DALLAS (CBSDFW.COM) – Dallas Mayor Pro Tem Dwaine Caraway pleaded guilty to federal corruption charges Thursday, and resigned from his position on the Dallas City Council effective immediately. The former city leader now faces up to seven years in federal prison for wire fraud and tax evasion.
“Caraway entered a plea of guilty to two charges — one count of conspiracy to commit honest services wire fraud and one count of tax evasion,” said U.S. Attorney Erin Nealy Cox during a news conference on Thursday morning. “The conspiracy took place between 2011 and 2017.”
Cox spelled out the details of the multi-million dollar conspiracy which found Caraway being paid close to $500,000 for his votes and political influence. This all surrounds contracts for a company that was placing cameras on Dallas County school buses.
According to Cox, Caraway admitted to taking kickbacks, hiding from the IRS, and using his position to criminally support the company that received millions of dollars in contracts from the now defunct Dallas County Schools system, which was in charge of school buses across Dallas County.
Dallas County Schools had transported tens of thousands of students each day for the Dallas Independent School District and other districts in the county. But, after fraud allegations surfaced, voters last November decided to disband the agency for good. The school districts are now in charge of transporting their own students.
“This case,” Cox explained on Thursday morning, “and the guilty pleas in this case, reflect harmful and criminal conduct by both politicians and business executives — public officials who betray their position of trust and harm the integrity of our government.”
Robert Leonard, president and owner of school bus camera vendor Force Multiplier Solutions in Dallas, also pleaded guilty to “one count of conspiracy to commit honest services wire fraud,” Cox added. Company associate Slater Swartwood and former Dallas County Schools superintendent Rick Sorrells had pleaded guilty to conspiracy charges earlier this year.
Cox said that Leonard and Swartwood “paid Sorrells and Caraway a combined total of more than $3.5 million in exchange for favorable official action related to Force Multiplier Solutions, helping Leonard and his company secure over $70 million in contracts and agreements with Dallas County Schools.”
“Sorrells approved hundreds of purchase orders for camera equipment costing millions of dollars, most of which was never installed and sat unused in a warehouse,” Cox said. “He also entered into a $340,000 per month servicing agreement and a $25 million asset purchase licensing agreement.”
Leonard paid Caraway over $450,000 in bribes, kickbacks and other benefits, Cox said. This included times that Caraway specifically asked for money. “Leonard would, at times, pay Caraway with checks, which Caraway then negotiated at liquor stores in town,” added Cox.
Caraway and Sorrells used their illicit funds, Cox said, to “repay personal loans, acquire luxury clothing, fund personal trips to Las Vegas and New Orleans, and provide gambling money.” Caraway also “admitted that he evaded the reporting of the income tax on the benefits and payments that he received from Leonard.”
Dallas Mayor Mike Rawlings released the following statement about Caraway’s resignation:
I learned this morning of Dwaine Caraway’s guilty plea and resignation, and I have not yet reviewed the public details of the case. Therefore, I will not be making any public comments today beyond this statement.
As we all now know, the corruption at Dallas County Schools extended beyond the confines of that now shuttered organization. As your mayor, I am saddened by what we learned today about the actions of one of my former colleagues. I am sad for the city, especially the citizens of District 4, and for Mr. Caraway’s friends, family and supporters.
Mr. Caraway championed much good in his time in public service, particularly for the youth of our city. I appreciate that he is admitting his crimes and sparing the city what could have been a drawn out legal battle.
More than 12,000 people work for the City of Dallas. Almost every one of them serves honorably and ethically — and never make the news. This city is so much bigger than any one politician who lost his way.
City Council member Lee Kleinman told CBS11, “It’s a shame that he let himself get dragged… or dragged himself into this mess. I mean, the fault is his.”
Kleinman said he laments Caraway’s public corruption conviction will overshadow the good he did for his district. Kleinman also wonder who else will be caught up in the ongoing investigation.
“I imagine the reason Dwaine made a plea is because he’s gonna help the prosecutor find other people involved in this type of corruption. And… I doubt those fall very far from City Hall,” he said.
At the time, Caraway was running against Price and they were having an on-air candidate forum at the station.