Two Plead Guilty in Scheme to Defraud the Chowchilla Elementary School District

FRESNO, CA—United States Attorney Benjamin B. Wagner announced today that Gregory Paul Styles, 45, of Lemoore, and Marvin Mitchell Freeman, 58, of Selma, pleaded guilty today before United States District Judge Lawrence J. O’Neill to conspiracy to commit mail fraud against the Chowchilla Elementary School District.

This case is the product of an extensive investigation by the Federal Bureau of Investigation and the Chowchilla Police Department. Assistant United States Attorney Mark J. McKeon prosecuted the case.

According to court documents, in 1998 Styles was employed as a Management System Information Director for the school district. At that time, a federal program known as E-Rate was available to help schools obtain affordable telecommunications and Internet access. It was designed so that the neediest schools would receive the most financial help. School districts were required to fund a percentage of the cost of the equipment and services. As an employee of CESD, Styles was ineligible to bid for the project or to receive funds from the E-Rate Program. In order to circumvent these rules, Styles developed a scheme with Freeman whereby Freeman would submit a bid during the competitive bidding process to provide equipment and services to be paid for under the E-Rate Program.

According to the plea agreements, Styles, as an agent of CESD, was instrumental in selecting Freeman’s bid for the contract. Once Freeman’s bid was selected, Styles performed the work or subcontracted others to perform the work as bid. Under the contract, Freeman received payment and then transferred the monies to Styles for his personal use. Styles has agreed to forfeit the proceeds of the fraudulent scheme.

The defendants are scheduled to be sentenced on January 24, 2011 at 8:45 a.m. The maximum statutory penalty is five years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.