The former executive director of the Mississippi Department of Education and three others have been indicted on charges alleging their involvement in a bid-rigging scheme involving kickbacks and money laundering.
Cerissa Neal, who served in the role with MDE from 2013-2016, is charged with conspiracy, wire fraud, money laundering and bribery. According to U.S. Attorney Mike Hurst, Neal is alleged to have ďconspired with the three named defendants and other conspirators, to defraud the State of Mississippi and the United States by bid-rigging, false quotes, and altered purchase orders, in order to make money and profit by defrauding the Mississippi Department of Education into awarding contracts and purchase orders at inflated prices, directed to conspirators and their businesses.Ē
The three co-conspirators, who each face one count of conspiracy to commit wire fraud and seven counts of wire fraud, have been identified as David B. Hunt, 54, of Jackson, Tennessee, Joseph Kyles, 51, of Memphis, Tennessee, and Lambert Martin, 59, of Memphis, Tennessee. Along with Neal, Kyles faces one county of money laundering & three counts of bribery.
ďThose who defraud the publicís trust will find themselves standing before a court of law to answer for their wrongs.† Public corruption erodes faith in our democracy and decays the very soul of our form of government.† Bringing to justice corrupt public officials has always been and remains a high priority of this office, and a personal mission of mine, and we will continue to pursue corruption wherever it may lead,Ē U.S. Attorney Hurst said.
State Auditor Shad White released the following statement explaining that this case has been under investigation for several years.
ďI applaud the investigative work in this case and that of our federal partners. In 2017, the auditorís office provided information about these defendants to federal authorities, so Iím grateful for the work of those investigators and former Auditor Pickering as well,” White said.
Following the announcement, State Superintendent Dr. Carey Wright noted that the department brought the information to the auditor’s office back in 2017.
“The Mississippi Department of Education (MDE) is pleased to see legal action being taken against the individuals who are alleged to have defrauded the MDE and the State of Mississippi. We reported this suspected activity in October 2017 to the Office of the State Auditor (OSA) when we discovered evidence that a former employee may have violated state procurement laws. At the time of the discovery, we conducted an immediate, internal audit of all business transactions in which the former employee was involved and provided the audit results and all related records to the OSA. We are eager to continue to assist the investigation through to its conclusion,” she said.
A news release from the U.S. Attorneyís Office details how the alleged scheme worked:
“The indictment alleges that Neal, using her position within the Mississippi Department of Education, would split contract requests from one contract into multiple, smaller contracts, in order to avoid threshold amounts that would trigger a formal, competitive bidding process.† Neal would entertain and advocate for a bid for the contract from one of the three conspiratorsí businesses, including The Kyles Company in Memphis, Tennessee (Joseph Kyles), Doc Imaging (also d/b/a as ďHunt ServicesĒ) in Jackson, Tennessee (David Hunt), and Educational Awareness in Memphis, Tennessee (Lambert Martin).† To meet the Department of Education requirement that such an informal bid have at least two competing vendor quotes for comparison, Neal would obtain false and inflated quotes, by herself and from the other conspirators, designed to make the intended conspiratorís business the lower bid, and to guarantee the award of the contract.†
The indictment alleges that conspirators coordinated their submissions to the Department of Education as well as the sharing of the resulting contract payments.† After the Department of Education made payment on the rigged contract to the conspirator-owned business, the winning bidder shared some of the money with conspirators, in return for their assistance in rigging the bid and winning the Department of Education contract.† In this manner, Neal received more than $42,000 directly or indirectly from her conspirators.† Kyles, Hunt, and Martin, through their respective businesses, garnered over $650,000 from the State of Mississippi, including federal funds granted by the U.S. Department of Education to Mississippi.Ē
If convicted, each defendant could serve up to 20 years in prison on each count of conspiracy and wire fraud, and 10 years in prison for each count of money laundering and bribery.
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