Private prison firms deny wrongdoing in Epps kickback scheme

Print More

R.L. Nave, Mississippi Today

Attorney General Jim Hood announced lawsuits against 25 companies and individuals for their roles in a prison bribery scandal.

Several of the companies being sued by Mississippi’s top prosecutor deny allegations they participated in a bribery scheme that brought down the state’s corrections commissioner.

Last week, Attorney General Jim Hood said his office had filed lawsuits against 25 companies and individuals he says illegally profited from a plot former corrections Commissioner Chris Epps orchestrated while leading the agency.

In all, Hood has filed 11 civil RICO (Racketeer Influenced and Corrupt Organizations Act) lawsuits against entities that he says “defrauded” Mississippians “through a pattern of bribery, kickbacks, misrepresentations, fraud, concealment, money laundering and other wrongful conduct.”

Two of the companies are among the largest private-prison operators in the nation, including one that continues to do business in Mississippi.

Hood’s complaint against Utah-based Management and Training Co. (MTC), which operates three facilities on behalf of the state of Mississippi — in Lauderdale, Wilkinson and Marshall counties — charges that the company had a “backroom” relationship with Epps and Cecil McCrory, the Rankin County businessman and former state official recently sentenced for his role as Epps’ co-conspirator.

Hood said MTC had every reason to believe that the consulting fees the company paid to McCrory were being used to pay bribes and kickbacks to Epps on contracts worth $114 million.

In a statement, MTC spokesman Issa Arnita said the company is committed to integrity and honesty in all its dealings.

“MTC was unaware of any wrongdoing or illegal activity during the time we were awarded contracts to operate correctional facilities for the Department of Corrections,” Arnita said.

“We have, and will continue to operate the three correctional facilities in a safe and secure manner for the taxpayers of Mississippi. We are confident that after a thorough review of the facts, it will become clear MTC has had no involvement in or knowledge of any wrongdoing,” Arnita said.

Hood makes similar allegations against Boca Raton, Fla., based-GEO Group and a company it acquired that is now defunct, Cornell Companies. GEO Group, the nation’s second largest private-corrections firm, pulled out of Mississippi 2013. Hood asserts that the GEO Group should have known the consulting fees it paid to McCrory were used to pay kickbacks to Epps for $256 million in contracts with the state.

Pablo E. Paez, a vice president with the GEO Group, said the company was a partner with the state from 1994 to 2012.

“During our entire tenure as a service provider to the state, our company was never aware of any improprieties within the Mississippi Department of Corrections. In fact, since the federal criminal allegations against Epps and McCrory first surfaced, our company has openly and proactively cooperated with federal authorities.”

“We believe the allegations against GEO have no merit, and we intend to vigorously defend our company with respect to this action, which the State has also brought against a broad range of companies and individuals,” Paez said in an emailed statement to Mississippi Today.

Gabriel Austin

Former state prisons chief Christopher Epps

The federal government indicted Epps in 2014. Six people, including Epps and McCrory, have pleaded guilty for various roles in procuring contracts whose value totaled between $800 million and over $1 billion. Epps is awaiting sentencing.

Hood wants those involved to pay back the value of the contracts plus attorneys and other fees because, he contends, the companies would not have been awarded state business if not for participating in the bribery scheme.

Several other companies Mississippi Today contacted said they would cooperate with the investigation but declined to comment further, citing the pending litigation.