at Richardson’s home using supplies from City Electric and paid for by the school system.
Fire rings and inflated bills
Sam Tucker conspired with Richardson to defraud the school system of $50,122 between 2005 and April 2015. Tucker allegedly funneled money back to Richardson through inflated invoices written with Richardson’s instructions and through false purchases.
Tucker, a metal fabricator, installed copper on part of Richardson’s roof, and Richardson listed the $1,800 cost on an invoice from Tucker to the school system.
Tucker also made several fire pit rings that were paid for through invoices sent to the school system. Richardson took two and the others, either three or four, were picked up by unidentified people.
Buying guns and hunting trips
Richardson conspired with Kristopher Hays to steal $182,464 from 2005 to April 2015.
Hays, who was employed by Moriah Services, sold guns to Richardson, who paid for them with inflated invoices sent to the school system. Hays also took Richardson and others on hunting trips and paid for them through work-related invoices sent to the school system.
Richardson conspired with Chad Watson to steal $45,071 from the school system between 2005 and April 2015.
Hays allegedly purchased tires for Watson’s truck with overinflated invoices to the school system. Watson also received money from Hays, Tucker and Russell from inflated invoices.
Coosa Middle School work
Stanley Michael Murray, an owner and operator of Kadima Inc., funneled funds stolen from the school system to Richardson.
Kadima Inc. received a check for $6,200 from the bogus Summerville Building & Supply.
Additionally, Murray wrote a check for $8,000 to Richardson’s father. Murray said he bought a trailer from Derry Richardson. A school maintenance employee said Richardson had agreed to sell him the trailer for much less than $8,000.
Richardson also contracted with Kadima for $94,000 to remove asbestos from Coosa Middle School. Kadima never finished the work and did not have proper permitting. Invoices provided by Kadima for disposal of the asbestos indicate the debris taken to the Grady Landfill was from another project.
Buying land and furnishing the home
Sam Tucker also wrote a check for $28,000 to Jimmy Richardson, Derry Richardson’s father, for the alleged purchase of Bobcat equipment — but records indicate he actually bought the equipment from a local equipment dealer.
About $7,000 of that money he received through inflated invoices. Jimmy Richardson also held property in his name for his son. The younger Richardson bought 33 acres of land and titled it in his father’s name. Jimmy Richardson also acted as a conduit for furnishings for his son’s home. Many of the items purchased by Rom Com and Bailey were shipped to Jimmy Richardson.
Floyd County District Attorney Leigh Patterson declined to comment on the filing Thursday.
When news of the investigation broke in April 2015, Richardson resigned along with Terri Snelling, director of school improvement; McCary, lead maintenance specialist; and Watson, operations coordinator. Samuel Sprewell, chief of operations, retired at the same time. In a previous interview with the Rome News-Tribune, McCary maintained his innocence.
Staff Writer Blake Doss contributed to this report.