July 20--New details emerged Thursday about interlocking conspiracies to defraud millions of dollars from taxpayers and employees of the Ysleta and Socorro school districts.
As she read the basis for three guilty pleas in U.S. District Court, Assistant U.S. Attorney Debra Kanof described bribes, secret meetings, wiretapped phone conversations and arguments between public officials as they clashed over conflicting corrupt schemes.
Former Ysleta school district trustee Milton "Mickey" Duntley, former Socorro district trustee Raymundo Chavez and former District Clerk Gilbert Sanchez pleaded guilty to a single count of conspiracy to commit mail and wire fraud. They were indicted along with eight others in August 2010 on charges they corruptly steered more than $100 million worth of government business to Access HealthSource, an insurance-services company owned by the National Center for Employment of the Disabled.
Two others named in the indictment, former Ysleta trustee Linda Chavez and Marc Schwartz, a spokesman for Access, pleaded guilty to their roles in the conspiracy on July 13. Sanchez is already serving a six-year sentence after he and former County Judge Luther Jones were convicted last year in a separate case .
Kanof described in court how, starting in 2004, Schwartz and Access president Francisco "Frank" Apodaca sought the help of Jones in steering health insurance business to Access.
Access had the Ysleta schools' business, but in July 2004, the school board
voted unanimously to award its business to Blue Cross Blue Shield.
Jones met with school trustees -- particularly Duntley -- and submitted itemized bills to Access for meals and other meetings he had with Duntley, Kanof said.
Jones also billed the insurance company for meetings with Sanchez and a "John Doe" who was a school trustee. Sanchez's father was a member the school board at the time.
Kanof said a "cooperator" described an August 2004 meal at the Singapore Cafe for which Jones billed Access $82. Jones, Sanchez and "John Doe" discussed a legal challenge Access was planning in response to losing the Ysleta school business.
"Jones stressed the importance of having the case go to a friendly judge," Kanof said.
Former county Chief of Staff Travis Ketner in 2007 pleaded guilty to a criminal information that accused Sanchez, the former district clerk, of rigging the system by which judges were to be randomly selected.
In September 2004, as the Ysleta school board considered reopening Blue Cross Blue Shield's five-year contract, Duntley emailed Schwartz the resume of a relative, reported to be Duntley's son.
Apodaca forwarded the resume to managers of NCED, noting that it belonged to a relative of an Ysleta school trustee. NCED at the time was headed by Bob Jones, who was sentenced to 10 years in prison and ordered to pay $68 million in restitution after he pleaded guilty to corruption charges.
Duntley's son worked for a subsidiary of NCED. Kanof said giving a job to Duntley's son was a bribe for Duntley's support for Access, which Duntley admitted on Thursday.
Duntley also was accused of allowing Schwartz and Apodaca to wipe out part of a health-care debt he owed.
At an Oct. 27, 2004, school board meeting, Duntley made the motion for the Ysleta school district to shift its business to Access. The motion carried with Duntley and "John Doe" voting in support.
By mid-2005, problems with the service Access was providing emerged at roughly the same time that Luther Jones began to clash with Duntley.
An insurance consultant said Access hadn't provided $6 million in discounts it promised.
"The brunt of the extra costs fell on YISD employees," Kanof said.
Meanwhile, Luther Jones began to push the school board to fire its law firm, Mounce, Green, Myers, Safi and Galatzan, and hire one of his choosing, Delgado, Braden, Acosta and Jones. Luther Jones stood to collect a percentage of the money the firm collected from the district, Kanof said.
But Duntley resisted the arrangement, said the document that both he and Sanchez on Thursday agreed was true.
Because of Access' performance problems, the Ysleta school board was again discussing whether to seek another insurance provider. Luther Jones was incredulous that Access wouldn't support his bid for the district's legal business in exchange for his help in keeping the insurance contract.
"David, the more I think about what happened to us at the hands of Duntley and (Bob Jones) the more deeply resentful I become," said a July 23 email between Luther Jones and co-defendant David Escobar that is quoted in the indictment. "I want you to help me persuade (an unnamed trustee) to join with (two other trustees) to 'do the right thing' on the insurance contract -- believe me, there are a host of reasons to get rid of Access! I will ask (former District Clerk) Gilbert (Sanchez) to work on his father (former Ysleta school Trustee Jesus Sanchez)... (former County Judge) Luther (Jones)."
In an email, Luther Jones urged Sanchez to get "John Doe" to tell Duntley he wouldn't support Access unless Duntley supported a change of lawyers.
"Please use your influence one more time," said the email, quoted Thursday by Kanof. "Tell him it's life or death for you, Gilbert."
Duntley relented and in October 2005, the board voted 4-3 to hire the law firm Luther Jones wanted, Kanof said.
As officials clashed over corrupt schemes in Ysleta, Socorro school Superintendent Robert Duron was battling to clean up his district, Kanof said. Soon after he was hired in late 2003, Duron developed a code of ethics -- particularly as it pertained to procurement.
"The superintendent developed the reputation he would blow the whistle," Kanof said.
Access had the district's health care business, but its contract was set to expire on Sept. 1, 2005, and there was intense competition to win it. Once a request for proposals was written, bidders were prohibited from contacting trustees and members of the selection committee were sworn to secrecy about the proposals the district received.
But there were problems. In May 2005, one bidder, Aetna, contacted board members and was disqualified from the process, Kanof said.
Then Apodaca of Access started to influence the process. The Socorro board changed the request for proposals to ask for a combination of an exclusive-provider and a preferred-provider networks.
A subsequent investigation by the FBI showed such a package of coverage did not commonly exist -- it was a creation of Access, Kanof said.
Meanwhile Rodriguez, the Socorro trustee, and Schwartz flouted the dictate that they not communicate with each other. An Aug. 1, 2005, wiretap recorded the two discussing how they knew they shouldn't be talking to each other, Kanof said.
Later that month, as the board prepared to vote on the health contract, Duron sent a text message to board members reminding them of their ethical obligations. That prompted an angry email from Luther Jones, questioning the superintendent's motives, Kanof said.
The selection committee recommended the proposal by Cigna as the best. But when the board considered the contract, Rodriguez moved that Access be hired, and a majority supported him.
Rodriguez, a medical-supply salesman, was charged with trading his vote for business from one of the companies related to Access.
With the final deal between the Socorro school district and Access still under negotiation, Duron reminded trustees they still were banned from talking with Access officials.
Rodriguez was prepared to sign a false affidavit saying he hadn't communicated with Access, but another trustee blew the whistle. Willie Gandara Sr., a trustee accused of taking a $1,000 bribe from Schwartz, filed a complaint against Apodaca, Kanof said.
The school district abandoned its negotiations with Access and contracted with Cigna.
Marty Schladen may be reached at firstname.lastname@example.org; 546-6127
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