Prince George’s County Developer Daniel Colton Sentenced to Prison in Extortion Scheme
Last of 17 Defendants to be Sentenced in Broad Extortion Scheme That Arose from a Pay-to-Play Culture in Prince George’s County
|U.S. Attorney’s Office May 13, 2014|
GREENBELT, MD—U.S. District Judge Peter J. Messitte sentenced Prince George’s developer Daniel Ira Colton, age 64, a resident of Annapolis, Maryland, and Raleigh, North Carolina, today to two years in prison followed by three years of supervised release for conspiracy to commit extortion and to make false statements to the Federal Election Commission. Judge Messitte also entered an order that Colton pay a $50,000 fine.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service-Criminal Investigation, Washington, D.C. Field Office.
According to court documents, in early 2006, FBI and IRS-CI agents began investigating allegations of corruption, campaign finance violations, and tax fraud related to several real estate developers in Maryland and their relationships with Prince George’s County officials. The investigation uncovered a far-reaching corruption scheme centered around a “pay‑to‑play” culture in the county, orchestrated by then County Executive Jack Johnson and other public officials, in which real estate developers, including Colton, and business owners provided things of value to public officials and their surrogates in return for official acts.
Colton was a prominent developer in Prince George’s County. Colton and other co-conspirators, including developer Patrick Ricker and retired Prince George’s County Fire Department official Karl Granzow, had an ownership interest in Greenbelt Metropark, which sought to design, develop, and build a mixed-use project near the Greenbelt Metro Station called Greenbelt Station. Colton, Ricker, and their co-conspirators also had an interest in Day Homes, which was incorporated to construct single family homes in Maryland and was involved in several development projects in the county.
According to Colton’s guilty plea and court documents, from 1997 through at least September 11, 2008, Colton, Ricker, Granzow, and other business persons offered money, trip expenses, meals, drinks, hotel rooms, airline tickets, rounds of golf, employment, mortgage payments, and monetary and in-kind campaign contributions to state and local government officials, including former director of Prince George’s County Department of Housing and Community Development James Edward Johnson. During much of the conspiracy, from 2001 through 2004, Colton was serving a 38-month federal sentence arising from his convictions in federal court in Greenbelt for conspiracy and bank fraud, related to several development projects in Maryland and a loss to the victim bank of $15 million to $20 million.
In exchange for the bribes, state and local officials performed and agreed to perform favorable official actions for Colton, Ricker, Granzow, and other developers, business owners, and their companies, including obtaining approval letters for the Greenbelt Station Detailed Site Plan; assisting in the acquisition of surplus property and land from the county for development by Day Homes; providing the conspirators with non-public county information; obtaining necessary state and local approvals and permits for Greenbelt Station and other developments and businesses in the county; voting in favor of legislation favorable to their development projects; and ensuring that a certain developer would obtain a contract to purchase certain buildings for the county.
State and local officials concealed items they received from Colton and his co-conspirators by failing to report them or by misrepresenting their nature and value. Further, Colton and his co-conspirators concealed campaign contributions to the state and local officials that were above state and federal legal limits by using conduits and in-kind contributions. Specifically, Colton and his co-conspirators recruited “straw donors,” including family members and employees, to make state and federal campaign contributions with funds provided by or reimbursed by Colton and his co-conspirators. Colton and his co-conspirators also provided in-kind contributions to conceal the actual amount of their campaign contributions, such as campaign signs, food, alcohol, and the administrative services of their employees and family members.
During the scheme, Colton, Ricker, Granzow, and others conspired to provide between $400,000 and $1 million in bribes to public officials in return for official action. Colton pleaded guilty under seal to the charges on September 13, 2010.
James Edward Johnson, age 69, of Temple Hills, Maryland, pleaded guilty to conspiring to commit extortion and was sentenced on April 16, 2012, to 37 months in prison. Judge Messitte also entered an order requiring James Johnson to pay a fine of $25,000 and to forfeit $46,300 that was seized from his safe deposit box.
Patrick Q. Ricker, age 55, of Bowie, Maryland, pleaded guilty on December 30, 2009, to conspiring to commit honest services fraud and to make false statements to the Federal Election Commission and to tax evasion. His plea was also entered under seal and was unsealed on May 17, 2011. Judge Messitte sentenced Ricker on November 16, 2012, to one year and a day in prison and also entered an order that Ricker pay restitution of $250,000.
Karl Granzow, age 49, of Upper Marlboro, Maryland, previously pleaded guilty to conspiring to commit extortion and cause false statements to be filed with the Federal Election Commission and to income tax evasion. Judge Messitte sentenced Granzow on October 3, 2012, to 18 months in prison and entered an order that Granzow pay a fine of $10,000 and forfeit his financial interest in Greenbelt Metropark.
A total of 17 defendants have been convicted in the related investigations of corruption in Prince George’s County, including Jack Johnson, then county executive and former state’s attorney; Leslie Johnson, an elected county councilwoman and Jack Johnson’s wife; Mirza Hussain Baig, a physician and developer in the county; Amrik Singh Melhi, an owner of numerous businesses in the county; and Ravinder Melhi, an owner of numerous businesses in the county. These individuals also pleaded guilty to extortion, bribery, state and federal campaign finance violations, and fraud, which all evolved from the pay-to-play culture in the county. They have been sentenced to up to 87 months in prison (Jack Johnson).
United States Attorney Rod J. Rosenstein praised the FBI and IRS-CI for their work in the investigation and thanked the Prince George’s County Police Department for its assistance. Mr. Rosenstein thanked Assistant United States Attorneys James A. Crowell, IV, A. David Copperthite, and Sujit Raman, who prosecuted these cases.