Gainesville Businessmen Sentenced to Federal Prison for Roles in Paying Kickbacks to Former Florida Department of Corrections Officials

JACKSONVILLE, FL—United States Attorney Robert E. O’Neill announces that Friday, January 13, 2012, United States District Judge Timothy J. Corrigan sentenced Edward Lee Dugger (65, Gainesville) to 26 months in federal prison and Joseph Arthur Deese (38, Gainesville) to 14 months in federal prison for their respective roles in a conspiracy to pay approximately $130,000.00 in kickbacks to the former secretary of the Florida Department of Corrections, James Vernon Crosby, Jr., and another former high-ranking FDOC official, Allen Wayne Clark. Dugger and Deese previously pled guilty to conspiring to pay kickbacks. The Court also ordered Dugger and Deese to jointly forfeit $232,019.11.

According to court documents, Crosby and Clark assisted Dugger and Dugger’s business associate, Deese, with obtaining a contract with Keefe Commissary Network—a St. Louis, Missouri corporation. The contract involved having Keefe Commissary operate the canteen grocery stores inside the visiting parks of all prisons within the state of Florida prison system. These canteen stores are areas within the Florida prisons stocked with foodstuffs and other items that visitors could purchase while visiting inmates during prison visiting hours. FDOC made millions of dollars each year from the sale of such items to inmates and inmate visitors.

In 2003, FDOC negotiated a contract to privatize FDOC’s institutional canteens with Keefe Commissary, which gave Keefe Commissary the right to run both the inmate canteens inside the prisons and the visiting park canteens open to visitors, also situated inside the prisons. As part of this contract, Keefe Commissary agreed to pay FDOC a certain fee per day per inmate, which was anticipated to provide FDOC with revenues in excess of $20 million per year. As Secretary of FDOC, Crosby had the direct authority to enter into the contract, to implement contractual amendments and to renew their contract. Crosby also had to approve the use of any subcontractors.

In June 2004, Crosby and Clark introduced Dugger and Deese to representatives of Keefe Commissary for the purpose of encouraging Keefe Commissary to utilize Dugger and Deese in opening and operating visiting park canteens throughout the prisons in Florida. Dugger and Deese agreed that if Keefe Commissary utilized Dugger as a subcontractor on the Keefe Commissary contract, then Dugger and Deese would kickback a portion of the proceeds to Crosby and Clark.

The full amount of the kickbacks, which were paid over several months spanning 2004 until early 2006, was approximately $130,000.00. The kickbacks were paid monthly and gradually increased over time from approximately $1,000.00 per month up to as much as $14,000.00 per month. Dugger and Deese withheld certain amounts of cash from canteen revenues, out of which Deese delivered the kickback payments to Clark, who, in turn, delivered the kickback payments to Crosby.

In 2007, Crosby and Clark were convicted of corruptly receiving these bribes. Crosby was sentenced to 96 months in federal prison. Clark was sentenced to 31 months in federal prison, and has since been released.

This case was investigated by the Federal Bureau of Investigation and the Florida Department of Law Enforcement. It was prosecuted by Assistant United States Attorney A. Tysen Duva.