Pair of Contractors Plead Guilty in Ongoing Public Corruption Probe of Bristol Virginia Utilities Authority
ABINGDON, VA—As part of its ongoing probe into corruption at the Bristol Virginia Utilities Authority (BVU), the United States Attorney’s Office for the Western District of Virginia, along with investigative partners at the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation, announced today that a pair of former contractors who supplied BVU with false invoices have pled guilty.
During separate hearings today in District Court, Michael Albert Clark and James Todd Edwards pled guilty to federal crimes associated with their individual roles in schemes to provide fake invoices and pay kickbacks to BVU officials.
Edwards, 45, of Columbia, S.C., waived his right to be indicted today and pled guilty to a one count Information charging him with engaging in a multi-object conspiracy to commit wire fraud, mail fraud, tax fraud and money laundering.
Clark, 63, of Colbert, Ga., also waived his right to be indicted and pled guilty today to one count of engaging in a conspiracy to defraud the Internal Revenue Service.
According to evidence presented at today’s hearing by Assistant United States Attorney Zachary Lee, Edwards was the CEO of Edwards Telecommunications Inc. (ETI), a privately held corporation that worked as a contractor for BVU. In early 2006, Edwards, and Robert James Kelley Jr., then Vice President of Field Operations for BVU, embarked on a scheme to defraud BVU when Kelley Jr. requested that Edwards begin making kickback payments.
On or about and between January 2006 and February 2009, Edwards caused a number of false invoices to be submitted to Kelley Jr. for work not actually completed by ETI. Kelley Jr., approved these false invoices for payment knowing they contained false information. Kelley Jr. did this in order to receive kickback payments from Edwards. Edwards paid Kelley Jr. at least $160,000 in kickbacks. In addition, Edwards paid $40,000 in kickbacks to David Copeland, another former VP of Field Operations for BVU.
At sentencing, Edwards faces a maximum possible penalty of up to five years in prison and/or a fine of up to $250,000
Evidence presented in court today also showed that Clark, who performed contract work for BVU from January 2000 to March 2015, submitted false invoices to Kelley Jr. for work not actually completed. Specifically, Clark submitted invoices in regards to his consulting business, R&M Consulting. These false invoices resulted in at least $110,065 in fraudulent billing by Clark to the BVU. Kelley Jr. approved these invoices knowing that the invoices contained false information. He approved these invoices because he was being paid kickbacks by Clark.
In addition, Kelley Jr. prepared false invoices that he sent to Clark that falsely claimed that he had done consulting work for Clark through Kelley Jr.’s company, RJK Consulting. Both Kelley Jr. and Clark knew these invoices were fraudulent and that Kelley Jr. had not done any work for Clark. Clark wrote checks to Kelley Jr. in the amount of $106,025 in order to pay kickbacks to Kelley Jr.
Clark filed tax returns with the IRS for tax years 2006, 2007, 2008 and 2009 and falsely claimed and deducted the payments to Kelley Jr. as business expenses with the intention of defrauding the IRS.
At sentencing, Clark faces a maximum possible penalty of up to five years in prison and/or a fine of up to $250,000.
The investigation of the case was conducted by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Zachary Lee will prosecute the case for the United States.