JACKSON, Miss. (WJTV) – U.S. Attorney Mike Hurst announced four people, including the former executive director of the Mississippi Department of Education (MDE), have been charged in a federal indictment with conspiracy, wire fraud, money laundering and bribery.
The suspects are Cerissa Renfroe Neal, 45, of Madison County, David B. Hunt, 54, of Jackson, Tennessee, Joseph Kyles, 51, of Memphis, Tennessee, and Lambert Martin, 59, of Memphis, Tennessee.
The indictment charges Neal, the former exec. director of MDE, along with her co-defendants Kyles, Hunt, and Martin, with one count of conspiracy to commit wire fraud and seven counts of wire fraud. The indictment also charges Neal and Kyles with one count of money laundering. Neal and Kyles are each also charged with three counts of bribery.
According to the indictment, Neal was the Executive Director of MDE during 2013-2016, when she conspired 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 MDE into awarding contracts and purchase orders at inflated prices, directed to conspirators and their businesses.
The indictment alleges that Neal 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 conspirators’ businesses, including The Kyles Company in Memphis, Tennessee (Joseph Kyles), Doc Imaging (also d/b/a as “Hunt Services”) 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 conspirator’s 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 contract.
Prosecutors said Neal received more than $42,000 directly or indirectly from her conspirators. Kyles, Hunt, and Martin, through their respective businesses, received over $650,000 from the State of Mississippi, including federal funds granted by the U.S. Department of Education to Mississippi.
Hunt, Kyles and Martin will appear for arraignment September 10, 2020, before United States Magistrate Judge F. Keith Ball in Jackson at 2:30 p.m. Neal appeared in court for her arraignment on August 19, 2020, and was released on conditions of bond pending trial.
If convicted, each defendant faces maximum penalties of 20 years in prison for each count charged for conspiracy and wire fraud, and 10 years in prison for each count of money laundering and bribery. Each count also can merit a fine of up to $250,000.
State Auditor Shad White and Dr. Carey Wright, State Superintendent of Education, released statements about the indictments.
I applaud the investigative work in this case and that of our federal partners. In 2017, the auditor’s office provided information about these defendants to federal authorities, so I’m grateful for the work of those investigators and former Auditor Pickering as well.State Auditor Shad White
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.Dr. Carey Wright, State Superintendent of Education