Federal Bureau of Investigation

Lawsuit Alleges Racketeering in Downfall of Dallas County Schools

The list of defendants includes the former head of DCS and Dallas Mayor Pro Tem Dwaine Caraway

The committee picked to shut down Dallas County Schools has filed a lawsuit against the people and companies it says led to the bus agency's demise, alleging they "collectively conspired to create an illegal enterprise in exchange for favorable treatment."

The long list of defendants include Rick Sorrells, once head of DCS; Bob Leonard, owner of a surveillance camera company that received millions of dollars from the agency; and Dallas Mayor Pro Tem Dwaine Caraway, who had an outside business relationship with someone who has since pleaded guilty to a federal charge of money laundering.

The "fraud perpetuated" by all of the defendants cost taxpayers more than $125 million, and doomed the school bus agency, with voters electing last year to shut it down – a process that will be completed this week.

The millions of dollars spent to put surveillance cameras on DCS buses, and the sale of taxpayer-owned bus lots in exchange for fast cash, were all part of a racketeering conspiracy, the civil lawsuit alleges.

"It is our belief that that was the situation…," said Stephanie Curtis, an attorney for the DCS dissolution committee.

"…It was a conspiracy of a number of defendants and individuals that involved bribes, kickbacks, real estate fees and commissions paid," Curtis said.

The goal of the lawsuit is to recoup as much money as possible to pay off DCS' crushing debts, which will go on long after DCS buses are parceled out to area school districts.

"I'm hopeful that we will get some money back. How much? I don't have any idea," said Alan King, chief executive officer of the committee that is shutting DCS down.

"The amount of money that they've lost is just staggering. It really is," King said.

Caraway, the second most powerful official in city government, could not be reached for comment, with someone in his office saying he was traveling.

In January, he told NBC 5 Investigates he accepted money from Slater Swartwood Sr. in exchange for real estate advice, and that he also received a loan from him for a family member.

Swartwood has since pleaded guilty to money laundering, and faces time in federal prison, after admitting he funneled millions of dollars in bribes to Sorrells, who at the time was superintendent of DCS.

In his earlier interview with NBC 5, Caraway said he was not aware of any bribes and that the money he received from Swartwood had nothing to do with DCS.

At the time, he was among other members of the Dallas City Council that voted to keep the DCS camera program alive.

Swartwood was also a close associate of Leonard, owner of the Louisiana camera company.

Leonard has not been charged with a crime, but his business and home were raided early in an ongoing FBI investigation of DCS’ camera purchases.

In a past interview, he told NBC 5 Investigates he had done nothing wrong.

Instead, he said, he blamed the ill-fated camera deals on poor management by Sorrells and other DCS leaders.

In a years-long investigation by NBC 5 Investigates, Sorrells repeatedly insisted the camera deals would turn into a great bonanza for DCS.

In 2014, he told us: "Please come back in three years and we'll sit here and we'll have this discussion, except we'll be saying, 'Rick, you were right…'"

However, in April, Sorrells acknowledged he was wrong.

He pleaded guilty in federal court to wire fraud and admitted he received more than $3 million in bribes and kickbacks.

And, like Swartwood, he faces time in federal prison.

Lawyers for Swartwood, Sorrells and Leonard did not respond to calls for a comment.

Former DCS president Larry Duncan is also named as a defendant in the civil lawsuit. His attorney told NBC 5 Investigates he has not seen the suit and could not comment.

Contact Us