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Tennessee Attorney Charged with Conspiracy, Federal Bribery, and Interstate Transportation in aid of Bribery
Indictment Alleges Contract Bid-Rigging Scheme, Kickbacks and Money Laundering
Jackson, Miss. – Errol Harmon, 47, of Memphis, Tennessee, has been charged in a federal indictment with conspiracy, bribery, and interstate transportation in aid of bribery, announced United States Attorney Mike Hurst, Michelle A. Sutphin, Special Agent in Charge of the Federal Bureau of Investigation in Mississippi, Special Agent in Charge Neal Sanchez with the U.S. Department of Education, Office of the Inspector General, and Mississippi State Auditor Shad White.
The indictment, returned by a federal grand jury on August 25, 2020, and unsealed by the federal court on September 9, 2020, alleges that Errol Harmon, a Tennessee attorney, conspired with Cerissa Renfroe Neal, the former Executive Director of the Mississippi Department of Education (“MDOE”), to defraud the State of Mississippi and the United States, along with three Tennessee businessmen, Joseph B. Kyles, David B. Hunt, and Lambert Martin. Neal, Hunt, Kyles, and Martin have all been separately indicted and charged with federal crimes for their roles in the scheme, in which Neal used her position in the Mississippi Department of Education to steer contract awards to Kyles and his co-conspirators’ companies in return for bribery and kickbacks paid to Neal.
According to the indictment, Cerissa Neal was the Executive Director of the Mississippi Department of Education during 2013-2016, when she conspired with Kyles, Harmon and the two other conspirators, to defraud the State of Mississippi and the United States by bid-rigging, false quotes, and altered purchase orders, in order to make money and profit by defrauding the Mississippi Department of Education into awarding contracts and purchase orders at inflated prices, directed to co-conspirators and their businesses.
The indictment alleges that Neal, using her position within the Mississippi Department of Education, would split contract requests from one contract into multiple, smaller contracts, in order to avoid threshold amounts that would trigger a formal, competitive bidding process. Neal would entertain and advocate for a bid for the contract from one of the three conspirators’ businesses, including The Kyles Company in Memphis, Tennessee (Joseph Kyles), Doc Imaging (also d/b/a as “Hunt Services”) in Jackson, Tennessee (David Hunt), and Educational Awareness in Memphis, Tennessee (Lambert Martin). To meet the Department of Education requirement that such an informal bid have at least two competing vendor quotes for comparison, Neal would obtain false and inflated quotes, by herself and from the other co-conspirators, designed to make the intended co-conspirator’s business the lower bid, and to guarantee the award of the contract.
The indictment alleges that conspirators coordinated their submissions to the Department of Education as well as the sharing of the resulting contract payments. After the Department of Education made payment on the rigged contract to the co-conspirator-owned business, the winning bidder shared some of the money with co-conspirators, in return for their assistance in rigging the bid and winning the Department of Education contract. Kyles, Hunt, and Martin, through their respective businesses, garnered over $650,000 from the State of Mississippi, including federal funds granted by the U.S. Department of Education to Mississippi.
As alleged in the indictment, Errol Harmon’s role in the scheme was to receive money from Kyles and convey that money as payments to Neal. In multiple instances, Kyles gave cash or wrote a check to Harmon. On or about the same day, Harmon then wrote a check to Neal for substantially the same sum and caused that check to be delivered to Neal. In this manner, Neal received more than $42,000 directly or indirectly from her co-conspirators.
Harmon will appear for arraignment September 24, 2020, before United States Magistrate Judge Linda Anderson in Jackson at 1:30 p.m. Neal, Hunt, Kyles and Martin have each appeared in court for arraignment earlier in August and September, and were all released on conditions of bond pending trial.
If convicted, Harmon faces maximum penalties of 5 years in prison for the count of conspiracy, 10 years in prison for the count of bribery, and 5 years in prison for the count of interstate transport in aid of bribery. Each count also can merit a fine of up to $250,000.
The case has been assigned to Senior U.S. District Judge David C. Bramlette III for trial.
U.S. Attorney Hurst commended the work of the Special Agents with the FBI’s Jackson Division and with the Office of the Inspector General, United States Department of Education, the Mississippi Auditor’s Office and the Mississippi State Attorney General’s Office, who investigated the case. The case is being prosecuted by Assistant United States Attorney Theodore Cooperstein.
The public is reminded that an indictment is merely a charge and should not be considered as evidence of guilt. Every defendant is presumed innocent until proven guilty in a court of law.
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