Photographs by Andy Shupe
Oren Paris III (left) heads to federal court Wednesday in Fayetteville to be sentenced for his part in a kickback scheme involving the college he headed.
Thursday, September 13, 2018
FAYETTEVILLE -- Former Ecclesia College President Oren Paris III received a three-year prison sentence Wednesday for a kickback scheme the prosecutor and judge equated to a "dance with the devil."
Paris entered the scam with then-state Sen.-elect Jon Woods of Springdale and businessman Randell Shelton Jr., he said near the end of the sentencing hearing.
Woods would steer state General Improvement Fund grants to the private Christian college in Springdale. In return, Paris hired Shelton as a consultant and paid fees to his firm, Paradigm Strategic Consulting. Much of those fees were passed by Shelton to Woods and to then-state Rep. Micah Neal, also of Springdale, as kickbacks.
The scheme was hatched over a meal at Neal's Cafe in Springdale after Woods' election in 2012 as a state senator, Paris told U.S. District Judge Timothy L. Brooks. That meeting was the first time Paris met Shelton, he said.
The grants came in 2013 and 2014. Woods was sentenced last week to 18 years, four months in prison. Shelton received a sentence of six years. Neal, who pleaded guilty in 2017, appears before Brooks at 9 a.m. today.
"I stand before you humiliated and humbled," Paris told Brooks before the judge pronounced sentence. "My poor choices have brought hurt, pain and challenges to many people. The Bible says a good name is to be prized before great riches. I've failed.
"I should have stopped this, but I did not," Paris said. "I knew what we were doing, and I am ashamed I did not."
The judge said he received 107 letters asking for leniency for Paris. Five witnesses spoke on Paris' behalf earlier in the hearing, and a crowd of 60 people, including his immediate family, attended the hearing in the federal courthouse in Fayetteville.
Paris apologized to the judge, his family and the public in a 15-minute statement. Brooks told Paris he believed his remorse was sincere and said it was clear from the witnesses, the letters and the court's records Paris led an exemplary life before this crime.
Still, the crime was too serious and Paris' willingness to admit it came too late to avoid time in prison, the judge said.
"When you dance with the devil, you are going to get burned," U.S. Attorney Duane "Dak" Kees said earlier in the hearing.
Brooks also imposed $621,500 in restitution, but ordered no forfeiture as he did with Woods and Shelton. He also added three years of probation upon Paris' release from prison.
Paris knew he was doing wrong long before he was charged in March, 2017, Brooks said. Yet is was April, 4, 2018 -- less than a week before his trial -- before Paris pleaded guilty to one count of conspiracy to commit fraud. He resigned as president and a board member of the college his father founded the day before pleading guilty.
Even after his plea, Paris' statements to prosecutors held back on his guilt and responsibility, Brooks said.
Paris' guilty plea is conditional. He retained appeal rights and could get his sentence revoked or a new trial ordered by the 8th Circuit Court of Appeals.
One basis of that appeal is the decision by the former chief investigator in the case, FBI special agent Bob Cessario, to wipe the hard drive of a laptop computer used to gather and transmit evidence to the defense. Cessario wiped the laptop after discrepancies were found and he was ordered to turn over the computer.
Paris was reluctant to plead guilty because he believes the case should have been dismissed, said Travis Story of Fayetteville, Paris' attorney.
Cessario's actions were turned over to the Office of the Inspector General of the FBI, according to an earlier court hearing. No results of that investigation have been announced.
The witnesses speaking at Wednesday's hearing told of good works by Paris both on a personal level and in charity such as life-saving assistance to children in Third World countries. Paris' character witnesses included his sister, gospel singer Twila Paris Wright.
"I believe with all my heart that Oren's overarching goal in life is to please God," she told the judge. "I also believe that after going through this trying time, he will stay very, very far away form anything that might be unlawful."
Paris faced up to 20 years in federal prison. He wasn't called by the prosecution during the Woods' trial in April and pleaded his Fifth Amendment right against self-incrimination in refusing to testify for the defense.
Woods and Neal not only steered $550,000 in grants to Ecclesia directly, the two encouraged other lawmakers to send Improvement Fund money to the school. In all, Ecclesia College got $715,500 in state Improvement Fund grants from 2013 to early 2015. Woods and Neal are the only two of the 10 lawmakers who steered grants to Ecclesia who were implicated in the kickback scheme.
Paris paid Shelton's consulting company $267,500 out of college money from 2013 to 2015, financial records presented at Shelton's trial show. Payments from Ecclesia comprised 93 percent of all deposits to Paradigm's account, financial records show. Shelton made a total of $221,455 of either cash withdrawals or direct transfers to Woods or Woods-related bank accounts, according to evidence presented at trial.
At least one payment from Ecclesia went to Paradigm even when the college was having to use a line of credit from its bank to pay its bills, according to court documents.
Friends helping friends
Paris got more than financial help for his school from Woods. The former senator sponsored bills directly benefiting the college and Paris. Woods also tried to get support for an amendment he drafted but failed to introduce -- a plan he pitched to Gov. Asa Hutchinson in 2015 to direct tax revenue from legalized medical marijuana to Ecclesia. It failed to gain Hutchinson's support, according to an email sent by Woods to Paris.
Woods drafted a bill to direct state grants to a shingle recycling business owned in part by himself, Shelton and Paris, according to court documents. He influenced the state Department of Education for a rule change helping Ecclesia as well, according to court documents.
To this day, another $33,000 of Improvement Fund taxpayer money sits in a bank account of the Northwest Economic Development District, which administers the grants. The money was on its way to Ecclesia thanks to a Woods' bill that became law in early 2015. Ecclesia's application for it was held up after a U.S. Attorney's Office subpoena arrived in October 2015 to the development district for financial records on grants to Ecclesia.
Act 417 of 2015 allowed money from the state's General Improvement Fund to go to colleges part of the national "Work Colleges Consortium." Ecclesia is and was the consortium's only member in Arkansas. Later legislation in 2015 earmarked $33,000 for distribution under the act.
Paris also did favors for Woods in return for grant money, court documents say. He agreed on Aug. 5, 2013, to a request by Woods to hire Elizabeth Newlun as his personal assistant, emails and text messages between him and Woods show.
Paris agreed to a salary of $43,000 a year for Newlun with a $7,000 bonus in advance, both the messages and previously introduced college financial records show. The newly created position was never advertised before Newlun was hired for it, Assistant U.S. Attorney Kenneth Elser said in opening statements.
Newlun's son, who served in the Air Force, was killed in action in 2011. He was a close childhood friend of Woods. The position at Ecclesia was just Woods helping out a close friend's mother, defense attorneys said during Woods' trial.
Ecclesia spent $692,500 in state grants from 2013 through 2014 to buy land, according to the U.S. Attorney's Office for the Western District of Arkansas.
Ecclesia either bought or paid off the loans on 48.5 acres in 2013 through 2014 with the taxpayer money. Its grant applications said the land was needed to accommodate the college's growth.
Five acres of Ecclesia's land bought with state grants has since been sold for more than twice as much per acre as the college paid for it, Benton County land records show. It bought 25.5 acres at 4095 Arkansas 112 in November 2013 for $500,000. That averages $19,608 an acre.
The college sold 5.09 acres of the same property in August 2017 for $215,000, land records show. That averages $42,240 an acre. The college was able to sell 20 percent of the land in that tract for 43 percent of the purchase price.
The 20.4 acres Ecclesia still owns of that tract include about 640 feet of frontage along Arkansas 112 that begins about six-tenths of a mile south of the ramp to the recently opened U.S. 412 Northern Bypass, connecting Arkansas 112 to Interstate 49.
Much of Ecclesia's land is classified as tax-exempt, Benton and Washington County land records show. The college owns 36.3 acres in Washington County and 202.2 acres in Benton County, according to land records. Of that 238.5 acres, 214 are exempt from property taxes, land records show.
Howard Brill, a University of Arkansas law professor and former chief justice of the state Supreme Court, has said he believes there's a legal basis for a lawsuit to reclaim the grant money and the state attorney general would be the most appropriate one to file such a suit.
Attorney General Leslie Rutledge said earlier this year in a statement she's considering all options, but no such suit has been filed to date.
"With respect, everything the college put on the grant applications is accurate," Story has said. "The grants were spent for exactly the things the grants were issued for."
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