Sewage and Water Board Director Indicted on Federal Corruption Charges; Two Others Plead Guilty
|U.S. Attorney’s Office December 11, 2009|
BENJAMIN L. EDWARDS, SR., age 55, a member of the Board of Directors of the Sewerage and Water Board of New Orleans, was indicted today by a federal grand jury on thirty-three (33) counts, including charges of conspiracy to commit wire fraud and extortion, wire fraud, money laundering, extortion, and tax evasion, announced Jim Letten, United States Attorney for the Eastern District of Louisiana; David W. Welker, Special Agent in Charge, Federal Bureau of Investigation; and Michael J. DePalma, Special Agent in Charge, Criminal Investigation Division, Internal Revenue Service.
Also, court documents were unsealed today revealing the recent guilty pleas of two individuals involved in the same investigation. The defendant’s brother, BRUCE L. EDWARDS, SR., age 50, recently entered a guilty plea to a two-count bill of information for wire fraud and tax evasion. OLIVER C. COLEMAN, age 54, recently entered a guilty plea to a one-count bill of information for misprision of a felony (Wire Fraud).
BENJAMIN L. EDWARDS, SR. was indicted on one (1) count of conspiracy to commit wire fraud and extortion (Count 1); fourteen (14) counts of wire fraud (Counts 2-15); one (1) count of conspiracy to commit money laundering (Count 16); twelve (12) counts of money laundering (Counts 17-28); two (2) counts of extortion (Counts 29-30); and three (3) counts of tax evasion (Counts 31-33).
The charges arise out of BENJAMIN L. EDWARDS, SR.’s position as a member of the Board of Directors of the Sewerage and Water Board of New Orleans (S&WB) and his position with the Third Shiloh Missionary Baptist Church. EDWARDS has been an unpaid member of the S&WB since 1989.
The indictment alleges that EDWARDS used his position and influence in defrauding and/or extorting companies that do work for the S&WB. The indictment states that as far back as 1999, EDWARDS would instruct companies to contribute “donations”or “scholarships” to the church, and that EDWARDS demanded more than $750,000 in payments from JLJ Construction and nearly $100,000 from Montgomery Watson Harza (MWH), a company chosen by the S&WB as the Project Manager on the Sewer System Evaluation and Rehabilitation Program, among other contracts. The indictment also charges that JLJ Construction Company was forced by EDWARDS to pay his brother, Bruce L. Edwards, Sr. nearly $100,000 through Prosperity Investments even though no work was provided to assist JLJ Construction.
The indictment further alleges that in the aftermath of Hurricane Katrina, EDWARDS and his brother devised a scheme to defraud by directing that MWH hire Management Construction Consultant Inspection, LLC (MCCI) to perform post-Katrina work such as sewer and water inspections. EDWARDS and his brother are charged with placing the names of sham persons onto incorporation paperwork as well as on a Disadvantaged Business Enterprise (DBE) application for the company named MCCI to disguise the fact that his brother, Bruce L. Edwards, Sr. controlled the company. EDWARDS is alleged to have participated directly in the negotiations of the contract between MWH and MCCI. MCCI then received nearly $3,000,000 worth of contracts from MWH between September 26, 2005 and February 15, 2006. It also states that after MCCI would be paid by MWH, Bruce L. Edwards would then write out checks to EDWARDS’ Third Shiloh Missionary Baptist Church account, totaling more than $1,600,000.
EDWARDS is alleged to have committed Money Laundering by routing the money from that church account back to his brother, as well as to purchase vehicles, fund political campaigns, and to purchase other items of value for himself and others.
The indictment further alleges that EDWARDS routed the money through the tax-exempt church in order to evade more than $2,000,000 in income taxes.
The indictment alleges that in 2008, EDWARDS provided an MWH employee with the business card of an additional unnamed company that he wanted hired to do work for the S&WB; and that EDWARDS repeatedly asked the MWH employee the status of providing work to that particular company. The company was eventually hired by MWH and given more than $2,250,000 in contracts. The indictment states that the company then hired Bruce L. Edwards, Sr. and paid him approximately $12,000 per month. Bruce L. Edwards, Sr. then paid some of that money back to EDWARDS.
BRUCE EDWARDS GUILTY PLEA
In a related matter, on December 2, 2009, Bruce L. Edwards, Sr. entered a guilty plea to a two (2) count Bill of Information charging him with one count of wire fraud and one count of federal income tax evasion. In Count 1, BRUCE L. EDWARDS, SR. stands convicted of participating in a scheme along with his brother to commit wire by demanding and accepting money and property from companies doing business with the S&WB; and by directing companies doing business with the S&WB to hire as subcontractors, companies which concealed BRUCE EDWARDS’ controlling interests; and of using non-profit entities such as Third Shiloh Missionary Baptist Church and Third Shiloh Housing to funnel money to themselves and others. He has also pled guilty to federal income tax evasion by intentionally failing to make an income tax return for calendar year 2005 to avoid the payment of some $247,781 in taxes owed. Defendant BRUCE L. EDWARDS, SR. faces a possible maximum statutory sentence of up to twenty (20) years' imprisonment on the fraud count, and up to five (5) years' imprisonment on the income tax evasion count.
OLIVER C. COLEMAN GUILTY PLEA
On December 4, 2009, OLIVER C. COLEMAN, pled guilty to one count of misprision of a felony, by intentionally concealing his knowledge of the charged fraud and extortion scheme carried out by two other individuals (family members). Coleman faces a possible maximum statutory sentence of up to five (5) years' imprisonment and a $250,000 fine.
The indictment of BENJAMIN L. EDWARDS, SR. consists of:
- Count 1: conspiracy to commit wire fraud
Penalty: five (5) years' maximum imprisonment.
- Counts 2 - 15: wire fraud
Penalty: twenty (20) years' maximum imprisonment per count.
- Count 16: conspiracy to commit money laundering
Penalty: ten (10) years' maximum imprisonment.
- Counts 17 - 28: money laundering
Penalty: ten (10) years; maximum imprisonment per count.
- Counts 29 - 30: extortion
Penalty: twenty (20) years' maximum imprisonment per count.
- Counts 31 - 33: income tax evasion
Penalty: five (5) years' maximum imprisonment per count.
U.S. Attorney Letten reiterated that today’s indictment is a charge, and that the guilt of each defendant must be proven beyond a reasonable doubt.
New Orleans Division of the Federal Bureau of Investigation Assistant Special Agent in Charge Howard Schwartz stated: “Today’s announcements demonstrate once again, the FBI’s commitment in fighting public corruption. For this city to move forward, small business owners must be able to compete on a level playing field. The FBI, along with the United States Attorney’s Office and the IRS will continue to work tirelessly to ensure that this happens.”
Michael J. De Palma, Special Agent in Charge of Internal Revenue Service Criminal Investigation stated: "Tax evasion and money laundering are not victimless crimes. IRS-Criminal Investigation remains united with our law enforcement partners to disrupt those who commit crimes against our local citizens. Special Agents of IRS Criminal Investigation are expert financial investigators who "follow the money" and will continue to work tirelessly to ferret out individuals who take advantage of their public service position to enrich themselves."
Speaking to today’s indictment, U.S. Attorney Letten stated: “Today’s indictment and guilty pleas should serve as continuing, compelling reminders that we and our federal partners will wield the power of our federal criminal laws to fiercely protect the money, property, and rights of our citizens—and their institutions—from theft, corruption and self-dealing. We believe that by doing so, we are helping to restore efficiency of the institutions in the City of New Orleans and the state, as well as the public’s trust in those institutions which exist to serve them.”
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorneys Jon Maestri, Matthew Coman, and Matthew Chester.