Dallemand took more than $400,000 in bribes from Cliffard Whitby, plea agreement says

Bibb County’s top industry recruiter was arrested Friday after a federal grand jury indicted him in a public corruption probe linked to the school district’s former superintendent.

Grand jurors indicted Macon-Bibb County Industrial Authority Chairman Cliffard Whitby, 54, of Forsyth on charges of conspiracy to pay a bribe to an agent of an organization receiving federal funds, conspiracy to launder the proceeds of unlawful activity, and five counts of paying a bribe to an agent of an organization receiving federal funds, according to the U.S. Attorney’s Office.

In a move related to the indictment, former school Superintendent Romain Dallemand, 49, pleaded guilty in Florida Wednesday to filing a false tax return for 2012, under-reporting his income and over-reporting his itemized deductions, according to a statement from federal prosecutors.

Dallemand failed to report an unauthorized $100,000 payment intended to influence him to perform certain actions while he was superintendent related to the Macon Promise Neighborhood plan, according to the statement.

During a hearing Friday, Whitby pleaded not guilty to the charges against him before U.S. Magistrate Charles H. Weigle. The judge set a $15,000 bond for Whitby and ordered him to surrender his passport, to remain in Georgia and to have no contact with Dallemand.

The Industrial Authority issued a statement Friday saying that the charges against Whitby were unrelated to its business and that its vice chairman, Robbie Fountain, would be serving as acting chairman, handling the agency’s day-to-day operations.

Bribes to support Promise Neighborhood plan

The indictment, unsealed Friday morning, said Whitby approached Dallemand sometime between August 2011 and June 2012 “to ensure Dallemand would support” the Promise Neighborhood plan. That was an ambitious project designed to help transform the impoverished Unionville and Tindall Heights neighborhoods so students there — and their families — would have better lives.

Later, Whitby “offered Dallemand $100,000 for his support.” Dallemand, the indictment said, “accepted this offer and agreed to support” the program.

Later, Whitby offered Dallemand 10 percent of the $1 million the school district would contribute to the Promise Neighborhood program each year, the indictment said. “Thus, Whitby indicated that Dallemand would be paid $100,000 every year for 10 years for his continued support” of the program.

Dallemand accepted this offer and “understood that he needed to ensure the (Bibb County school district) continued to financially support” the Promise Neighborhood plan.

Dallemand received a $100,000 check from Whitby on Nov. 19, 2012, “with assistance from” Harold Knowles, part owner of Pinnacle/CSG, a Florida-based construction company that was contracted to provide software to the Bibb school system in 2012, according to Dallemand’s plea agreement.

But that was only the start of the pipeline from Whitby to Dallemand, according to federal documents.

Also unresolved is a multimillion-dollar lawsuit filed last year related to technology purchases. In it, the Bibb County school system maintained that it didn’t receive the software. A lawyer representing Pinnacle has said the company tried to deliver it and wasn’t allowed.

The lawsuit alleges that Dallemand, Isaac Culver and his company, Progressive Consulting Technologies Inc.; former school technology director Tom Tourand; CompTech Computer Technologies Inc. and its president and CEO, Allen J. Stephen; and Pinnacle/CSG Inc. and its president, Cory McFarlane, participated in a series of fraudulent acts stemming from 2012 technology sales to the school district. Tourand died earlier this summer.

The school system is trying to recover about $7 million it contends was paid out fraudulently in the course of technology purchases.

Culver, Progressive and Culver’s business partner, Dave Carty, were also indicted in June on federal fraud charges stemming from the sale of 15,000 Ncomputing devices to the district that were delivered without the necessary components to make them functional.

As part of the lawsuit, lawyers for the school system have subpoenaed bank records for Culver, Progressive, Whitby, Knowles and others seeking to trace financial transactions related to the technology purchases.

Reached for comment late last month, Whitby said his construction company, Whitby Inc., has worked on many projects with Progressive.

He denied any wrongdoing, saying he didn’t have any involvement in “whatever the school board is alleging Progressive has done.”

Dallemand’s plea deal

Knowles, 69, of Tallahassee also was indicted on charges of conspiracy to pay a bribe to an agent of an organization receiving federal funds, conspiracy to launder the proceeds of unlawful activity, and paying a bribe to an agent of an organization receiving federal funds.

Dallemand also received a $70,000 payment from Whitby in 2013, and in 2015 he received another $264,000, according to details of his plea agreement. Dallemand left the Bibb school system in 2013.

Federal prosecutors allege that Dallemand failed to report the payments on his income tax forms in 2012, 2013 or 2015. He also reported business losses and other deductions on his tax returns for 2013, 2014 and 2015 that weren’t true, according to the plea agreement.

A sentencing date hasn’t yet been scheduled for Dallemand, who could face a maximum sentence of three years in prison and a fine of up to $250,000, or twice the gross gain or loss from the offense, whichever is greatest.

As part of the deal, Dallemand has agreed to “cooperate fully” with the investigation and prosecution of the case and produce documents and other objects, according to the agreement.

In exchange for Dallemand’s plea and cooperation, prosecutors have agreed to recommend that Dallemand receive credit for “acceptance of responsibility,” a factor that could reduce his sentence, assuming prosecutors find no “adverse information” suggesting that the recommendation is unwarranted, according to the agreement.

Dallemand has agreed to pay all taxes, interest and penalties owed from his tax returns in 2012 through 2015. He also must pay restitution to the Internal Revenue Service.

Attempts by The Telegraph to reach both Knowles' and Dallemand’s attorneys Friday were unsuccessful.

Following the money

The Central Georgia Partnership for Individual and Community Development and Positiventures Initiative LLC, both based in Macon, also were indicted on a charge of conspiracy to launder proceeds of unlawful activity.

Whitby was executive director of the Macon Promise Neighborhood program from July 1, 2012, to July 31, 2013. He was also the registered agent for Positiventures, a Georgia limited liability company.

His Promise Neighborhood responsibilities included securing external funding and civic support and developing a fiscally sound business plan.

The Central Georgia Partnership helped administer the Macon Promise Center, which was located in the former Ballard-Hudson Middle School building on Anthony Road. (The school system had auctioned off the building for $220,000 in 2009 to Whitby Inc. The Central Georgia Partnership took title.)

Early on, Mercer University was the fiscal agent for the program. It paid Whitby more than $86,000 for the period of his employment, according to Larry Brumley, Mercer’s chief of staff and senior vice president for marketing communications. No payment associated with Mercer was ever made to Dallemand, he said.

“If what we read in the news accounts is true, it’s very disappointing,” he said.

Here’s what happened, according to the indictment:

In 2012, the Bibb school board approved a “memorandum of understanding” with the Central Georgia Partnership, agreeing to pay the organization $1 million to customize the interior of the Promise Center building and provide up to $325,000 per year for 10 years for costs and services incurred in implementing the Promise Neighborhood program.

The payments were in addition to the $575,000 per year for 10 years that the school board had agreed to pay to rent a portion of the Promise Center from the organization.

Three days after the school system paid the $1 million to the Central Georgia Partnership, the partnership gave Positiventures a $950,000 check. About a week later, Positiventures gave a $100,000 check to Knowles’ Tallahassee law firm.

Whitby and Dallemand had concerns about Whitby directly paying Dallemand the first $100,000 check, and Whitby suggested that a new company be formed to route the money to Dallemand.

Until the company was formed, Knowles was used as a “middleman” to pass money through to the superintendent. Dallemand had met Knowles at an event in Tallahassee and connected him with Whitby.

Knowles gave Dallemand the first $100,000 check in or around Tifton, a couple hours south of Macon. The check was written from one of Knowles’ law firm accounts. Knowles wrote “Trust Refund” on the memo line.

With the check, Knowles also gave Dallemand a letter that said the $100,000 was being returned as money Dallemand had put into Knowles’ trust account to buy a house, although Dallemand had never used Knowles as an attorney or given him money to keep in trust for any purpose.

Sometime toward the end of 2012, Knowles approached Dallemand about possible construction projects between Pinnacle and the Bibb County school district. Knowles offered Dallemand stock in Pinnacle if he was able to secure future construction contracts for the company with the school district.

In November 2012, Knowles sent Dallemand an email with a draft stock purchase agreement that involved Dallemand’s obtaining an unspecified amount of stock for $500,000. In December 2012, Knowles sent two more draft stock purchase agreements that indicated Dallemand would get a 24 percent business interest in Pinnacle for $500,000 if he approved a revised agreement.

Although the purchase agreements indicated the then-superintendent would pay $500,000 for the stock, Dallemand had conversations with Knowles that he wouldn’t have to pay any money. The stock would be obtained if he helped Pinnacle get contracts with the Bibb school system.

The school district didn’t enter into any construction contracts with Pinnacle, so Dallemand never obtained stock in the company.

Proscenium software

Also in late 2012, Whitby and Knowles approached Dallemand about a transaction that would involve Pinnacle’s being the company “on paper” selling a software program to the school system, according to the indictment.

The indictment goes on to say:

Dallemand was promised $500,000 for his role in pushing through the software purchase.

The school system wired $3.2 million to Pinnacle on Dec. 19, 2012, for the software, and Pinnacle gave Knowles’ law firm $100,000 on Jan. 8, 2013. Then, two days later, the firm gave Postiventures $100,000.

On Jan. 29, 2013, Positiventures gave the Central Georgia Partnership $950,000.

Sometime after the $3.2 million payment to Pinnacle, Whitby, Knowles, Dallemand and Pinnacle’s “chief visionary,” identified in the indictment only as C.M., met to discuss money due to each of them after the transaction.

In 2015, long after Dallemand had left his job as Bibb’s superintendent, he contacted Knowles to ask about the money owed to him from the Proscenium purchase, and Knowles told him there wasn’t any money left to pay him since Knowles had to pay taxes and hire people to work on the project.

Continued payments

The indictment alleges that Whitby and Dallemand established a new corporation, Belhannes LLC, to allow Whitby to transfer money to Dallemand for his support of the Promise Neighborhood initiative.

According to the indictment:

Dallemand received nine payments between Aug. 15, 2013, and June 25, 2016, from Belhannes in checks or money orders totaling $337,400.

As recently as April 2, 2017, Whitby met with Dallemand at a south Georgia restaurant and gave Dallemand $24,000 in cash as an installment on payments promised to him from the Promise Neighborhood arrangement.

During the meeting, Whitby said he was still owed $1.2 million from deals involving Dallemand and the school district. Whitby expressed concern that if Dallemand and others named in the school system’s lawsuit had to pay out judgments, he might not get the money owed to him.

Whitby told Dallemand that the money Whitby intended to use to pay Dallemand's annual $100,000 payments was supposed to come from the yearly maintenance fee the school district was going to pay toward the Promise Center.

After Dallemand left as superintendent, however, the school district canceled the maintenance payments.

Mayor Robert Reichert, who has worked closely with Whitby on the Industrial Authority board, said in a statement Friday that it was unfortunate that charges have been filed against Whitby.

Reichert was a staunch supporter of the Promise Neighborhood initiative.

“It is regrettable that charges have been filed against Cliffard Whitby in connection with the Promise Neighborhood project of 2012, which was an effort to bring together many community agencies to improve educational outcomes by focusing those services in our most needed areas,” the mayor said in an emailed statement.

Bibb school board member Lester Miller said he had mixed emotions about the indictments and Dallemand’s guilty plea. He said he’s glad the truth is closer to coming out.

“On the other hand, it’s political corruption and that’s not a good thing,” Miller said. “It’s a black eye for the community, but it’s something that had to happen.”

Miller said he ran for a school board post in 2012 aiming to address some of the issues he suspected were happening within the school district.

He also had a warning for others who might be involved in the case.

“It’s a far-reaching situation,” he said. “There are still a lot of people that can help themselves out by coming forward. I would suggest … they be the first ones to give the information because once it’s all told, they’ll be left out in the cold themselves.”

This story was originally published August 11, 2017 at 2:13 PM with the headline "Dallemand took more than $400,000 in bribes from Cliffard Whitby, plea agreement says."