Former Rep. Micah Neal receives three years of probation in kickback scheme

Former Rep. Micah Neal, R-Springdale, was sentenced Thursday (Sept. 13) to three years of probation for his role in a kickback scheme concocted by former Sen. Jon Woods, R-Springdale, and others to steal General Improvement Funds (GIF). Neal was also ordered to pay $200,000 in restitution.

U.S. District Judge Timothy Brooks sentenced Neal on one count of conspiracy to commit honest services fraud after agreeing to testify against Woods, 41, and consultant Randell Shelton Jr., 39, both of whom were sentenced to federal prison last week. Brooks also ordered Neal to spend the first year of probation on house arrest with an electronic monitor and complete 300 hours of community service over the next two years.

On Wednesday (Sept. 12), Oren Paris III, 50, the former president of Ecclesia College in Springdale, was sentenced to three years in federal prison followed by three years of supervised release for his role in the scheme involving the college. Paris also was ordered to pay $621,500 in restitution and surrender to the U.S. Marshals Service on Oct. 10 to begin serving his time.

Last week, Woods was sentenced to 18 years and four months in federal prison for his involvement in a widespread kickback and bribery scheme with Ecclesia College at the center. Woods has until Sept. 19 to appeal his conviction and sentencing. If unsuccessful, he would have to serve at least 85% of the sentence, or 15 years and seven months. Brooks also ordered Woods to pay $1.621 million in restitution, a more than $1 million forfeiture money judgment and a $1,500 special assessment for the 15 counts on which he was found guilty. Woods is required to report to prison by 1 p.m. Sept. 26 and will remain out of jail on his existing bond until then. When released, he’ll have three years of supervised release and must notify his probation officer before opening a bank account. Also last week, Shelton was sentenced to six years in federal prison for his involvement in the scheme.

“The sentences last week and this week in the public corruption scheme involving G.I.F. funds and bribery are the result of years of hard work by the assigned Assistant United States Attorneys working in partnership with the FBI and the IRS Criminal Investigation,” Dak Kees, U.S. Attorney for the Western District of Arkansas, said in a statement following Neal’s sentencing. “It is my sincere hope that these sentences will serve as a deterrence for any individuals who would attempt to corrupt the legislative process in our State in the future.  My office will continue to aggressively pursue public corruption cases and work with our partners in bringing those individuals to justice.”

In early May, a federal grand jury returned a guilty verdict against Woods and Shelton for their involvement in the fraud that used the state’s GIF dollars. Woods was convicted of one count of conspiracy to commit honest services mail and wire fraud in violation of federal law, 12 counts of honest services wire fraud, one count of honest services mail fraud and one count of money laundering. Shelton was convicted of one count of conspiracy to commit honest services mail and wire fraud in violation of federal law, 10 counts of honest services wire fraud and one count of honest services mail fraud.

Kees said Woods and Neal authorized and directed the Northwest Arkansas Economic Development District, which was responsible for disbursing the GIF, to award a total of approximately $600,000 in GIF money to two nonprofit entities. The evidence further showed that Woods and Neal received bribes from officials at two nonprofits, including Paris, who was then president of the private Christian school founded by his mother and father.

Woods had solicited and accepted kickbacks, and Shelton “covered it up by funneling the kickbacks through his consulting company,” said John Cronan, acting assistant attorney general. The FBI, IRS and U.S. Attorney’s Office had investigated the case for three years, and Kees said that it was still under investigation.

Details from the indictment shows Woods initially facilitated $200,000 of GIF money to the college and later, together with Neal, directed another $200,000 to the college, all in exchange for kickbacks. To pay and conceal the kickbacks to Woods and Neal, Paris paid a portion of the GIF to Shelton’s consulting company. Shelton then kept a portion of the money and paid the other portion to Woods and Neal.

Paris also bribed Woods by hiring one of the lawmaker’s friends to an administrative position at the four-year college, whose board of regents includes such well-known evangelical figures as political consultant David Barton, movie star and recording artist Pat Boone, gospel singer Twila Paris and former Ohio congressman Bob McEwen.

Neal pleaded guilty on Jan. 4, 2017, and Paris pleaded guilty April 5. One week later, Ecclesia College officials named Randall Bell as the new president of the school.

The ongoing Ecclesia College investigation has left lawmakers, policymakers and political watchers at the State Capitol speculating what other lawmakers and public officials could be indicted or charged next in the widespread bribery and corruption scandal over GIF funds. A separate, but parallel investigation involving former lobbyist Milton “Rusty” Cranford and Springfield, Mo.-based health nonprofit, Preferred Family Healthcare (PFH), has also entrapped two Democratic lawmakers with more indictments ahead of the upcoming 2019 legislative session.

Just before the Labor Day weekend, a federal grand jury in indicted former Sen. Jeremy Hutchinson, R-Little Rock, for allegedly devising a scheme to steal thousands of dollars in campaign contributions and then falsifying state campaign finance reports and tax filings. The longtime Arkansas lawmaker and Little Rock attorney, who is the son of former U.S. Sen. Tim Hutchinson, R-Ark., and the nephew of Gov. Asa Hutchinson, immediately resigned his senate after his indictment and is expected to appear before U.S. Magistrate Judge Patricia Harris on Sept. 18. His attorney, Tim Dudley, has said the former state senator plans to fight the 12-count charge that includes eight counts of wire fraud and four counts of filing false tax returns.