Murray Businessman Responds to Fraud Indictment
By West Kentucky Star Staff
MEMPHIS - The owner of two defunct technology businesses and his former employee have been indicted on charges stemming from an alleged scheme to defraud a federal program to assist schools with technology-related expenses.

The U.S. Attorneys Office for the Western District of Tennessee says Chuck Jones, who owned Technology Associates, Inc. and Integrated Computer Solutions, Inc., and Mark J. Whitaker were indicted Thursday on charges of conspiracy to commit wire fraud and wire fraud.

The indictment says Jones and Whitaker conspired with another man, identified by media outlets as Ashley Jordan of Crockett County Schools, to fabricate documents and make false statements to administrators of the FCC's E-rate Program, which would pay up to 90 percent of costs for telecommunications equipment and services for schools and students. Documents allege the mens' goal was to circumvent E-rate program rules by falsely claiming that Jones had invoiced the schools, and then get E-rate payments to Jones' companies. Jordan allegedly received money and other gifts in exchange for his help, and was indicted in 2015 on theft and other charges. 

Jones was also the owner of the shuttered Southeastern Book Company and several other Murray-based businesses. He was sued in 2012 by textbook publishers McGraw-Hill and Pearson Education for allegedly producing counterfeit versions of their textbooks. He filed for personal bankruptcy in 2016. 

Jones released a statement Thursday afternoon saying his companies provided services and equipment to the schools as contractually outlined, and, "the claims in the indictment are categorically false." Jones said he believes the indictment is a result of a well-publicized business dispute with a former business partner, David Griffin. Jones says he looks forward to defending the charges against his character and work.

Here is the complete statement from Charles A. “Chuck” Jones:
"Yesterday, an indictment was filed against me relating to two companies I used to own. I started one of those companies in 1993 and the other in 2002. Every single school with whom we contracted received internet access, equipment and/or other services as contractually outlined, and any claims stating otherwise are a fabrication in an attempt to defame my character. I believe this action today is a result of a well-publicized business dispute dating back to 2012 with a former business partner, David Griffin, who was involved in one of the businesses. In fact, some of these allegations go back nearly 20 years and have been the subject of substantial litigation between me and Griffin. The claims in the indictment are categorically false and I look forward to defending these charges made against me and my work."

Here is the full indictment document from the US Attorney's Office:
Charles A. "Chuck" Jones, the part owner of two now-dissolved technology companies, Technology Associates, Inc. and Integrated Computer Solutions, Inc., and Mark J. Whitaker of Murray, Kentucky, were indicted on federal criminal charges of conspiracy to commit wire fraud and wire fraud. U.S. Attorney D. Michael Dunavant announced the indictment today.

According to the indictment, under the Federal Communications Commission’s E-rate Program, the government provides funding to qualified schools to purchase internet access and other telecommunications services and equipment for their students. The E-rate Program pays up to 90% of the cost of these technology services and equipment. Two of the Program’s core eligibility requirements are that applicant schools conduct a fair and open competitive bidding process and that each applicant school pay some percentage of the cost of the internet access and other telecommunications services and equipment. The E-rate Program pays the balance of that cost, which ranges from 20% to as high as 90%. As described in the indictment, the reason the schools are required to pay a portion of the costs are: a) to ensure that schools have a financial incentive to negotiate for the most favorable prices so that E-rate Program funds are not wasted; and b) to ensure that schools purchase only those items and services they truly need.

The indictment further charges that Jones and Whitaker conspired with an individual identified as A.J., to whomJones gave money and other things of value in return for A.J.’s assistance. The co-conspirators used A.J. and A.J.’s position with schools in Crockett County, Tennessee and Missouri to violate Program rules. Additionally, the co-conspirators submitted and caused to be submitted fabricated documents and made false statements and representations to the E-rate Program administrator, which included assertions that Jones’ companies had invoiced schools for the proper co-payment amounts. These actions were taken to circumvent E-rate Program rules and review and to obtain payments from the E-rate Program administrator to Jones’ companies. Jones’ companies received approximately $8.5 million from the E-rate Program and Jones used funds from the companies’ bank accounts for his own benefit.

U.S. Attorney D. Michael Dunavant said, "Protection of federal grant programs that provide needed services and equipment to our schools in West Tennessee is a top priority of this office. When dishonest offenders conspire to defraud these programs for their own selfish gain and unjust enrichment, they not only steal tax dollars, but also hurt local schools in the process. We will continue to work with our federal partners to root out and expose such fraud against the government, to hold offenders accountable, and to recover ill-gotten gains."

FCC Inspector General David Hunt stated: "Today’s charges allege that Mr. Jones and Mr. Whitaker knowingly and willfully violated the bedrock requirements of the FCC’s E-rate Program while hiding these violations from the Program’s administrator, all with the goal of enriching Mr. Jones with E-rate funds, thus depriving students of the benefits of this program – up-to-date telecommunications services. I thank U.S. Attorney Dunavant for prosecuting this case. We will continue to work with our law enforcement partners to pursue those who seek to illegally take money from the FCC’s programs."

This case was investigated by the FCC Office of Inspector General and the Federal Bureau of Investigation.

Assistant United States Attorneys Tony Arvin and Murre Foster are prosecuting this case on the government’s behalf.

The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.


On the Net:

TN Man Charged in Murray Bid Rigging Case

Published 05:03 PM, Thursday Feb. 07, 2019
Updated 04:41 PM, Friday Feb. 08, 2019

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