It’s been a long time coming.
The investigations and court proceedings in a six year long case involving over $6 million stolen from a local school system are finally over.
On Monday, multiple defendants in the Floyd County Schools RICO investigation took negotiated guilty pleas for their participation in a racketeering conspiracy to defraud the school system.
“After today’s guilty pleas, we have successfully recovered almost all of the $6 million in stolen funds,” Floyd County District Attorney Leigh Patterson said.
The brunt of the sentence fell on the person police identified as the mastermind of the operation.
Floyd County Superior Court Judge Jack Niedrach took the recommendation from the DA’s office and sentenced Derry Richardson to 20 years in prison, followed by 20 years on probation.
“With the recent delays forced on the judicial system by COVID-19, coupled with a certainty of more appeals if the cases continued, we could not reasonably expect to try this case before 2022,” Patterson said, citing an expected massive backlog of cases. “Instead of the case continuing onward and being delayed indefinitely — these pleas provide finality and closure for the community.”
Richardson used his position as maintenance director of the school system to create inflated, and in some cases completely fraudulent, invoices for both construction and maintenance projects. He pleaded guilty to RICO charges at the hearing Monday.
Richardson’s attorney, Amanda Clark Palmer, said her client started cooperating with police early on in the investigation.
“He has a lot of regret for what he did,” Clark Palmer said.
Many of the lighter sentences for Derry Richardson’s co-defendants were a result of him taking full responsibility for his acts, she said.
There’s still a question about how much restitution Richardson will be ordered to pay. Over the next two weeks, Richardson will be going over invoices with investigators to determine how much he is culpable for in this case.
“We’re trying to come to an agreement,” Clark Palmer said.
During that time he will remain at home. On Aug. 10 at 8 a.m., he will report to the jail to begin his sentence.
Dwayne Richardson, Jimmy Richardson, Lisa Richardson, Rodney Holder, Charles Raiden Sherman, Russell Burkhalter, Sam Tucker and Harry Bailey all entered negotiated pleas to RICO-related charges Monday morning. David Fielder earlier pleaded guilty to his part.
“Plea agreements and negotiated sentences are basically a compromise between the state and the defendants,” Niedrach said.
He added that going to trial involves a degree of risk — both to prosecutors and defendants — and if taken to trial there was a likelihood he would have imposed greater sentences on each of the defendants.
“The evidence here is very disturbing,” the judge said. “It’s hard to imagine what $6 million would have meant to the Floyd County Schools, especially during the time of the Great Recession.”
Most of the defendants who pleaded guilty Monday morning were sentenced to either home confinement or probation. Several of them will be required to pay fines or restitution to the county schools.
All of the defendants — except Derry Richardson — were allowed to place their plea under the First Offender Act. That means, essentially, if they successfully complete their sentences their records will be clean.
A hearing for Robert Watson, who had medical difficulties, will be held at a later date. His attorney told the court he intends to plead guilty.
Several of the defendants cooperated with the investigation and through their efforts to assist showed their culpability to be even greater than police originally thought.
This was the case with Harry Bailey who did business with the school system through his business RomCom.
“When I interviewed Mr. Bailey, he admitted to the theft and went back through his invoices and doubled the amount (we suspected had been stolen),” Floyd County police Maj. Jeff Jones said. Jones was the lead investigator alongside FCPD Chief Mark Wallace.
During testimony, Jones told Assistant District Attorney Luke Martin that another, now deceased, codefendant who worked for Richardson would send invoices for items to Bailey to purchase from Amazon. Bailey would make those purchases and then add 10% for RomCom.
Jones: Mr. Bailey didn’t receive anything for himself. Everything went back to the business.
Martin: So, Mr. Bailey provided significant assistance with the investigation?
Jones: Yes, he did.
The charges against Sam Sprewell and David English were dropped by the DA’s office. Sprewell has agreed to present a statement concerning ethics violations and permanently surrender his educational credentials, Patterson said.
“We are pleased with the result for Sam,” said his attorney J.J. Seifert. “The dismissal was the right result under the circumstances.”
English paid back money for work not done and had been victimized by others who used his company to commit crimes, his attorney Brian Steel said. He said English’s company, Southeastern Security Professionals, had been ready and willing to do the work they had been paid for.
“David English has always maintained and will always maintain his complete innocence,” Steel said.
Part of the plea negotiations included a stipulation that all the defendants would withdraw from pending appeals and waive future appeals, ADA Emily Johnson told the court.
Thousands of hours have been spent in the investigation and prosecution of this case.
The Floyd County Police Department became involved in the investigation in October 2014, when the school board relayed information from a concerned citizen about fraudulent purchases involving Derry Richardson.
The school system conducted an audit and noticed a large number of tools were purchased but unaccounted for.
“Invoices were able to give details showing several defendants and codefendants were committing crimes,” Jones said in the hearing.
Jones said they first interviewed Robert Watson, who was able to detail the actions of several others who were later arrested.
The scheme began while Derry Richardson was at Johnson Controls Inc., a company that did various construction work for the school system. He moved over to the school system in the mid-2000s and eventually became maintenance director for the system.
But, Jones said, he continued to use his contact at JCI to conduct the largest thefts.
“He was conducting a scheme on the local level and on a corporate level with JCI,” Jones said.
Looking further into the conspiracy, Jones said they discovered the scheme generally involved subcontractors who would provide an inflated invoice for work done. In other cases, the school system paid for work that was not done at all.
As the school system’s maintenance director, Jones said, Richardson was completely in control of who was hired for subcontracting work.
Then the subcontractors would pay Richardson, who would take the largest cut of the fraudulent profits, Jones said, and then pay them off.
“Derry Richardson was the leader of this entire operation,” Jones testified.
Investigators interviewed over 500 people in connection with the investigation and went over thousands of invoices.
“It was an unbelievable amount of work,” Jones said.
Most of the defendants were arrested in 2016, with others arrested later. The criminal case was stalled while a civil case, which was completed in 2018, went through the process of recouping the stolen funds.
In a settlement that was outside of a civil case involving the thefts, Johnson agreed to pay the Floyd County Board of Education $2.3 million and provide services and equipment for two years. The total value of the settlement was estimated at $2.7 million.
Floyd County School Board Chair Tony Daniel said the board wanted to thank all of the investigators, prosecutors and support staff who worked to build the case over the past few years.
“I’m glad there some closure to this,” Daniel said. “This citizens of Floyd County are ready for this to be done.”
Police and fire department employees in Rome will see raises in their first pay check after Aug. 1. The City Commission approved a new play plan Monday night.
The pay plan will add $238,647 to the police department budget for the remaining five months of the year and $407,966 to the fire department budget.
“The time is now,” said City Manager Sammy Rich.
New city police officers who are hired in without certification will start at $38,000. A new officer who is certified but has no experience will start at $39,000 and newly certified officers with at least one year’s experience will be paid $40,000.
The Rome Police Department has 96 sworn positions with 14 vacancies while the Rome-Floyd County Fire Department has 158 sworn positions and is short four firefighters.
Rich said there would be salary adjustments throughout the pay scales as part of the new pay plan.
“This is one investment we cannot afford not to make,” said Commissioner Craig McDaniel.
“Now we can not only retain the veterans officers that we have, it will encourage them to go out and recruit good quality candidates that we can add to the force,” said Assistant Police Chief Debbie Burnett.
Fire Chief Troy Brock said the increase for firefighters will amount to approximately $6,000 across the board.
“This is going to help us develop the career firefighters,” he said.
Rich said the raise isn’t going to solve all the issues, bit it’s an important piece of the equation.
“I think it’s also an important morale boost when it’s a really tough time to be in public safety,” he said. “Word of mouth is a very good recruitment tool, so if you’ve got folks that are happy in the organization they’re much more like to be able to help recruitment like minded folks.”
Commissioners also approved the 2020 tax levy with no change from last year. The city maintenance and operation rate is set at 8.151 mills, plus 1.935 mills for capital improvements. Those levies are expected to raise about $11.4 million.
The tax rate for the city schools is 17.450 mills, which should raise approximately $19.2 million.
Floyd County families will have two options when school starts next month.
One is the return to in-classroom instruction, the other is a virtual learning system for those who choose to stay at home as the COVID-19 pandemic persists.
“There was a huge pushback on us starting with some kind of a hybrid model,” said Superintendent Jeff Wilson.
Floyd County Board of Education Chairman Tony Daniel said the system sent out a survey to families earlier this month and got more than 6,200 responses — with 80% of them wanting a return to in-person learning at school.
“All board members have been bombarded, with emails, phone calls, texts, everything, about the importance of starting school (in person),” Daniel said. “I think everybody agrees that starting is the best thing long-term for our kids.”
The decision was cemented at a called meeting Monday, with Melinda Jeffers casting the lone dissenting vote against the plan. She said that she, like other board members, believes it is important for children to be back in the classroom. But she felt the system should have something other than what she called an “all or nothing” return to the classroom Aug. 13.
“We really don’t know what we’re going to be looking at. There are so many little details,” Jeffers said. “I’m a former elementary school teacher and I know those details can really cause havoc if they are not thought out totally and completely.”
Parents will have the option of signing up for a virtual learning management program through the first 10 days of August.
Wilson said approximately 5% of the student population across the county has signed up for the virtual learning management system.
“Basically, it is a computer-based instructional program,” Wilson said. “We just do not have the staff to run a full virtual teacher-led program and a full in-person school program.”
The computer curriculum will be set by a certified teacher working with the system on the specific modules that will be offered to students. There will not be direct, face-to-face instruction with a teacher on the computer.
“They will be in that mode for at least nine weeks,” Daniel said. “Then they would have the option to change.”
Wilson said there would be some staff assigned to work with the virtual learning management system but their primary function would be to make sure the technology was working properly.
“We didn’t know what’s going to happen tomorrow. We don’t know what’s going to happen three months from now,” Daniel said “You can’t make policy decisions based on what you don’t know ... Based on all the contact with parents, statistics, articles I’ve read, the long term effects of students not coming to school is more hazardous than coming back to school.”
Daniel said the system will use a $50,000 grant from Floyd Medical Center to help purchase masks for students and staff as well as personal protective equipment for teachers who want it.
“If they need a face shield, or a plastic shield in front of their desk, we’ll do whatever we can to protect our teachers and staff,” Daniel said.
Students will be encouraged to wear masks but will not be mandated to wear a face covering. Students will be provided masks but Daniel said that the board did not feel making it mandatory was the best option.
The next batch of campaign finance reports is due Thursday from the two Republican candidates vying to replace Northwest Georgia’s Congressman Tom Graves.
Marjorie Taylor Greene and Dr. John Cowan have each reported taking in over $1 million so far during their bids to win the nomination. The winner of the Aug. 11 runoff will face Democrat Kevin Van Ausdal in November.
Candidates must file a report with the Federal Election Commission 12 days before every election, in addition to regularly scheduled reports. Their latest regular reports, filed July 15, cover the period between May 21 and June 30.
Greene took in $365,834 during that period — including a $200,000 loan from herself — and ended with a cash balance of $254,885.
Cowan loaned his campaign $100,000 at the same time, bumping his contribution total to $312,005 and his ending balance to $255,878 as of June 30.
Neither balance includes their personal loans, which are on the books as debt to be paid back.
Of the $1,534,400 in total donations to Greene’s campaign, $900,000 came from her. Cowan’s reported $1,011,306 in overall donations includes $200,000 of his own money.
An analysis of the filings by the nonpartisan, nonprofit Center for Responsive Politics shows that 39% of Greene’s funding has come from individual donors compared to 71% for Cowan.
Also, Cowan raised 90% of his funding from sources in Georgia, with 26.2% coming from within the 14th Congressional District. Top zip codes for his donors were in Rome, Dalton, Calhoun, Cartersville and Atlanta.
Greene raised 52% of her funding in state, with 6.1% coming from within the district. Top zip codes for her donors were in Alpharetta, Duluth, Rome, Atlanta and Florida.
The 14th District covers the counties of Floyd, Polk, Chattooga, Gordon, Walker, Catoosa, Dade, Whitfield, Haralson, Murray and Paulding, and part of Pickens County.
Greene won all but Floyd County in the nine-person primary, garnering 40.43% of the vote to Cowan’s 21.01%.
The CRP also took a look at the money that came from political action committees in a report by Ian Karbal posted last week on its website OpenSecrets.org.
Karbal wrote that Cowan outraised Greene this quarter, $62,000 to $12,000, in contributions from PACs. His donors include Republican Leadership PACs, “suggesting broader party support, including in Georgia,” Karbal wrote.
Committees associated with eight congressional Republicans — led by House Minority Whip Steve Scalise, R-La., and including Georgia Reps. Buddy Carter and Austin Scott — all contributed to Cowan’s campaign. Former Arkansas governor Mike Huckabee and Georgia State House Rep. Bert Reeves also contributed to Cowan.
The CRP report also noted that KochPAC, the political action committee of Koch Industries, requested a refund of the $5,000 it had contributed to Greene’s campaign.
The request came after PAC leaders became aware of photos of her posing with known neo-Nazi leader Chester Doles and members of right-wing militia groups, as well as her vocal support for the QAnon conspiracy theory.
“We do not condone such harmful and divisive rhetoric, and we deeply regret our decision to contribute,” said KochPAC communications director David Dziok in an email to CRP’s Karbal.
However, Karbal also listed several conservative fundraising groups that are maintaining support for Greene:
The House Freedom Caucus’ PAC has directed over $70,000 in earmarked contributions to her and made its own $5,000 contribution.
The National Association for Gun Rights and Gun Owners of America, two lobbying groups that have positioned themselves to the right of the National Rifle Association, also contributed $1,000 and $5,000 respectively.