• :
  • Member Center
  • :
  • Make This Your Home Page
  • :
  • Special Offers
khou.com Web  

STATE NEWS

Comments | Recommended

Three arrested in El Paso fraud case

09:21 PM CDT on Tuesday, October 14, 2008

Associated Press

EL PASO, Texas -- Three former executives of an El Paso charity accused of contract fraud were arrested Tuesday, authorities said, in a probe that has also ensnared local public officials.

FBI agents arrested Robert E. “Bob” Jones, Ernesto Lopez, and Patrick James Woods on various fraud charges alleged in a 37-count indictment issued Thursday. The indictment is sealed.

The three men waived arraignment Tuesday and filed not guilty pleas, said Mary Stillinger, Lopez’s attorney. All were being held on bond Tuesday night.

Stillinger said she had not read the entire indictment but Lopez looked forward to the case moving ahead so he can defend himself.

“We don’t think Pat Woods is guilty of anything,” said Woods’ lawyer, Jim Darnell. Darnell and Jones’ lawyer, Joe Spencer, said they had not seen the indictment and could not comment on the allegations. Both lawyers said their clients had done nothing wrong.

The federal probe of businesses tied to Jones also sparked a continuing investigation into public corruption that has targeted several current and former public officials. Federal investigators won’t detail the connection between the public corruption probe and that of Jones, but have said the raids on public officials’ homes and offices were part of the probe into Jones’ employees.

Several people, including a former El Paso County commissioner and chief of staff to current County Judge Anthony Cobos, have pleaded guilty to corruption charges. According to federal court records, that probe involves 12 separate investigations and has uncovered widespread abuses.

Details of the cases against those who have pled guilty have remained sealed under court order.

Jones is the former head of the National Center for the Employment of the Disabled, a clothing company that was once the primary supplier of chemical-warfare suits for the military. The company, which has since become Ready One Industries, was raided by federal officials in 2006 as part of a probe of the company’s government contracts, which required that at least 75 percent of NCED workers filling government orders be blind or severely disabled.

Two civil oversight groups—the President’s Committee for Purchase from People Who are Blind or Severely Disabled and a Virginia nonprofit that helps administer government contracts— concluded that only about 7 percent of workers were handicapped while Jones ran the company.

Jones, who is charged with all 37 counts, abruptly resigned amid the federal probe and has denied any wrongdoing.

Darnell said Woods left the company sometime in 2007.

Shana Jones, a spokeswoman for the U.S. Attorney’s Office in San Antonio, said Jones, Woods, and Lopez, are accused of lying to the contract overseers about the number of disabled people employed to fill the lucrative government contracts and embezzling or stealing at least $5,000 from the company.

The indictment calls for the men to forfeit tens of millions of dollars.

Shana Jones said prosecutors want Robert Jones to forfeit $58.9 million and Lopez to give up $51.2 million. Prosecutors are asking that Woods forfeit just $4.2 million.

All three men were initially charged in a five-count indictment issued in late September.

Lopez, the former NCED chief operating officer, faces 17 counts of the new indictment. Woods is a former NCED officer and member of the board of directors and faces five counts.

According to federal investigators, the initial contract probe at NCED also revealed numerous financial issues, including management fees of about $14.5 million the company paid to Jones’ family trust from 1999 to 2006.

The NCED contracts were worth more than $834 million.

Inside KHOU.com

News Your Way: Get KHOU.com headlines
delivered to your favorite RSS reader.

Submit your Pics: Upload photos and browse others in our Pics section.

Submit Your Video: Upload your videos and browse others in our video section.

Find Activities: What's happening in your neighborhood? Community Calendar.

Discuss the News: Talk about the latest news, weather and entertainment headlines in our online forums.

Popular Stories