Dallas City Council Member and President of Force Multiplier Solutions Plead Guilty to Multi-Million Dollar Bribery Conspiracy
For Immediate Release
U.S. Attorney's Office, Northern District of Texas
DALLAS — Dallas City Council Member and Mayor Pro Tem Dwaine Caraway, of Dallas, Texas, and Robert C. Leonard Jr., of New Orleans, Louisiana, appeared in federal court today before Chief U.S. District Judge Barbara M.G. Lynn and pleaded guilty to federal conspiracy charges, announced Erin Nealy Cox, U.S. Attorney of the Northern District of Texas. Council Member Caraway pleaded guilty to one count of conspiracy to commit honest services wire fraud and one count of tax evasion. Robert Leonard pleaded guilty to one count of conspiracy to commit honest services wire fraud.
The law enforcement operation was led by the Federal Bureau of Investigation (FBI) and the Internal Revenue Service Criminal Investigation (IRS-CI).
“The pleas today represent the meticulous and tireless efforts of the Federal Bureau of Investigation, the Internal Revenue Service, and the dedicated prosecutors of our office,” stated U.S. Attorney Nealy Cox. “These cases demonstrate our continued resolve to uncover corruption at the highest levels--the citizens of Dallas deserve honest government.”
“Today's guilty pleas are the results of a sensitive and complex investigation conducted by FBI Dallas' Public Corruption Investigative Team with assistance from the Internal Revenue Service. The conspirators utilized their position of access and financial means to defraud the citizens of Dallas County,” said Eric K. Jackson, Special Agent-in-Charge of the Dallas Division. “The FBI will continue to aggressively investigate any public servant who abuses their official position and access to benefit themselves financially at the taxpayer’s expense. Additionally, those who seek to exploit public servants with financial or material support will be identified and held accountable for their actions.”
“IRS Criminal Investigation uses financial investigative expertise to pursue those individuals who engage in corruption and tax fraud,” said Tamera Cantu, IRS Special Agent in Charge of the Dallas Field Office. “Merging the unique skills of each agency makes a formidable team as we investigate those who violate the public’s trust. Today’s actions underscore that the law applies to everyone, regardless of position or power.”
According to the Plea Agreements and Factual Resumes filed in the cases, Leonard paid and Caraway accepted more than $450,000 in bribe and kickback payments in the form of a phony consulting agreement, luxury suits, fully funded trips, gambling money, repayment of personal debt, checks and cash. Leonard also admitted to paying Rick Sorrells, former Dallas County Schools Superintendent, over $3 million in bribes and kickbacks payments in various forms, including $200,000 toward Sorrells’ credit card and student loan debt through a bank account opened in the name of a nonexistent entity.
In return for the bribe and kickback payments, Caraway promised favorable official actions to further Leonard’s business interests in Dallas. These actions included key votes to promote and continue the school bus stop-arm camera program -- which contracted with Leonard’s company, Force Multiplier Solutions -- and other actions taken to benefit Force Multiplier Solutions.
Both Defendants admitted to efforts undertaken to disguise and conceal the nature of the bribe and kickback payments. Leonard funneled a significant portion of the illicit payments through various pass-through companies created and operated by his business associate, Slater Washburn Swartwood, Sr., of Louisiana. Specifically, Swartwood, acting at Leonard’s direction, funneled and masked payments to Caraway and Sorrells as “consulting fees” or “loans” through his shell company ELF Investments. The co-conspirators originally characterized the payments to Sorrells as “consulting,” but later attempted to recast the payments as a loan. Sorrells provided no legitimate consulting services in exchange for the payments. There were payments made to Caraway in the form of checks that were cashed at pawnshops and liquor stores.
Caraway also admitted that in 2012 through 2014, he evaded and defeated the payment of substantial income tax due and owed to the IRS resulting in a tax loss of $68,906. Specifically, in 2014, Caraway failed to report for income tax purposes $97,000 of bribe and kickback payments he received from Leonard, under the auspice of “consulting fees.” Caraway also offset a portion of bribe and kickback payments he did report as income in prior years via phony business expenses.
The other co-conspirators, Swartwood and Sorrells, pleaded guilty earlier in the year. Swartwood pleaded guilty in February 2018 and Sorrells in April 2018 for their joint role in the conspiracy. Both are currently out on bond. Swartwood’s sentencing is scheduled for August, and Sorrells’ sentencing before U.S. District Judge David C. Godbey has not yet been scheduled.
U.S. Attorney Nealy Cox praised the efforts of the FBI, IRS-CI and the Department of Justice Tax Division. Assistant U.S. Attorneys Andrew Wirmani, Chad Meacham, Joe Magliolo, and Economic Crime & Public Corruption Section Chief Marcus Busch are prosecuting the case.
Updated August 9, 2018