You can go to the Ft. Worth Star Telegram for picture version of this story.  However, since this story was posted on the 3rd of March, 2004 and it is now in the archives which requires you to sign in.   FORT WORTH DISTRICT BILKED OUT OF $10 MILLION 2 are charged in billing scam Ex-employee, contractor expected to plead guilty By Jennifer Autrey;Toni Heinzl Star-Telegram Staff Writers FORT WORTH - A scam that cheated the Fort Worth school district out of $10 million began simply enough: An assistant athletic director couldn't pay his credit card bills. Tommy Ingram saw the chance to get out of that jam in 1995 when some concrete needed to be poured at a school athletic facility. He suggested to local contractor Ray Brooks that they jack up the price and split the take. Brooks agreed and thus began a scheme that went undetected for six years and drained the district of funds that could have paid for books or microscopes for children, hired teachers or saved a beloved learning center. It will prove to be one of the costliest public corruption scandals in the history of Texas school districts -- and it is not over. This was the scheme laid out by prosecutors in court filings on Tuesday. Federal charges accuse Brooks, 57, and Ingram, 55, of defrauding the district by inflating the cost of construction work at school properties and by billing for work that never occurred. But the two were charged with mail and tax fraud, a traditional tactic used for combating white-collar crime. Both will be arraigned Friday morning, when they are expected to plead guilty to the charges, according to prosecutors. Prosecutors hint that others could be charged. Both men have agreed to cooperate in the federal investigation, assistant U.S. Attorney Ronald Eddins said. However, neither Eddins nor attorneys for Ingram and Brooks would say who else might be targeted in the ongoing investigation. The FBI began a probe into financial mismanagement and corruption in the district's construction program four years ago. As the investigation widened, it drew in investigators from the U.S. Postal Inspection Service and the IRS. During that time, the Star-Telegram raised questions about whether Brooks Contractors and another company, Newark-based J&L Construction, were paid for work that was never done or was billed at excessive rates. Most of that work was approved by Ingram or his boss, former Associate Superintendent Eldon Ray. Brooks' work included projects at the popular Outdoor Learning Center. The Star-Telegram found that what Brooks had charged the district for hauling dirt at the learning center on one day would have required dozens of dump trucks working eight hours straight -- a "Hoover Dam-type" project, one expert said. Brooks' price to upgrade a sewer at the center was $421,162, more than 10 times an engineer's estimate. The school district closed the center because of a lack of funds in 2002. Brooks' work for the district totaled more than $24 million from 1997 to 2002. However, much of the work was broken up into increments of less than $25,000 to skirt requirements that the projects be competitively bid, the Star-Telegram analysis showed. About $15 million of Brooks' work was paid from the general fund, which pays for teacher salaries and classroom needs. Last year, an external auditor documented a similar pattern, reporting that Brooks may have been overpaid by $4.8 million for work he performed on five projects. At Eastern Hills High School, Brooks billed for removing enough dirt to cover a football field, including end zones, 53 feet deep. Ray retired in 2002, citing family obligations. Ingram announced his retirement in December 2002 after the Star-Telegram revealed that Ray, Ingram and another employee, Ralph Cano, had traveled to Louisiana and Mississippi on district time and called casinos on school district cellphones. The scandal pushed the school board into turmoil and has tarnished the reputation of Superintendent Thomas Tocco, whose contract the school board declined to renew beyond December. And it has prompted renewed calls from inside and outside the district for Tocco to resign. The court documents filed Tuesday were the first to explain that Ingram initiated the billing scam. At the time, Ingram was an assistant athletic director, the court documents say. He continued to receive kickbacks from Brooks for years. After Ingram was promoted to director of maintenance in 1998, the scheme expanded. Brooks and Ingram would meet at construction sites across the district, ostensibly to identify needed concrete work. They would agree on how much to inflate the cost of the work. Ingram would grease the wheels by signing purchase orders reflecting the make-believe amount. Brooks would issue a matching invoice. The district would then cut Brooks a check. The two men would meet again at construction sites. Brooks would hand Ingram his cut in a newspaper or a paper bag. It happened time and again across the district. Almost no trustee's district was spared. There was fraud at Arlington Heights, Eastern Hills and Southwest high schools. There was fraud at Meadowbrook, Oakhurst and Springdale elementaries. There was fraud at a school named after Trustee Christene Moss. There was even fraud going on just outside the back windows of the district administration offices, at a Shotts Street building being renovated for school board meetings. When the job was complete, trustees sat in that building and voted to give Brooks even more work. The sheer amount may have ultimately led to Ingram's and Brooks' downfall. In September 1999, the district mailed a $606,000 check as payment for fraudulent purchase orders for material and work at 12 properties. Once the U.S. Postal Service delivered the check, mail fraud became a possible charge. Similarly, Brooks and Ingram were supposed to be truthful to the IRS about all the money they were stealing from the school district. In separate counts, Ingram is charged with submitting a fraudulent joint federal income tax return for 1998 by failing to report $572,000. Though his wife, Brenda, signed the return, only those deemed culpable in the scheme were charged, Eddins said. Brooks is accused of under reporting his income on a corporate tax return form for 2000. He failed to report about $2.1 million in funds stolen from the school district, court documents show. No other tax fraud charges were filed, though the kickbacks took place over several years. With negotiated plea agreements, prosecutors generally do not seek charges for every crime for which they have evidence. Ingram and Brooks made their initial court appearance Tuesday afternoon before U.S. Magistrate Judge Charles Bleil. While Ingram and Brooks appeared in the same courtroom, they entered and exited the courthouse separately. Ingram arrived with his wife and Fort Worth attorney Rick Disney. Brooks, whose wife, Joyce, filed for divorce in 2002, was escorted by Dallas attorney John Sweeney. Brooks and Ingram never made eye contact and showed no indication that they had been partners for more than half a decade. Both were allowed to remain free pending resolution of their cases but were ordered not to leave the country. Sweeney said Brooks would have no comment. Disney, on behalf of Ingram, said only, "Friday, you'll see more." The two men face up to eight years in prison without parole, restitution and a $350,000 fine or a fine amounting to double the financial loss -- potentially $20 million. The restitution amount will be set by U.S. District Judge John McBryde at a sentencing hearing, which could take place several months from now. Independently, in an attempt to recover overpayments from Brooks and his company, the school district sued him in February 2003. It has also recently intervened in the Brooks' divorce case. In a petition filed last week in Tarrant County District Court, the district is trying to prevent the disposal of assets that were the result of fraudulent overcharges to the district. The plea bargain with Ingram and Brooks was approved by senior attorneys in the U.S. Attorney's Office for the Northern District of Texas in Dallas and Fort Worth and by prosecutors in the Justice Department's Tax Division in Washington, which is customary in criminal tax cases. Ingram and Brooks and their defense attorneys agreed that prosecutors could release details of their pending plea agreements before they were approved by the district judge presiding over the case, according to the news release from the office of U.S. Attorney Jane Boyle. Eddins said the case took years to prepare because of its complexity. He emphasized that the case was about children. "The taxpayers in the Fort Worth Independent School District and the students were denied the benefits that this money could have brought to their schools, teachers and classrooms," he said. In a written statement, Boyle said the corrupt actions by Ingram and Brooks "reflect our collective worst nightmare about what happens when the wrong people are placed in positions of trust within our school districts." "The message from this prosecution is clear: The financial integrity of our school systems will not be compromised -- by anyone," she said. Tocco said Tuesday that he wanted to reserve judgment until Ingram is actually convicted. "If it turns out to be a valid charge, and he's convicted, surely, it's a despicable thing to do," Tocco said. "It's essentially stealing from children." A scandal unfolds Federal authorities have been investigating wrongdoing in the Fort Worth school district's maintenance and construction work for four years. These are key dates in the investigation. AUG. 10, 2000: A federal grand jury requests documents for work performed by Ray Brooks' two companies, Brooks Contractors and Goldstar Concrete. OCT. 11, 2001: School district administrators publicly acknowledge the federal investigation. NOV. 13, 2001: School board President Gary Manny announces that an outside auditor will be hired to investigate district construction contracts. SEPT. 22, 2002: A Star-Telegram examination finds evidence of construction irregularities and shoddy oversight in the school district. SEPT. 29, 2002: The Star-Telegram reports that Brooks did personal concrete work for Superintendent Thomas Tocco, former Associate Superintendent Eugene Gutierrez, school Trustee Judy Needham and Associate Superintendent Eldon Ray. OCT. 26, 2002: A district investigation accuses Fort Worth contractor Leonard Briscoe Sr. of altering signed contracts in an effort to obtain more money for six school construction projects. DEC. 16, 2002: Maintenance Executive Director Tommy Ingram and two maintenance supervisors, Ralph Cano and Eddie Franklin, choose to retire after the Star-Telegram reports that Ray, Ingram and Cano made out-of-state trips on district time and called casinos on district cellphones. JAN. 9, 2003: District officials announce that they found pornography on the computer assigned to Ingram but said others had access to the machine. JAN. 27, 2003: An external auditor determines that the district may have overpaid Brooks by $4.8 million for concrete work at five schools. FEB. 3, 2003: A subpoena requests documents related to Newark-based J&L Construction Co., which built fences for the district. Another subpoena asks for the personnel files of nine maintenance employees. FEB. 11, 2003: The school board votes to sue Brooks Contractors. FEB. 12, 2003: A subpoena requests all documents from the district's internal investigations of Ingram, Franklin and Cano. OCT. 26, 2003: Brooks tells school district lawyers that he did personal concrete work for Ingram. NOV. 17, 2003: A subpoena requests all documents related to six contracts awarded to Briscoe Construction Corp. JAN. 12, 2004: A subpoena requests all documents for Allied Fence of Fort Worth, as well as for businesses owned by Grady Young of Alvarado. MARCH 2, 2004: Federal prosecutors file criminal charges accusing Ingram and Brooks of defrauding the district by falsely billing millions of dollars of work. SOURCES: Star-Telegram research; grand jury subpoenas Back to News Articles --------------------------------------------------------------------------------