Mayor of Port Allen, Louisiana Convicted of Racketeering

BATON ROUGE, LA—United States Attorney Donald J. Cazayoux, Jr., announced today that DEREK A. LEWIS, age 50, of Port Allen, Louisiana, pled guilty before U.S. District Court Judge Brian A. Jackson to violating the Racketeer Influenced and Corrupt Organizations Act (RICO). LEWIS, the Mayor of the City of Port Allen, Louisiana, had been charged by a federal grand jury with a variety of offenses related to his taking of bribes while Mayor. His trial had been scheduled to begin on July 25, 2011.

RICO provides for a maximum sentence of 20 years’ imprisonment, a $250,000 fine, and forfeiture. Given LEWIS’s acceptance of responsibility and cooperation, the parties have agreed that a sentence of imprisonment not to exceed five years is appropriate. In addition to any term of imprisonment, LEWIS will be required to forfeit all of the proceeds from the offense and faces up to $250,000 in fines and a term of up to three years of supervised release following imprisonment.

LEWIS’s conviction is part of Operation Blighted Officials, an investigation utilizing undercover operations to determine the extent and scope of public corruption. As part of the operation, individuals working undercover for the FBI posed as businessmen (hereinafter referred to as “the Businessmen”) affiliated with a company involved in the development of a conceptual product known as the “Cifer 5000.” The Cifer 5000 was marketed as an automated waste container cleaning system using specially-designed and equipped trucks to clean and sanitize commercial and residential waste containers. Its potential customer pool was represented to be governmental entities, such as municipalities.

During his guilty plea, LEWIS admitted that, during the period from October 2008 through June 2010, he used his position as Mayor to take actions favorable to the Businessmen, including the promotion of the Cifer 5000 in the city and elsewhere, in exchange for cash and other things of value totaling over $15,000. LEWIS admitted that such official actions included (1) writing a false official letter of support which he believed would be used to secure millions of dollars in private investor capital; (2) writing a false official letter of support which he believed would be used to convince other public officials to contract with the Cifer 5000; (3) agreeing to propose a City ordinance favorable to the Cifer 5000 project; (4) writing an official letter of support which he believed would be provided to the U.S. Environmental Protection Agency in connection with a multi-million dollar grant request; (5) providing access to confidential law enforcement information through the Chief of Police; and (6) guaranteeing that the Cifer 5000 would receive a contract with the City.

The status of the other defendants in Operation Blighted Officials is as follows:

■Johnny Johnson: On July 23, 2010, the former City Councilman of Port Allen, Louisiana, was convicted after pleading guilty to using an interstate facility in aid of racketeering. Johnson faces up to five years’ imprisonment and a $250,000 fine. He will be sentenced by Chief U.S. District Judge Ralph E. Tyson on a date to be determined.

■Maurice B. Brown: On March 3, 2011, the former Mayor of White Castle, Louisiana, was convicted by a federal jury following a seven-day trial of 11 counts of violating RICO, engaging in honest services mail and wire fraud, and using an interstate facility in aid of racketeering. His brother was acquitted. Former Mayor Brown faces up to 145 years’ imprisonment and a $2,750,000 fine. He is scheduled to be sentenced before U.S. District Judge Brian A. Jackson at 9:30 a.m. on August 10, 2011.

■Thomas A. Nelson, Jr.: On July 22, 2011, the former Mayor of New Roads, Louisiana, was convicted by a federal jury following an eleven-day trial of 7 counts of violating RICO, engaging in honest services wire fraud, using an interstate facility in aid of racketeering, and making false statements to the FBI. He faces up to 65 years’ imprisonment and a $1,750,000 fine. He will be sentenced by Chief U.S. District Judge Ralph E. Tyson on a date to be determined.

■Frederick W. Smith: The Chief of Police for Port Allen, Louisiana, has been charged by a federal grand jury with 11 counts of violating RICO, engaging in honest services wire and mail fraud, and using an interstate facility in aid of racketeering. If convicted, Smith faces up to 130 years’ imprisonment and a $2,750,000 fine. His trial is set to begin on July 25, 2011 before U.S. District Judge Brian A. Jackson.

■George L. Grace, Sr.: The former Mayor of St. Gabriel, Louisiana has been charged by a federal grand jury with 11 counts of violating RICO, bribery involving a federally-funded entity, making false statements, obstruction of justice, honest services mail and wire fraud, and use of an interstate facility in aid of racketeering. If convicted, Grace faces up to 180 years’ imprisonment and a $2,750,000 fine. His trial is set to begin on January 23, 2012, before Chief U.S. District Judge Ralph E. Tyson.

U.S. Attorney Cazayoux stated, “I am pleased that the defendant has accepted responsibility for his actions. His guilty plea allows his community to move forward and past this dark period in its history. This case highlights the importance of discovering and prosecuting public corruption and demonstrates the continued commitment of the U.S. Attorney’s Office in prosecuting these crimes which undermine the public’s confidence in its government. We look forward to proceeding with other cases under Operation Blighted Officials.”

FBI Special Agent-in-Charge David Welker stated: “Today’s guilty plea marks a significant step in this ongoing investigation and should send a clear message to any public official contemplating using his office to line his pockets for self-enrichment. This guilty plea and other ongoing public corruption probes reflect the FBI’s commitment and dedication to deterring and preventing future schemes that involve elected officials.”

Operation Blighted Officials is an ongoing investigation being conducted by the Federal Bureau of Investigation and the United States Attorney’s Office for the Middle District of Louisiana. The U.S. Department of Housing and Urban Development, Office of Inspector General, has also assisted. These matters are being prosecuted by Assistant United States Attorney Corey R. Amundson, who serves as the Senior Deputy Criminal Chief, and Assistant United States Attorney M. Patricia Jones, who serves as the Senior Litigation Counsel. In addition, Assistant United States Attorney Alan A. Stevens is a member of the LEWIS prosecution team and Assistant United States Attorney Michael Jefferson is a member of the NELSON prosecution team.