We have still more Beef Plant legal filings for you and these are some of the most informative documents to date concerning what we should expect from the prosecutors when the Moultrie trial starts. In the Government’s response to the defense motion to dismiss we find out a good bit more about which TFG employee will be singing on the stand and what he already told the grand jury:
The United States is not required to allege or prove a quid pro quo to convict Moultrie, Cawood or The Facility Group. But even if it was, Moultrie’s former employee Robin WIlliams’ Grand Jury testimony eviscerates Moultrie’s entire argument about the lack of any quid pro quo.
Robin Williams was a member of the Georgia Legislature while employed as a “consultant” for Robert Moultrie and The Facility Group. Williams attended an April 2, 2003 dinner with the public official, one of the public official’s campaign employees and Robert Moultrie. The dinner took place in Jackson, Mississippi just days before The Facility Group was announced as Project Manager of Mississippi Beef Processors, LLC. After dining with the public official, Moultrie and The Facility Group billed the costs of the dinner with the public official as well as Moultrie’s travel to the dinner back to the State of Mississippi as a business expense.
Concerning the Project Management Agreement and the related fundraiser, Williams offered the Grand Jury the following testimony about a conversation he had with Robert Moultrie:
Grand Juror: You said it (the fundraiser) was already planned. So the
(public official) knew there was going to be a (sic) fundraiser before the
contract was signed?
Robin Williams: I – – this – – here is what I was told that day. On the phone this is what was told. We got the contract. I’ve (Moultrie) got to do a fundraiser for the (public official). I’ve got to raise $100,000 dollars. Now, in that – – the contract to me took that they had done their deal and this is the date. And the date was pretty quickly after phone call. He said we’re going to be in Smyrna at my home. I need you to bring some money.
Documentary evidence proves invitations for the fundraiser for the public official were sent out on July 7, 2003, just days before the contract was signed on July 11, 2003. Less than two weeks later, on July 23, 2003, a fundraiser for the public official was held at Moultrie’s Smyrna, Georgia residence. Moultrie, Cawood and employees of The Facility Group and others raised $25,000 for the public official and Williams provided a check for $25,000 to the Democratic Governors Association.
Then, less than seven days after the fundraiser, The Facility Group created a Political Action Committee, from which it gave two more contributions to the public official in the amounts of $20,000 and $25,000 respectively for a total of $95,000 raised by Moultrie, Cawood and The Facility Group.
Besides learning of one former TFG insider slated to talk before the jury we find out a good bit more about other witnesses including TFG’s former outside independent CPA who audited their books who will be speaking about his work and how TFG overbilled Mississippi Beef Processors:
Dickinson is will testify about The Facility Group’s use of a multiplier and their aggressive accounting procedures to generate profits. Dickinson will testify that his audits revealed there was a breakdown in internal controls within Facility Holdings Corp. and its related entities.
Dickinson will testify that The Facility Group’s multiplier contains a mark up designed to make a profit in addition to recouping labor costs. Dickinson will offer the opinion that pursuant to the terms of the subject Project Management Agreement, The Facility Group was merely allowed to recoup costs, and was forbidden under the contract from incurring or obtaining any profit under the guise of cost.
Dickinson will testify that according to the terms of the Project Management Agreement, insurance was to be billed at cost. He will testify that to charge insurance in an amount far greater than its actual cost was fraudulent under the terms of the contract and that any portion of insurance recouped in excess of the actual cost of insurance was profit to The Facility Group.
Dickinson will testify about his opinion that the Facility Holding Corp. and its subsidiaries had problems substantiating that employees who were charged to projects actually performed work on the projects.
It gets better though because we find out what more about what Bll Purdy will be saying as well as the expected testimony of Sean Carothers:
Messrs. William Purdy and Ralph Germany will testify about general construction law principles and construction contract principles. They will testify regarding the Letter of Intent and Project Management Agreement, to which The Facility Group was a party. They will testify that a review of the contracts at hand reveals that The Facility Group did not include any provision in the subject contracts that memorializes or makes known to the State of Mississippi, Richard Hall, Mississippi Beef Processors, LLC or Community Bank that The facility Group intended to use an alleged multiplier. The will also testify based on the contractual language, The Facility Group was only permitted to bill for actual costs incurred.
Messrs. Germany and Purdy are expected to testify that The Facility Group overbilled the Mississippi Beef Processors project for at least .7 of the 2.0 of the alleged multiplier used by The Facility Group to recoup labor costs. They are also expected to testify that that submitting bills as “costs” that contained profit built in under the disguise of cost constitutes fraud.
Purdy and Germany are also expected to testify that the “inefficiency” factor allegedly contained in the alleged multiplier likewise does not constitute a cost and as such is nonreimbursable.
Messrs. Germany and Purdy will also testify that based on their experience with construction and contractual matters, certain costs billed to the project, such as printers, accounting, data processing, etc, were general overhead expenses and should not have been billed to the project. In addition, they will testify that The Facility Group grossly inflated their costs of insurance and to the specific dollar amounts. This in their opinion also constitutes fraud.
Messrs. Germany and Purdy will also testify that based upon their observations of the records, that it is apparent that The Facility Group billed items from a budget that they produced at the beginning of the project rather than billing actual costs. They will testify also that the schedule of billable hours generated by The Facility Group for the accounting department was fictitious and could not possibly represent actual hours worked. They will testify that the above constitutes fraud.
Mr. Sean Carothers, President of Carothers Construction Company, will testify to the above. In addition, Mr. Carothers, aided and assisted in the creation of a notebook of schedules derived mainly from records obtained from The Facility Group which demonstrates overbilling in labor, insurance, design and accounting. Mr. Carothers will testify as to the origin of the figures containing within the notebook, the rationale for their inclusion, and the totals of the calculated amounts of overbilling.
Finally the prosecution also reveals something those of us who work in the construction industry here in Mississippi already knew. Bill Purdy and his partner know their construction law. As Nowdy observed to me in an email Bill Purdy doesn’t just know the book on construction law in Mississippi, he wrote it.
In addition to the new filings linked about we have the government’s response to team Moultrie’s motion for a higher legal standard for conspiracy evidence. All these can be found on our Moultrie legal page.