Oct 1, 2007 1:31 pm US/Central
16 Indicted In Dallas City Hall Corruption Case
by Jack Fink
DALLAS (CBS 11 News) ―
Federal indictments against 16 people were unsealed Monday as prosecutors unveiled the charges stemming from a federal investigation into alleged wrongdoing at Dallas City Hall.
Two others are charged in separate federal indictments, also released today.
Prosecutors say 16 of those named were involved in a large and sweeping extortion and bribery scheme involving affordable housing. Prosecutors accuse current and former public officials and their associates of extorting developers. The government also alleges that those same developers bribed those public officials.
The main indictment, in the alleged affordable housing scheme, lists 31 counts against the defendants. Prosecutors say the main players in the scheme were former Dallas Mayor Pro Tem Don Hill, Hill's current wife and former political consultant Sheila Farrington, and former Dallas Plan Commission member D'Angelo Lee.
Developer Brian Potashnik, owner of Southwest Housing, is also named in the indictment, as is State Representative Terri Hodge.
The government says the principals in the case took public money that was intended for affordable housing projects and pocketed it for themselves.
"We are not guilty of any of the things they have alleged here," said Hill. "We haven't had the chance to tell the world that we are not guilty… We're just going to prepare for that fight – to prove our innocence."
The investigation is more than two years old. Today federal officials revealed that it involved investigators from the FBI and the IRS.
Federal prosecutors and the FBI defended the lengthy investigation, saying they had to go through hundreds of bank accounts and other documents.
"I think this is an elaborate, multi-layered scheme," said U.S. Attorney Richard Roper. "It's complex. The size of the indictment bears that out."
Prosecutors accuse some of the defendants of "disguising payments to make them look like gifts."
Named in the indictments unsealed today are:
- Former Dallas City Councilman Don Hill
- Hill's wife and former political consultant Sheila Farrington
- Former Dallas City Councilman James Fantroy
- State Representative Terri Hodge
- Former Dallas Plan Commission member D'Angelo Lee
- Darren Reagan, founder of the Black State Employees Association
- Former NFL player Kevin Dean
- Brian Potashnik, owner of Southwest Housing
- Cheryl Potashnik, wife of Brian Potashnik
- Jack Potashnik, father of Brian Potashnik
- Jibreel Rashad
- Allen McGill
- Ricky Robertson
- Andrea Spencer
- Ronald Slovacek
- Kevin Dean
- John Lewis
Prosecutors say the alleged scheme centers on affordable housing projects built by Potashnik's Southwest Housing. The company received federal tax credits to build the apartments. In order to get those credits, developers must have the approval of state and local officials. Prosecutors claim that's where the bribery and extortion came into play.
An additional indictment names former Dallas City Councilman James Fantroy. He's accused of taking federal grant money that was intended for Paul Quinn College, where he was treasurer and member of the board.
Jack Potashnik, father of Brian Potashnik, is also named in an indictment. He worked for his son's company and is accused of income tax evasion.
Darren Reagan is accused of stealing money from the Dallas Housing Authority's Section 8 program.
Among the accusations against Hill is income tax evasion. Prosecutors say he owes about $216,000 in taxes, dating back to 1996.
Several of the defendants are appearing before a federal judge today. Fantroy made his appearance before 12:30 p.m. and had already left the courthouse when CBS 11 News crews arrived shortly after.
Hill and Farrington and Reagan have also appeared before the judge. All pleaded not guilty.
Lee was scheduled to appear before the judge at 2 p.m.
Lee said he believes he will ultimately be exonerated. He also said he's glad the two year investigation is now over.
"[I'm] relived to get an opportunity to tell my story," said Lee. "Let the truth come forth and know that I only have the best interest of Dallas in mind."
If the defendants are convicted on all counts, the penalties are stiff. Hill could be sentenced to 170 years in prison; Lee to 125 years; Farrington to 105 years; Brian and Cheryl Potashnik 130 years each; and Hodge 100 years. Possible penalties for the other defendants are also severe. All also include as much as $3.5 million in fines each.
(© MMVII, CBS Broadcasting Inc. All Rights Reserved.)
