A federal grand jury in Fayetteville has issued a 13-count indictment against former state Sen. Jon Woods of Springdale; Oren Paris III, the president of Ecclesia College in Springdale; and their mutual friend, Randell Shelton Jr. of Alma, as a corruption scandal involving kickbacks on state grants widens.
Woods, 39, was charged with 11 counts of honest services wire fraud and one count each of honest services mail fraud and money laundering. Paris, 49, and Shelton, 37, were included in the same count of honest services mail fraud and nine of the honest services wire fraud counts. (This article originally misstated the number of individual charges.)
The charges - which were predicted in a "Whispers" item in Arkansas Business last week - follow a guilty plea, entered Jan. 4, by state Rep. Micah Neal, R-Springdale. Neal, 42, waived indictment and pleaded guilty in federal court in Fayetteville to conspiracy to commit honest services fraud, admitting that he and an unnamed state senator directed hundreds of thousands of dollars from the General Improvement Fund to two nonprofits in exchange for bribes.
Neal, who will be sentenced at a later date, admitting receiving about $38,000 in kickbacks between January 2013 and January 2015, of which $18,000 came what was then an unnamed nonprofit college in Springdale and the remainder from an executive of a company that provided behavioral health services. Those entities were subsequently identified by Arkansas Business and other news organizations as Ecclesia College and Rusty Cranford, former CEO of Alternative Opportunities Inc. of Springfield, Missouri, which did business as Decision Point before being acquired by Preferred Family Healthcare Inc. of Kirksville, Missouri, in May 2015.
The new indictment plows similar ground while continuing to mask the identies of the nonprofits and Cranford, who has not been charged with any crime. It includes many more details than were available when Neal, 42, waived his right to be indicted and instead pleaded guilty to a bare-bones charge filed directly by federal prosecutors.
For instance, the indictment alleges that Paris paid $267,500 to Shelton's company without the knowledge of Ecclesia's board of governance. Ecclesia, which was founded by Paris' late father, paid him more than $300,000 in compensation in the four years between June 1, 2012, and May 31, 2016, but the total paid to him and members of his immediate family and their spouses exceeded $1 million during that time.
Ecclesia also hired an unnamed female employee at Woods' behest, paying her a $4,000 "bonus" up front and a salary of $43,000 a year.
Exactly how much money Woods is alleged to have received in GIF kickbacks is not clear. Shelton received $50,000 from Ecclesia on Sept. 27, 2013, and four days later, $40,000 of that was transferred to Woods' personal bank account, prosecutors allege. The unnamed representative of the other nonprofit "paid Woods an unknown amount of money, but at least several thousands of dollars in cash" starting in October 2013, according to the indictment. Woods then "provided Neal $20,000 in cash," it says.
The indictment also quotes liberally from text messages between Paris and Woods, including what Paris called a "good selling point" when Woods encouraged other legislators to direct GIF money to Ecclesia: the small Christian college "produces graduates that are conservative voters. All state and secular colleges produce vast majority liberal voters." According to the indictment, Woods replied: "Agreed."
Neal faces a maximum sentence is 20 years in prison, but prosecutors have agreed not to seek a sentence outside the recommended guideline, which is likely to be in the range of two and a half to four years.
Neal agreed to cooperate with the government's continuing investigations and to testify before a grand jury or in a trial if asked by prosecutors.
Neal was first elected in 2012 and did not seek re-election in 2016.