Former Arkansas senator, 2 other indictees in state-grant kickbacks plead innocent in U.S. court

Former state Sen. Jon Woods (right) walks to federal court Tuesday in Fayetteville with his attorney, Patrick Benca (far left), and others from the Benca Law Firm of Little Rock.
Former state Sen. Jon Woods (right) walks to federal court Tuesday in Fayetteville with his attorney, Patrick Benca (far left), and others from the Benca Law Firm of Little Rock.

FAYETTEVILLE -- Former state Sen. Jon Woods along with two other men pleaded innocent Tuesday to being co-conspirators in a kickback scheme involving state grants.

Attorneys for each defendant asked for a jury trial and expressed confidence in their clients' innocence.

Woods, Ecclesia College President Oren Paris III and consultant Randell G. Shelton Jr. appeared before U.S. Magistrate Judge Erin L. Wiedemann at 1:30 p.m. Woods was indicted on 12 counts of fraud and one of money laundering. Paris and Shelton were each indicted on 10 counts of fraud. The indictments, regarding transactions from 2013-2015, were issued by a federal grand jury on March 2.

The three defendants are accused of conspiring with then-state Rep. Micah Neal, R-Springdale, to pay Woods and Neal kickbacks in return for obtaining state General Improvement Fund grants for the college. The indictments did not name the college, but they stated that Paris is its president. Ecclesia College in Springdale is the only private, nonprofit college in Springdale to receive improvement fund grants at the request of Woods and Neal, grant records show.

"The charges are baseless," said Shelly Koehler of Fayetteville, who represents Shelton. "We look forward to trial on this matter and Randell will be proven innocent."

Patrick Benca of Little Rock is Woods' attorney, and Travis Story of Fayetteville represents Paris. They also said their clients are innocent and can show it.

Benca said, "We look forward to our day in court."

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The three defendants are set to be tried together. Each was released on bond with a pretrial hearing set for May 3 and the trial set for May 8. Woods and Paris were released on $10,000 bonds. Shelton's bail was set at $5,000. The trial judge in the case is U.S. District Judge Timothy L. Brooks, Wiedemann said.

Neal pleaded guilty to f̶o̶u̶r̶ ̶c̶o̶u̶n̶t̶s̶ one count* of honest services fraud, a public corruption charge, on Jan. 4. Sentencing for him has not been set. Neal has agreed to cooperate with authorities as part of his plea, in which he admitted wrongdoing before any indictment against him was issued. No plea bargain for sentencing was reached in Neal's case. He received $18,000 for his part in obtaining a grant for the college and another $20,000 for obtaining a grant to another nonprofit, according to his guilty plea.

If convicted, the defendants could face up to 20 years in prison for the fraud counts and 10 years on the money laundering count, plus fines and forfeiture of any money or property obtained through their actions.

Kenneth Elser, the U.S. attorney prosecuting the case, said after the hearing that any such forfeiture would not affect property bought by the college with the grants obtained, only money or property that ended up personally benefiting the accused.

Woods, Paris and Shelton all surrendered their passports in ' Tuesday's proceedings, a routine requirement for those awaiting trial in federal court. Paris' passport expired in 2013, he said, but was still turned over. Woods and Shelton also surrendered their state concealed-carry weapon permits. All three had some restrictions placed on their travel, requiring them to notify authorities if they leave the area. Special permission was obtained for Woods to make trips to his attorney, whose office is in Little Rock.

More than a half-million documents are part of this case file, Benca said while seeking Woods' permission to travel to the law firm's offices. Those documents will have to be reviewed and his client consulted, he said.

The three defendants were told not to converse among themselves or with other witnesses or potential victims in the case. Limited exceptions were made for Paris and Shelton, who are business partners, to discuss business affairs.

The men are partners in Shingle Resource Recycling, secretary of state business records show.

Paris also received permission to talk to employees at Ecclesia who might be called as witnesses in the case, but only to discuss college business. Wiedemann warned him not to discuss the case with college employees.

Woods' indictment includes three counts related to another nonprofit, a workforce training program that returned its $400,000 grant. Grant records show the only workforce training program to receive and then return $400,000 was a Bentonville company called AmeriWorks. The company did business out of the Springdale offices of Decision Point, a nonprofit substance-abuse and behavioral disorder counseling program.

Woods supported a $200,000 grant to Ecclesia in September 2013, grant records show. Neal supported a $50,000 grant to the college and Woods another $150,000 in December, 2014, also according to grant records. The amount of money Woods is accused of receiving in kickbacks is not specified in the indictment. It claims much of that money was paid in cash, except for one transaction made to Woods by wire transfer for $40,000.

Paris paid Shelton's consulting company $267,000 out of college funds from 2013 to 2015 without notifying his college's board until October 2015, according to the indictment. Paris paid Shelton's consulting company, which is not named in the indictment, and Shelton would pass payments along to Woods while keeping a portion, according to the indictment. Shelton is described in court documents as a mutual friend of Paris and Woods.

The Legislature has not yet gone against the governor's wishes and appropriated General Improvement Fund money for local projects, spokesman J.R. Davis of the governor's office said Tuesday.

The governor recommended that no money be appropriated for such projects in the 2015 General Assembly but legislators did appropriate some. This year, the governor included no money in the budget for these projects and the line is holding, Davis said.

"It's at zero, and there are some good examples of why it should stay at zero," Davis said of such an appropriation.

Metro on 03/29/2017

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NWA Democrat-Gazette

Former state Sen. Jon Woods (right) walks Tuesday with his attorney, Patrick Benca (far left), and others from the Benca Law Firm to the John Paul Hammerschmidt Federal Building in Fayetteville.

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NWA Democrat-Gazette

Randell Shelton Jr. (left), with his attorney Shelly Koehler of Fayetteville, walks Tuesday into the John Paul Hammerschmidt Federal Building in Fayetteville.

*CORRECTION: Former state Rep. Micah Neal pleaded guilty Jan. 4 to one count of conspiracy to commit honest services fraud, admitting he took two kickbacks totaling $38,000 in exchange for directing grants from the state General Improvement Fund to two nonprofit entities. A previous version of this story gave an incorrect numbers of counts.

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