New Orleans Official Accused in Katrina Damage Kickback Scheme

December 14, 2009

A member of the governing body of New Orleans’ Sewerage and Water Board has been indicted on charges he solicited kickbacks from companies with contracts to inspect damage from Hurricane Katrina.

Benjamin L. Edwards Sr., 55, directed board work to various companies and demanded payoffs that went from the companies to a church where he was a pastor, according to a federal grand jury’s 33-count indictment.

Edwards allegedly withdrew millions of dollars from the church bank account to pay for vehicles and other personal expenses and to fund political campaigns, the indictment said. Edwards spent $269,250 in support of New Orleans Mayor Ray Nagin’s 2006 re-election campaign, according to records on file with the state’s ethics board. A spokeswoman for Nagin didn’t immediately return a call and e-mail seeking comment.

Court records unsealed Dec. 11 also revealed that Edwards’ brother, Bruce Edwards Sr., 50; and Oliver C. Coleman, 54; pleaded guilty earlier this month to charges related to the kickback scheme.

Bruce Edwards pleaded guilty to one count of wire fraud and one count of tax evasion. Coleman pleaded guilty to misprision of a felony.

Coleman was listed as the registered agent for one of the companies that Bruce Edwards secretly controlled, according to prosecutors. Coleman’s actions “had the potential to obstruct the investigation,” according to court papers filed Dec. 4.

Benjamin Edwards, an appointed member of the agency’s board of directors since 1989, is accused of abusing his position to direct work to his brother, who secretly controlled a company that had a contract to inspect damage to the board’s water distribution system from the 2005 hurricane.

U.S Attorney Jim Letten said nearly $3 million in payoffs went from companies to Third Shiloh Missionary Baptist Church. Benjamin Edwards served as director of the church, and his brother was a member of its board of directors. Letten wouldn’t specify how much of the church’s money was allegedly spent by Benjamin Edwards for his personal use.

“Cases like this give us, the citizens, a good look into how the functions of government can be abused by corruption,” Letten said.

Edwards, who was appointed to his unpaid board position in 1989 by former Mayor Sidney Barthelemy, faces charges that include wire fraud, money laundering, extortion and tax evasion.

Edwards’ lawyer, Robert Jenkins, said, “We’re going to read the indictment, but at this stage (Edwards) maintains his innocence in this matter. We’ll prepare for a trial. That’s all we can do at this point.”

Howard Schwartz, assistant special agent in charge of the FBI’s New Orleans office, said the investigation was spawned by a complaint by a small business owner who was victimized by Edwards. Schwartz and Letten wouldn’t identify the business owner or provide details of the business owner’s complaint.

“Because of that one citizen, this is the result,” Schwartz said.

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