Skip to main content
Press Release

Harris County, Texas, Commissioner Pleads Guilty to Making a False Statement to FBI; Real Estate Developer Pleads Guilty to False Tax Statement

For Immediate Release
Office of Public Affairs
Real Estate Developer Also Pleads Guilty to Making False Statement in Separate Case

WASHINGTON – Harris County Commissioner Gerald R. Eversole and Houston-based real estate developer Michael D. Surface both pleaded guilty today in federal court in Houston to making false statements, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, Special-Agent-In-Charge (SAC) Stephen L. Morris of the FBI’s Houston Field Office and SAC Rodney E. Clarke of the Internal Revenue Service-Criminal Investigation (IRS-CI) Houston Field Office.


Eversole pleaded guilty to lying to the FBI by falsely denying that he had received items of value from Surface, including $63,000 provided to Eversole to help purchase a new home, and $16,975 provided to Eversole in the form of landscaping expenses on that home.


Surface pleaded guilty to claiming a false tax deduction for the landscaping expenses at Eversole’s home on both his corporate and personal income tax return. U.S. District Judge David Hittner accepted both pleas and set a sentencing date of Jan. 4, 2012.


In a separate case, Surface pleaded guilty to making a false statement to the FBI about his relationship with a former city of Houston official. In that case, Surface pleaded guilty to lying about whether he had provided things of value to Monique McGilbra, the former head of the city’s Building Services Department. U.S. District Judge Lynn Hughes accepted Surface’s plea in this case and set sentencing for Jan. 3, 2011.

“Mr. Eversole lied to the FBI about receiving money and other items of value that Mr. Surface admitted he provided,” said Assistant Attorney General Breuer.  “Mr. Surface, in turn, lied on his tax returns about the money he provided to Mr. Eversole to gain influence, and lied to the FBI about providing things of value to a separate Houston city official.  The public must be able to trust that its elected officials are fulfilling their duties honestly and without influence from individual favor-seekers.  Public officials who are not truthful about the funds they receive must face the consequences of their actions.”   

“The FBI will continue to ensure that our public officials are held to a higher standard,” said FBI SAC Morris.  “Without honesty, there can be no trust in our democracy.”

“Mr. Surface took an income tax deduction for moneys that he paid to influence a public official - a deduction that he was clearly not entitled to,” said IRS-CI SAC Clarke. “ IRS-CI helps ensure that all Americans, including public officials and others are held to the same standard as regular taxpayers. This action today is an important victory for America’s taxpayers who play by the rules and have no tolerance for those who make up their own rules.”


As part of their guilty pleas, Eversole and Surface both admitted that beginning in 1999, Surface sought and obtained at least five lucrative Harris County contracts to build and house county offices and to provide construction maintenance, among others. Both defendants also admitted Eversole repeatedly voted to approve and renew Surface’s projects and used his official position to ensure funding for these contracts. Eversole also repeatedly recommended and voted to appoint Surface as chairman of the board of the Harris County Sports and Convention Corporation, a quasi-governmental organization charged with overseeing Reliant Stadium and Reliant Park.


Eversole and Surface also admitted that in March 2003, Surface gave $63,000 for the purchase and construction of Eversole’s new home. Both defendants also admitted that in April 2004, Surface gave Eversole $16,975 for residential landscaping expenses at Eversole’s new home.


Eversole admitted that, when interviewed in December 2007 by FBI agents and asked about things of value he had received from Surface, he falsely stated that two birthday gifts were the only items he had received from Surface, when in fact he had received the $63,000 and the $16,975, among other things. Surface admitted that he gave Eversole the $63,000 and the $16,975 with the intent to influence Eversole in connection with the county projects Eversole voted to award to Surface. Surface also admitted that in providing the landscaping expenses, he instructed the landscaper to bill Eversole for $10,000 and send the bill for the remaining $16, 975 to one of Surface’s corporations. Surface then caused that corporation to falsely list the payment as a business expense, which caused his own personal income tax return to under-state his taxable income for the 2004 calendar year.


As part of his plea agreement, Eversole agreed to resign from office and agreed not to seek elected or appointed office for a period of 10 years. Surface, who had previously resigned from the Harris County Sports and Convention Corporation, agreed not to seek any federal, state or local contracts for a period of five years.


As part of his plea agreement in the case involving the city of Houston official, Surface admitted that beginning in 1999, McGilbra supervised the administration of a multi-million dollar contract awarded to The Keystone Group Inc., a corporation owned by Surface and Andrew Schatte, his co-defendant in that case. McGilbra also supervised negotiations between Keystone and the city on another planned contract. Surface admitted that he and others provided McGilbra with free drinks and meals while she was responsible for the existing contract, despite a city prohibition against such gifts. Surface also admitted that he and others caused Keystone to hire McGilbra’s boyfriend, Garland Hardeman, as a “consultant” to Keystone, and that Hardeman provided a portion of these consulting fees back to McGilbra. Surface also admitted that he provided a $1,000 gift certificate to McGilbra for a department store, as well as football tickets. Surface admitted that when he was interviewed by FBI agents, he falsely stated that he had provided nothing other than football tickets to McGilbra. McGilbra previously pleaded guilty for her role in the scheme.


Schatte is currently pending trial, and is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.


Eversole faces a maximum penalty of five years in prison and a $250,000 fine. Surface faces a maximum penalty of three years prison and a $100,000 fine on the false tax statement charge and five years in prison and a $250,000 fine on the false statement charge.


This case is being prosecuted by Senior Trial Attorney Mary K. Butler and Trial Attorneys John P. Pearson and Peter Mason of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI and IRS-CI.

Updated September 15, 2014

Press Release Number: 11-1296