U.S. Attorney's Office for the Eastern District of Louisiana issued the following announcement on March 1.
U.S. Attorney Peter G. Strasser announced that DAVID HANSON, age 61, from Abita Springs, Louisiana, and CLIFFORD “SKIP” KEEN, age 50, from Covington, Louisiana, pleaded guilty Wednesday, February 27, 2019 before United States District Judge Ivan L.R. Lemelle to conspiracy to commit honest services wire fraud and soliciting a bribe, in violation of 18 U.S.C. '' 371, 1343, 1346, and 666(a)(1)(B), for their roles in the privatization of a work release program in Slidell, Louisiana that operated between 2013 and 2016.
According to court documents, HANSON and KEEN, each of whom worked most recently as Captains with the St. Tammany Parish Sheriff’s Office (STPSO) discussed with the then-Sheriff (“Public Official 1”) about becoming owners of a work release program in Slidell, Louisiana that Public Official 1 decided to privatize. The Sheriff of STPSO had authority, among other things, to enter into certain contracts binding STPSO, including professional service contracts, unilaterally. Because STPSO rules prohibited employees from “participating in a transaction in which he has a personal substantial economic interest of which he may be reasonably expected to know involving the governmental entity,” HANSON and KEEN would have had to resign from STPSO—thereby losing their salaries and future pension increases—if they wanted to assume ownership and control of the Slidell work release program. HANSON, KEEN, and Public Official 1 discussed ways to allow HANSON and KEEN to maintain their employment and still profit from the Slidell work release program. Ultimately, HANSON, KEEN, and Public Official 1 agreed to make KEEN’s adult son (Person 1) and HANSON’s adult daughter (Person 2) owners of the Slidell work release program.
HANSON, KEEN, and Public Official 1 agreed that they needed to find another individual actually to operate the Slidell work release program because Person 1 and Person 2 lacked sufficient education, training, experience, or funding. They decided on Person 3, to whom HANSON presented a series of conditions, including the following: Person 1 and Person 2 would each own forty-five (45) percent of the Slidell work release program and would each receive forty-five (45) percent of the profits, while Person 3 would own ten (10) percent, receive ten (10) percent of the profits, and receive a salary; and Person 3 would be responsible for the daily operations of the Slidell work release program. Person 3 was also responsible for providing the capital necessary to initiate the program. On about May 1, 2013, Person 1, Person 2, and Person 3 entered into an operating agreement that created St. Tammany Workforce Solutions, LLC, in which Person 1 and Person 2 each had a forty-five percent ownership interest and Person 3 had only a ten percent ownership interest.
On June 4, 2013, Public Official 1 entered into a cooperative endeavor agreement (“privatization agreement”) on behalf of STPSO with St. Tammany Workforce Solutions, LLC to operate the Slidell work release program. Although Person 1 and Person 2 acted effectively as passive members and did not participate substantially in the operation, oversight, or administration of the Slidell work release program, Person 3 was required to pay Person 1 and Person 2 salaries in addition to their ownership disbursements. Person 3 was also directed to pay Person 4, who was Public Official 1’s relative and an employee at STPSO, approximately $30,000 per year for a no-show job at the Slidell work release program.
During the time St. Tammany Workforce Solutions, LLC operated the Slidell work release program, Person 1 and Person 2 received not less than $1,195,000 from St. Tammany Workforce Solutions, LLC in the form of ownership disbursements, salary payments, and occasional lump sum miscellaneous payments. Person 1 received no fewer than 145 payments totaling over $550,000, and Person 2 received no fewer than 131 payments totaling over $600,000. Person 1 and Person 2 converted the majority of the money they received from St. Tammany Workforce Solutions, LLC to cash. At the request of KEEN and HANSON, Persons 1 and 2 then transferred a significant portion of the funds back to their fathers.
Additionally, HANSON, KEEN, and Public Official 1 understood that Public Official 1 would receive financial compensation from them in exchange for bestowing the right to operate the Slidell work release program on St. Tammany Workforce Solutions, LLC. HANSON and KEEN each gave Public Official 1 a portion of the payments they received from St. Tammany Workforce Solutions LLC, through Person 1 and Person 2, in cash payoffs in amounts greater than $1,000 on a recurring basis in exchange for Public Official 1 bestowing the right to operate the Slidell work release program on St. Tammany Workforce Solutions LLC. HANSON also arranged for Public Official 1’s son to receive a check in the amount of $4,000 because Public Official 1 gave the contract to operate the Slidell work release program to St. Tammany Workforce Solutions, LLC. HANSON, KEEN, Public Official 1, and others attempted to conceal the scheme by, among other things, not including in the privatization agreement the fact that Public Official 1 would receive financial compensation in exchange for bestowing the right to operate the Slidell work release program on St. Tammany Workforce Solutions LLC, communicating by cellular telephone, and providing most of the money to Public Official 1 in the form of cash.
Original source can be found here.