Dallas Mayor Pro Tem Dwaine Caraway Pleads Guilty to Federal Corruption Charges

Dallas Mayor Pro Tem Dwaine Caraway, the second most powerful official at city hall, is headed to federal prison after admitting to receiving nearly $500,000 in bribes and kickbacks tied to the Dallas County Schools scandal.

After months of speculation, and an exclusive interview with NBC 5 Investigates in which he admitted to taking money from a Louisiana businessman, Caraway resigned his position at Dallas City Hall in a letter dated Wednesday and admitted to taking money in exchange for his political influence.

Through a lot of prayer and soul searching, I have decided that I must take responsibility for my actions … I betrayed the public's trust that I worked so very hard to earn.

Dwaine Caraway

US Attorney calls Dwaine Caraway guilty plea a "major victory against public corruption". @NBCDFW pic.twitter.com/pJX13QR1rt

— Scott Friedman (@ScottNBC5) August 9, 2018

Graphic just handed out by US Attorneys office describing Dwaine Caraway criminal conspiracy. News conference begins shortly. @NBCDFW pic.twitter.com/e4HGVRmmsA

— Scott Friedman (@ScottNBC5) August 9, 2018

Erin Nealy Cox, U.S. Attorney for the Northern District, said Thursday that Caraway and Robert Leonard, president, and owner of a camera company that did business with the now-closed Dallas County Schools, both entered guilty pleas for their roles in the scandal.

"Today is a day of both reckoning and reconciliation for the city of Dallas and its citizens. I'm pleased to announce a major victory in the battle against public corruption," Cox said, adding:

No activity to speak of at Dwaine Caraway’s home in Southern Dallas.

All of the blinds are closed. The only vehicle in the driveway is this campaign bus, which the US Attorney’s Office says was paid for with kickbacks from the DCS scandal. #NBCDFWNow pic.twitter.com/sUm2g1PEdh

— Tim Ciesco (@TimCiescoNBC5) August 9, 2018

"This morning, just a short time ago, Chief Judge Barbara Lynn accepted the guilty pleas of city council member and Mayor Pro Tem Dwaine Caraway, and Robert Leonard, president, and owner of Force Multiplier Solutions."

Cox said Caraway pleaded guilty to a criminal conspiracy involving wire fraud and tax evasion. Leonard pleaded guilty to one count of conspiracy involving wire fraud.

"Honest services fraud takes away from a citizen their intangible right to honest representation from their public officials," Cox said. "In this case, Caraway and Leonard, working together, with Sorrells and Swartwood, forms the basis for this conspiracy and it is this conduct that forms the basis for honest services fraud."

During a news conference Thursday, Cox outlined the case against Caraway saying, "Leonard paid him [Caraway] over $450,000 in bribes, kickbacks, and other benefits, in addition, to directly, or indirectly, contributing to his political campaign. Caraway asked for and received money from Leonard on numerous occasions. Leonard would, at times, pay Caraway with checks, which Caraway then negotiated at liquor stores in town."

Cox added that Caraway was also given expense-paid trips to New Orleans, Las Vegas, and Austin, while also being given security cameras for his home and a loan for his father.

Other gifts to Caraway included a campaign bus, casino chips and money to gamble with, and even money to cover funeral expenses for family members, according to the government.

While the positions are nonpartisan, Caraway was the second-highest-ranking Democrat on the Dallas City Council.

According to his plea deal, the "appropriate" punishment for Caraway is one "that does not exceed seven years, or 84 months, imprisonment." As part of his plea deal that was unsealed Thursday, Caraway will be ordered to also pay nearly $69,000 in restitution to the IRS.

Cox said Leonard paid $3 million in bribes and kickbacks to former DCS Superintendent Rick Sorrells, who approved purchase orders, contract agreements, and licensing deals with Leonard's company, Force Multiplier Solutions.

The deals cost taxpayers more than $70 million, the government said.

In April, Sorrells pleaded guilty to wire fraud.

Leonard faces as much as 10 years in federal prison, court documents show.

Earlier this year, Caraway told NBC 5 Investigates he took money from that associate but said at the time it was for legal consulting work and had nothing to do with Dallas County Schools.

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Where is Dwaine Caraway?

Caraway’s absence from Tuesday’s City Council meeting drew questions from at least one council member. Caraway’s office had said he’d become ill during a recent trip with a youth group to Alabama.

But Councilman Kevin Felders, often a critic of the Caraway, suggested a different reason than he was dodging the legal system.

Felders told NBC 5 Investigates that the mayor pro tem had missed several public appearances and wondered if Caraway, instead, was attempting to avoid being served court papers as a defendant in a civil lawsuit.

That litigation was filed by the special committee picked to try and recoup any of the millions of taxpayer dollars lost by DCS in its business dealings with Leonard and his camera company.

Caraway is among the people listed as defendants in the court case.

Following Caraway's resignation, the city of Dallas plans to order a special election for Nov. 6 to fill his empty seat. The filing period for the race, which will begin after the city council approves the special election, is expected to end on Aug. 23.

Legislator Lauds 'Victory Against Corruption'

Texas Sen. Don Huffines (R-Dallas), who led the charge in the Texas Legislature last summer to shut down Dallas County Schools, issued the following statement Thursday following Caraway's guilty plea.

"Today, the bright light we shined continues to expose the crooks who thought they could rip-off taxpayers. We struck a big victory against corruption, and my fight for taxpayers, students, and schools will continue," Huffines said. "The tentacles of this corruption run deep, and I would not be surprised to see more guilty pleas or indictments soon.”

Thursday afternoon, Dallas Mayor Mike Rawlings released the following statement.

I learned this morning of Dwaine Caraway’s guilty plea and resignation, and I have not yet reviewed the public details of the case. Therefore, I will not be making any public comments today beyond this statement. As we all now know, the corruption at Dallas County Schools extended beyond the confines of that now shuttered organization. As your mayor, I am saddened by what we learned today about the actions of one of my former colleagues. I am sad for the city, especially the citizens of District 4, and for Mr. Caraway’s friends, family and supporters. Mr. Caraway championed much good in his time in public service, particularly for the youth of our city. I appreciate that he is admitting his crimes and sparing the city what could have been a drawn out legal battle. More than 12,000 people work for the City of Dallas. Almost every one of them serves honorably and ethically -- and never make the news. This city is so much bigger than any one politician who lost his way.

NBC 5's Ken Kalthoff, Tim Ciesco and Brian Roth contributed to this report.