NOLA Contractor to Plead Guilty in Kickback Scheme

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NOLA Contractor to Plead Guilty in Kickback Scheme

Accused of taking more money than he deserved while doing post-Katrina work with a city agency, a New Orleans contractor is expected to plead guilty this week. Meanwhile, an as-of-yet unknown city official who accepted kickback money has not been charged.

A project undertaken by the scandal-plagued NOAH. Credit: Karen Gadbois

As expected, a one-time New Orleans contractor facing federal charges in a kickback scheme is cooperating with investigators and is set to plead guilty next week, according to his attorney and U.S. Attorney Jim Letten’s office.

Earl Myers, who ran Myers & Sons and Excel Development contracting services, stands accused of collecting more money than he earned from a city agency — the New Orleans Affordable Homeownership Program — for post-Katrina remediation work during the mayoralty of Ray Nagin, and then returning some of the money to the city official who doled out the work, according to government court filings.

Myers is “cooperating with the government somewhat, and that is the most I can tell you,” his attorney, Richard Moore, said this morning. “He is a nice guy and I hope he catches a break.”

Myers initially pleaded not guilty to theft of federal funds because the program was financed through money from the U.S. Housing and Urban Development Department. Court documents show, and Letten’s office confirmed, that a hearing to allow him to change his plea to guilty is scheduled for April 26 before U.S. District Court Judge Nannette Jolivette Brown.

“I think he is not the only one cooperating,” Moore added.

Contractor Trellis Smith, who ran Parish-Dubuclet Services, also faces charges in the same manner as Myers. Three others were also charged in the scheme.

Myers and Smith were charged in March by federal prosecutors through bills of information, rather than a grand-jury indictment, generally a sign that the accused is cooperating with the government.

The charging document for Myers said he took part in the scheme because he feared losing the city work if he didn’t conspire with “City Official A,” whom the documents say was the executive director of the program.

Stacey Jackson held that position during the time in question; Jackson has not been charged.

Myers is accused of accepting checks from NOAH for more work than he performed, then funneling some of the overage back to City Official A and keeping some of the extra money. Myers’ companies earned more than $500,000 from the program, and he kicked back more than $7,000, court documents allege.

The court filing also says Myers renovated property owned by City Official A and was paid for the work with city money.

Three others accused in the scheme, Shantrice Dial, Jamon Dial and Richard Hall, are set to go to trial May 29. Trellis Smith’s trial is set for June 4.

Though many thought the program was shut down years ago, NOAH continued to quietly operate until recently.

Karen Gadbois, a founder of the investigative news blog (and Next American City partner) The Lens, worked with investigative reporter Lee Zurik, now with the local FOX affiliate, to uncover the story in the aftermath of Katrina. Their 50-part series exposing the scandal won some of journalism’s highest honors, including a Peabody Award, a duPont Award and a Gold Medal from Investigative Reporters and Editors .

Tags: governancenew orleanshudhurricane katrinacorruption

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