In court documents obtained by NBC 5 Investigates Monday, former Dallas County Schools Superintendent Rick Sorrells agreed to plead guilty to a charge of federal wire fraud in the corruption investigation that rocked Dallas County Schools, the school bus agency shut down by voters in November 2017.
In the unsealed documents, Sorrells admits to receiving more than $3 million in bribe and kickback payments in exchange for entering into $70 million in contracts with an unnamed company that provided cameras for DCS school buses. Based on prior reporting by NBC 5 Investigates, the only company that provided cameras to DCS was Force Multiplier Solutions.
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According to the documents, Sorrells waived his rights to indictment by a federal grand jury, agreed to plead guilty to wire fraud and a sentence of up to 10 years in prison.
Sorrells' attorney Cythina Barbare did not immediately respond to a call Monday from NBC 5 Investigates.
Federal prosecutors said bribes and kickbacks paid to Sorrells were funneled through various pass-through companies operated by, Slater Swartwood Sr., and an unnamed law firm. Swartwood Sr. pleaded guilty to federal money laundering conspiracy charges in December.
The payments to Sorrells were obscured, investigators said, through fake agreements, invoices and loan documents tied to Sorrells who then made payments on the loans only to have the money recycled back to him. In some instances, investigators said Sorrells' expenses, such as credit cards and outstanding student loans, were paid off directly by a third party.
In total, the DOJ said, Sorrells received more than $3 million he spent on credit card debt, trips, personal expenses, an apartment in New Orleans, cars and jewelry. In return for those payments, the DOJ said DCS purchased cameras worth millions of dollars, stacks of which remain boxed and unused in a Dallas warehouse, and entered into a $25 million asset purchase/licensing agreement, the sale-leaseback of DCS bus lots first reported on by NBC 5 Investigates.
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In October, an NBC 5 investigation also revealed Sorrells use of the New Orleans apartment for family and friends. The luxury unit was located in a small building next door to an apartment used by the school bus camera company, according to the building’s owner. At the time, Sorrells told NBC 5 Investigates that the camera company’s CEO had nothing to do with him having an apartment in the building.
All of the bribe and kickback transactions, the DOJ said, were concealed from DCS, its board and the taxpayers who funded the school bus agency. "DCS, for its part, made just pennies on the dollar under the agreements that Sorrells, on DCS' behalf, entered into with Company A, leaving the agency in severe debt and teetering on the edge of bankruptcy."
The DOJ said Sorrells' is being charged with one count of honest services wire fraud for accepting kickbacks while depriving the citizens of Dallas County of their right to his honest services in the fulfillment of his employment responsibilities as the superintendent of DCS.
It’s very serious charges he’s pled to, very serious exposure in terms of prison,” said Matt Orwig, former United States Attorney General for the Eastern District of Texas.
“I think now that you have Sorrells’ plea, I’m sure they’ll be working with him a lot, interviewing him a lot, pursuing leads they learn from his cooperation,” Orwig said in an interview with NBC 5 Investigates.
“And then I think they’ll be approaching others …agents knocking on doors, talking to people,” he said.
If found guilty, Sorrells has agreed to imprisonment up to 10 years -- though the statute allows for a sentence of up to 20 years behind bars and a fine of up to $250,000 or twice the monetary loss to the victim.
As a part of his plea, Sorrells is ordered to forfeit any property bought using the payments received from the unnamed company. A list of that property included more than $12,000 in cash, a 2014 Maserati GHI, a 2012 Porsche Cayenne, about $50,000 in jewelry purchased from the Windsor Auction House and a custom made 14K bracelet set with 51 princess cut diamonds weighing 10.53 carats and valued at more than $16,000.
Last fall the future of DCS was put up for a vote in Dallas County after state legislators became frustrated with the agency following a series of reports by NBC 5 Investigates that highlighted safety and financial problems at the 171-year-old agency. Voters decided to shut down the agency, which is now being managed by a dissolution committee through the 2017-2018 school year.
With tens of millions in outstanding debt, the DCS property tax will still be collected from Dallas County taxpayers until the debt is paid off.
People involved with DCS past and present said the size of the bribery scheme in the guilty plea was surprising.
“Astounding and discouraging,” was the reaction of Delna Bryan, President of the National Education Association Dallas Chapter. Her union represents DCS drivers who lost their jobs when voters in November decided to close the bus agency after management and safety scandals.
“They are the victims. Not one of them should hold their heads down when this comes out,” Bryan said. ”It’s discouraging that someone we thought was an exemplary leader is now showing himself not to be credible at all.”
Individual school districts served by DCS are taking over bus service for next school year. Former DCS employees hired by other districts will keep Teacher Retirement System (TRS) credit they had but some jobs will be lost.
Dallas Independent School District Board President Dan Micciche read the court papers Monday. “It is a sad and outrageous breach of the public trust,” Micciche said.
Dallas City Council Member Omar Narvaez was a member of the DCS Board prior to serving on the City Council. Narvaez said Monday that business with the controversial vendor began before he was a DCS Trustee. He provided a statement in response to Sorrells guilty plea.
“During my service on the board I fought for transparency. I am shocked at the level of corruption and disappointed,” Narvaez statement said.
A Dissolution Committee is winding down DCS. Former drivers’ union leader Dale Kaiser is now acting spokesman for the Dissolution Committee.
“This agency has been put quite through a trying time. We had 2,800 employees at one point,” Kaiser said. “When the Dissolution Committee took over, we stopped all the payments to Dr. Sorrells. Any salary payments, any TRS payments, all that was cancelled.”