4 more arrested in post-Hurricane Michael cleanup contract corruption investigation

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Trees block roads in Florida following Hurricane Michael. Credit: Florida National Guard
Trees block roads in Florida following Hurricane Michael. Credit: Florida National Guard
Illustration provided by Bay County Sheriff’s OfficeIllustration provided by Bay County Sheriff’s Office

An investigation into corruption in Bay County, Florida, related to cleanup contracts following Hurricane Michael led to three arrests and one pending arrest June 23, including a former Panama City official accused of bid tampering.

The charges come after five were arrested in November for an alleged $5 million scam in the city of Lynn Haven involving fraudulent invoices, some of which were filed by the city for reimbursement from the Federal Emergency Management Agency. Those charged in that federal case include a former city manager and former city employee. Three of the five arrested have pleaded guilty to the federal charges via plea agreements.

The charges in both cases stem from contracts with Erosion Control Specialists (ECS) for debris cleanup after Hurricane Michael left widespread damage in October 2018.

ECS was hired by Lynn Haven to remove debris and garbage from roads and culverts, according to the Bay County Sheriff’s Office. ECS subcontracted work with these businesses: Tri-State Climate Solutions LLC, Greg Wilson Law LLC, Morin and Sons LLC, and Russell Endeavors LLC.

The Sheriff’s Office said that in the course of a larger investigation, which also included investigators from the FBI and the U.S. Attorney’s Office, it was discovered that the ECS subcontractors had not paid a total of $817,851 in workers’ compensation premiums. They also did not pay Social Security and federal income taxes, the Sheriff’s Office says.

It was also found that Keith Baker had rigged a demolition bid in favor of ECS when he was Panama City’s leisure services director, according to the Sheriff’s Office. Through text messages investigators obtained, Baker arranged for ECS to send in three bids to Panama City for the demolition job in April 2018 and also got ECS to lower all three bids after they were submitted. The low bid from ECS came in at $14,750, an amount that allowed Baker to approve the contract without city commission approval.

“Approximately seven months after this demo job was awarded to ECS, Keith Baker left his position with the City of Panama City and was almost immediately hired by ECS to do ‘trash pick-up’ in and around the City of Lynn Haven,” a sheriff’s news release says. “Over the course of his new job, Baker was paid approximately $150,000 by ECS for about five to six weeks of work. Baker now faces charges of bid tampering and official misconduct.”

Soon after Baker’s arrest June 23, he resigned from his seat as a Bay County commissioner. He is listed as the owner of Tri-State Climate Solutions, one of the firms ECS subcontracted with.

The 54-year-old is also charged with workers’ compensation fraud, which is a second-degree felony.

Other ECS subcontractors charged June 23 with workers’ compensation fraud:

  • Gregory Wilson, 48, of Panama City, owner of Greg Wilson Law.
  • Dennis Morin, 56, of Fountain, owner of Morin and Sons.
  • John David Russell, 31, of Eclectic, Alabama, owner of Russell Endeavors. (Russell’s charge is pending as of June 23.)

 

$5 million scam

On November 20, U.S. Attorney Lawrence Keefe announced a 35-count indictment for a $5 million fraud conspiracy involving Lynn Haven officials and ECS’s owner. The following were charged with conspiring to commit wire fraud, substantive counts of wire fraud, and conspiracy to commit money laundering:

  • Former Lynn Haven City Manager Michael Edward White, 46. Also charged with substantive counts of theft concerning programs receiving federal funds, honest services fraud and filing false claims to FEMA. He has since pleaded guilty to attempt and conspiracy to commit mail fraud and three counts of fraud by wire, radio or television.
  • David Mitchelle White, 38, ECS owner. Also charged with filing false claims to FEMA. He has since pleaded guilty to attempt and conspiracy to commit mail fraud; two counts of fraud by wire, radio or television; and false or fraudulent claims. (No relation to Michael White.)
  • Former Lynn Haven Community Services Director David Wayne Horton, 55. Also charged with substantive counts of theft concerning programs receiving federal funds, honest services fraud and mail fraud concerning the defrauding of an insurance company.
  • Shannon Delores Rodriguez, also known as Shannon Delores Harris, 37, an ECS employee. She has since pleaded guilty to attempt and conspiracy to commit mail fraud and fraud by wire, radio or television.
  • Joshua Daniel Anderson, 43, owner of Greenleaf Lawn Care of Bay County.

According to the indictment, Michael White, then Lynn Haven city manager, was given emergency powers after Hurricane Michael. He then contracted with ECS for cleanup work that would be submitted to FEMA for reimbursement.

ECS and Greenleaf submitted fraudulent invoices that the city manager ordered to be immediately paid, according to the U.S. Attorney’s Office. Horton also approved payments and employee time sheets that were submitted with the invoices to go to FEMA. David White also provided false time sheets along with Rodriguez that included ECS employees who were not at the worksites. Anderson submitted false invoices for Green Leaf Lawn Care, the Attorney’s Office says.

After the emergency declaration for Lynn Haven was lifted two weeks later, the city manager and community services director provided other projects for ECS and Green Leaf Lawn Care, such as trash pickup and lawn maintenance, that resulted in more false invoices.