DALLAS — A federal grand jury has returned a 13-count indictment charging a long-time Dallas County elected official and three of his associates with various alleged felony offenses stemming from their involvement in conspiracies involving bribes, announced Sarah R. Saldaña, U.S. Attorney for the Northern District of Texas; Diego Rodriguez, Special Agent in Charge, FBI Dallas; and Kelly Carpenter, Assistant Special Agent in Charge, Dallas IRS Criminal Investigation.
The indictment, returned on Wednesday of this week and unsealed this morning, charges John Wiley Price, 64, Kathy Louise Nealy, 61, Dapheny Elaine Fain, 52, and Christian Lloyd Campbell, 44, with various felony counts of conspiracy, tax violations and false statements.
“The indictment unsealed today alleges that for more than a decade, in a shocking betrayal of public trust, Commissioner Price sold his office on the Dallas County Commissioners Court in exchange for a steady stream of bribes. While the vast majority of public officials are honest and maintain high ethical standards, it is unfortunate that some, as alleged in this indictment, choose to serve themselves,” said U.S. Attorney Saldaña. “I thank the hardworking men and women of the FBI and IRS Criminal Investigation who have spent countless hours, indeed years, investigating this case, dissecting his and others’ alleged schemes. Abuse of the public trust cannot and will not be tolerated.”
“The FBI’s top criminal program priority is investigating allegations of public corruption,” said Special Agent in Charge Rodriguez. “The defendants’ alleged actions were designed for personal financial gain at the expense of their constituents and the federal government. These types of actions constitute a breach of the public’s trust, erode confidence in government, and cost taxpayers money and resources.”
“Today’s indictment is a reminder that public officials and private industry who scheme to defraud the U.S. Government and violate the public’s trust will be brought to justice,” said Assistant Special Agent in Charge Carpenter. “Bribery, mail fraud and tax fraud will not be tolerated. IRS Criminal Investigation will continue to work with the U.S. Attorney’s Office and FBI to investigate corrupt behavior wherever we find it.”
According to the indictment, from January 2001 through June 27, 2011, Commissioner Price allegedly accepted more than $950,000 in cash, cars and land from Kathy Nealy, a Dallas lobbyist, in exchange for using his influence and position on the Commissioners Court to act favorably on behalf of Ms. Nealy’s clients and those of Christian Campbell, another consultant in Dallas. These financial benefits, averaging between $5,000 and $10,000 per month, were never disclosed on the Commissioner’s tax returns or on state-mandated Financial Disclosure Statements that he signed under oath and filed with the County Clerk for public inspection.
Not only did Commissioner Price hide these bribery benefits from the public and the IRS, but he also earned income from other businesses that he kept secret, including a business, Man Male Sales (MMS), operated by Dapheny Fain, his chief of staff. All told, Commissioner Price allegedly took in more than $1.1 million that he did not report, filing false and fraudulent income tax returns for 2007, 2008 and 2009. While Ms. Nealy was paying bribes to Commissioner Price, she actively evaded paying more than $600,000 in income taxes that she admitted owing. The indictment also alleges that Ms. Fain made false statements to special agents with the FBI regarding Commissioner Price’s involvement in MMS.
According to the indictment, Ms. Nealy’s business clients were vendors seeking contracts with Dallas County and businesses pursuing matters on which Commissioner Price voted in Commissioners Court. It alleges that Ms. Nealy arranged meetings, dinners, etc. with Commissioner Price for her corporate clients who had business in front of the Commissioners Court, and many of those meetings occurred during periods when contact with elected officials and other county employees was prohibited because the selection process for bids on county contracts was in progress. Commissioner Price sponsored and advocated Ms. Nealy’s clients’ interests, and he voted on these matters in a matter that benefitted them. In return, the indictment alleges, Ms. Nealy provided Commissioner Price with a stream of benefits, in the form of money, cars, and land, totaling approximately $950,000.
Specifically, Price and Nealy are each charged with one count of conspiracy to commit bribery concerning a local government receiving federal benefits; one count of conspiracy to defraud the IRS, and six counts of deprivation of honest services by mail fraud. In addition, Price is charged with three counts of subscribing to a false and fraudulent U.S. Individual Income Tax Return. Nealy is also charged with one count of attempting to evade or defeat payment of tax. Fain is charged with one count of conspiracy to defraud the IRS and one count of making a false statement. Campbell is charged with one count of conspiracy to commit bribery concerning a local government receiving federal benefits.
An indictment is merely an accusation and a defendant is presumed innocent unless proven guilty in a court of law. However, the penalties upon conviction are: 20 years in federal prison and a $250,000 fine for each count of deprivation of honest services by mail fraud and aiding and abetting; five years in federal prison and a $250,000 fine for each count of conspiracy to commit bribery concerning a local government receiving federal benefits, conspiracy to defraud the IRS, attempting to evade or defeat payment of tax, and making a false statement; and three years in federal prison and a $250,000 fine for subscribing to a false and fraudulent U.S. individual income tax return.
The FBI and IRS-Criminal Investigation are conducting this ongoing investigation. Assistant U.S. Attorneys Walt Junker, Katherine Miller, Jay Dewald and Chad Meacham are prosecuting.