United States Attorney James T. Jacks
Northern District of Texas

FRIDAY, MARCH 2, 2010
http://www.usdoj.gov/usao/txn/

FIRST DEFENDANT TO PLEAD GUILTY IN DALLAS CITY HALL
CORRUPTION CASE IS SENTENCED

DALLAS — Today, U.S. District Judge Barbara M.G. Lynn sentenced Allen J. McGill, 67, of Dallas, to 24 months in federal prison, following his guilty plea in April 2008 to one count of conspiracy to commit extortion. McGill, is the former president and vice chairman of the Black State Employees Association of Texas (BSEAT CDC). In addition, he was ordered to pay $112,500 restitution jointly and severally. Judge Lynn ordered that he surrender to the Bureau of Prisons on May 25, 2010.

McGill and co-defendant Darren L. Reagan were officers of BSEAT and BSEAT CDC. Reagan was the chairman and chief executive officer. According to plea documents filed in the case, McGill admitted that he conspired with Reagan and former Mayor Pro Tem Don Hill, who represented District 5 on the Dallas City Council to commit extortion.

Following a three-month trial that resulted in 23 guilty verdicts in October 2009, a jury convicted Hill and his co-defendants for running a bribery and extortion scheme in which thousands of dollars in bribes were paid by co-defendants Brian L. Potashnik and his wife, Cheryl L. Potashnik, owners of Southwest Housing Development Company, Inc., through sham business contracts to the defendants. Evidence was presented that Hill and Lee were involved in corrupt solicitation from developers in an effort to gain financial benefit. Brian and Cheryl Potashnik pleaded guilty prior to trial; Brian Potashnik pleaded guilty to one count of conspiracy to commit bribery concerning a local government receiving federal benefits and Cheryl Potashnik pleaded guilty to one count of bribery concerning a state government receiving federal benefits

When developers James R. “Bill” Fisher and Brian Potashnik needed local and state approval to construct multi-family affordable housing developments in South Dallas, using federal tax credits and tax exempt bonds, Reagan and McGill, seeing an opportunity to further their own financial interests, decided to use BSEAT to profit personally from the developments. Reagan met with Hill, who agreed to direct affordable housing developers to BSEAT. The developer would then need to get BSEAT’s approval, which was contingent on the developer agreeing to terms financially beneficial to Reagan and McGill, and ultimately beneficial to Hill, before Hill would agree to support the project before the Dallas City Council. When the developers failed to pay the extorted amounts, their projects were not approved.

McGill is the eighth defendant to be sentenced in this corruption case. Other defendants sentenced to date are:

Don Hill was sentenced to 18 years in prison, and ordered to pay $112,500 in restitution. He must surrender to the Bureau of Prisons by April 27, 2010.

Sheila Farrington, Hill’s wife, was sentenced to nine years in prison. She must surrender to the Bureau of Prisons by April 27, 2010.

D’Angelo Lee was sentenced to 14 years in prison and ordered to pay $112,500 in restitution. Lee is presently in federal custody.

Rickey Robertson was sentenced to three years in prison. He must surrender to the Bureau of Prisons by April 27, 2010.

Darren L. Reagan was sentenced to 14 years in prison. He must surrender to the Bureau of Prisons by April 27, 2010

Kevin J. Dean was sentenced to two years in prison. He must also repay $25,000 in extortion money received. He must surrender to the Bureau of Prisons by June 8, 2010.

John J. Lewis was sentenced to one year and one day in prison, to be followed by eight months of home confinement. He must also repay $25,000 in extortion money he received. He must surrender to the Bureau of Prisons by June 8, 2010.

On April 27, 2010, former State Representative Terri Hodge, will be sentenced by Judge Lynn. Hodge pleaded guilty to fraud and false statements on an income tax return.

On May 7, 2010, Judge Lynn is scheduled to sentence Brian Potashnik, Cheryl Potashnik and Jibreel A. Rashad, a/k/a Vernon Cooks.

A trial date has not been set for the charges pending against defendant Ronald W. Slovacek. The government has filed a motion requesting that some of the counts be dismissed and indicating its intention to proceed to trial on only three counts: one count of conspiracy to commit bribery concerning a local government receiving federal benefits; one count of bribery concerning a local government receiving federal benefits; and one count of conspiracy to commit money laundering. Also, a sentencing date has not yet been set for defendant Andrea L. Spencer, who pleaded guilty in April 2008 to one count of conspiracy to commit bribery concerning a local government receiving local benefits. It is expected that she will testify for the government at Slovacek’s trial.

The case was investigated by the FBI and IRS-CI and prosecuted by Criminal Chief Assistant U.S. Attorney Chad Meacham, Deputy Criminal Chief Assistant U.S. Attorney Sarah Saldaña, and Assistant U.S. Attorneys Chris Stokes, Stephen Fahey and Leigha Simonton.

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