After cross-examining Agent Burns on Tim Willis's compensation, Scholl then went on to discuss Joe Carson's salary.
Scholl has spent most of the afternoon discussing the finances of the operation and when people's service agreements started. His reasoning for doing this will probably be revealed later in the case, but for now we'll continue with Carson.
Mr. Joe Carson (aka Mr. Carol the president of E-Cycle) is a retired agent. He retired in 1998, but still works with the FBI on special projects.
"Agents can only be an agent until age 57," says Burns. "He has a contract of employee."
Carson's Service Agreement (Exhibit 71) says he was paid up to $5,000 a month plus travel expenses for his services. The agreement was signed on March 5, 2004 after E-Cycle began, but they started paying Carson in January 2004.
"I believe we started talking to him in the mid-Fall. He gave us some ideas that were successful in the past," says Burns.
Operation Tennessee Waltz turned out to have more subjects involved in the corruption than the FBI originally in thought. It was then that Carson's role expanded and his compensation increased to $7000 a month.
Wednesday, April 11, 2007
When will the big bucks stop?
In March 2003, the FBI determined Timothy Willis would be in long time employment with the US Government.
Burns agreed with Scholl that a service contract is important, but Willis started making his $6000.00 a month compensation before he signed the agreement. According to Burns, once a service agreement is signed, it doesn't have to have a set end date.
"I know in the manual there is not a set time. I know in some of them there is a set clause of when they expire," says Burns.
Willis's contract has no set end date.
"That agreement will continue until whenever you guys say stop?" asks Scholl.
"That's correct," says Burns.
Willis continued receiving $6000 until August 2005. The indictments occured in May 2005. According to Agent Burns, Willis was out of Memphis around May 15 about a week before the indictments came down --as per the FBI.
"We were in contact with him to make sure he got out," says Burns.
Up until today, Willis is still being paid monthly compensation from the FBI. Burns says it's because they still need him to at their beck and call.
"We would send him transcripts for review," says Burns. "We asked him to be available to come to Memphis whenever we needed him."
When asked how often he needs to come to Memphis, Burns responded with, "He probably averaged monthly."
Burns agreed with Scholl that a service contract is important, but Willis started making his $6000.00 a month compensation before he signed the agreement. According to Burns, once a service agreement is signed, it doesn't have to have a set end date.
"I know in the manual there is not a set time. I know in some of them there is a set clause of when they expire," says Burns.
Willis's contract has no set end date.
"That agreement will continue until whenever you guys say stop?" asks Scholl.
"That's correct," says Burns.
Willis continued receiving $6000 until August 2005. The indictments occured in May 2005. According to Agent Burns, Willis was out of Memphis around May 15 about a week before the indictments came down --as per the FBI.
"We were in contact with him to make sure he got out," says Burns.
Up until today, Willis is still being paid monthly compensation from the FBI. Burns says it's because they still need him to at their beck and call.
"We would send him transcripts for review," says Burns. "We asked him to be available to come to Memphis whenever we needed him."
When asked how often he needs to come to Memphis, Burns responded with, "He probably averaged monthly."
The movie connection
The movie industry played a role in the Tennessee Waltz case. In addition to saying he had connections in the entertainment industry, informant Tim Willis actually produced a movie not related to E-Cycle or the corruption sting.
A couple the scenes were filmed in the E-Cycle office. When the FBI agent asked him about why he filmed the movie and why he chose that particular location, he said he did to "make the office look busy."
An actual film was made and released. It was called "Street Wise". The FBI agents had no idea Willis was doing this. They found out about it later. Willis claimed he didn't think they would mind --as he was making the business look active.
E-Cycle had nothing to do with any kind of production for the film.
A couple the scenes were filmed in the E-Cycle office. When the FBI agent asked him about why he filmed the movie and why he chose that particular location, he said he did to "make the office look busy."
An actual film was made and released. It was called "Street Wise". The FBI agents had no idea Willis was doing this. They found out about it later. Willis claimed he didn't think they would mind --as he was making the business look active.
E-Cycle had nothing to do with any kind of production for the film.
The rules of the game
Tim Willis didn't just get paid to work for the FBI, he also had to adhere to their guidelines.
The guidelines include(amongst others):
1) Can't conduct any unlawful acts
2) Can't present themselves as employees of the FBI
3) Can't disclose information
However, Willis smoked pot with an elected official in 2004. The FBI confronted Willis in 2005 about the drug use and he admitted to act. The FBI did not do anything about the act.
According to Burns, the way they found out about the use of marijuana was not through video surveillance, but through a rumor. A woman approached one of the undercover agents and mentioned that Willis was distributing drugs. The FBI confronted Willis about this accusation. He denied it and said he only "smoked" marijuana at the elected official's home. They did not administer a drug test.
The guidelines include(amongst others):
1) Can't conduct any unlawful acts
2) Can't present themselves as employees of the FBI
3) Can't disclose information
However, Willis smoked pot with an elected official in 2004. The FBI confronted Willis in 2005 about the drug use and he admitted to act. The FBI did not do anything about the act.
According to Burns, the way they found out about the use of marijuana was not through video surveillance, but through a rumor. A woman approached one of the undercover agents and mentioned that Willis was distributing drugs. The FBI confronted Willis about this accusation. He denied it and said he only "smoked" marijuana at the elected official's home. They did not administer a drug test.
The going rates of FBI informants
Willis was arrested the first time in February 2001. He bought a house in Harbor Town in May 2001. This was a big expense, so the FBI paid him to "keep the lights on".
"Six thousand dollars covered everything," says Burns. "...I didn't go down very thoroughly to see what all his expenses were."
Burns says they paid him the salary, but didn't monitor where Willis spent the money. It could have gone on his mortgage, food, gas or anything else.
"I wouldn't say it's his job," says Burns. "He needed to be available whenever we needed him."
But according to Burns, Willis still could have taken another job. He could do anything he wanted as long as he made the FBI aware of what he was doing.
In the meantime, Willis was busy recording conversations for the FBI before E-Cycle was even approved. Burns says the "higher ups" were aware of what was going on. The proposal was finally approved sometime in February 2004 - either 2-2 or 2-11 says Burns.
The first year Willis earned $34,000 working for the FBI. In 2004, Willis made $77,000, not including the $16,000 of expenses that he incurred eating at restaurants and staying at hotels.
"Six thousand dollars covered everything," says Burns. "...I didn't go down very thoroughly to see what all his expenses were."
Burns says they paid him the salary, but didn't monitor where Willis spent the money. It could have gone on his mortgage, food, gas or anything else.
"I wouldn't say it's his job," says Burns. "He needed to be available whenever we needed him."
But according to Burns, Willis still could have taken another job. He could do anything he wanted as long as he made the FBI aware of what he was doing.
In the meantime, Willis was busy recording conversations for the FBI before E-Cycle was even approved. Burns says the "higher ups" were aware of what was going on. The proposal was finally approved sometime in February 2004 - either 2-2 or 2-11 says Burns.
The first year Willis earned $34,000 working for the FBI. In 2004, Willis made $77,000, not including the $16,000 of expenses that he incurred eating at restaurants and staying at hotels.
The informant's criminal past
Tim Willis worked closely with the FBI to set up the Tennessee Waltz Sting, but who is Tim Willis and what is his role in this investigation?
Scholl brings up Willis's past. Before working as a "cooperating witness", Willis was arrested in a kick back situation at Juvenile Court, he also committed perjury in front of a grand jury in Memphis by lying, and he committed one other criminal offense. Willis was facing jail time for all these offenses.
The FBI approached Willis in December 2002. In 2003, they discussed his role in the different schemes and then began paying him $5000 a month in May 2003. Before that they reimbursed his expenses. Apparently, Willis would come to Memphis, meet with state officials and record their conversations over drinks or dinner. He began this early February 2003.
The first reimbursment for $85.10 occurred on March 6, 2003 (Exhibit #66). By the end of March, he had expensed nearly $2000.00.
"Some of that was for lodging," says Burns. "He stayed with another elected official...I think they split the room."
E-Cycle was not in existence yet. Willis's rate increased to $6000.00 once E-Cycle was officially in place.
"He didn't have much money at that time. That's one of the things he came to us about," says Burns. "...after he got out of prison he was not doing well at all."
The FBI wanted to keep up Willis's image as a successful lobbyist - the image he had before his prison time.
Scholl brings up Willis's past. Before working as a "cooperating witness", Willis was arrested in a kick back situation at Juvenile Court, he also committed perjury in front of a grand jury in Memphis by lying, and he committed one other criminal offense. Willis was facing jail time for all these offenses.
The FBI approached Willis in December 2002. In 2003, they discussed his role in the different schemes and then began paying him $5000 a month in May 2003. Before that they reimbursed his expenses. Apparently, Willis would come to Memphis, meet with state officials and record their conversations over drinks or dinner. He began this early February 2003.
The first reimbursment for $85.10 occurred on March 6, 2003 (Exhibit #66). By the end of March, he had expensed nearly $2000.00.
"Some of that was for lodging," says Burns. "He stayed with another elected official...I think they split the room."
E-Cycle was not in existence yet. Willis's rate increased to $6000.00 once E-Cycle was officially in place.
"He didn't have much money at that time. That's one of the things he came to us about," says Burns. "...after he got out of prison he was not doing well at all."
The FBI wanted to keep up Willis's image as a successful lobbyist - the image he had before his prison time.
Drilling the FBI on guidelines
The FBI guidelines say there needs to be pre-disposition before they can investigate a public official. But according to Burns, there is no proposal needed to start investigating someone if the undercover operation has already been approved and according to Burns, he was aware of 3 past investigations of Ford before their first meeting in April 18, 2004.
While they don't need approval to start investigating individuals, the FBI did have strict guidelines. They weren't allowed to let the legislature become a state law or have it hit the Senate floor. They had to get authority for bribe payments and they needed a service agreement with the undercover informant every six months. The informant in this case was Timothy Willis.
January 2004 was the beginning of operation.
While they don't need approval to start investigating individuals, the FBI did have strict guidelines. They weren't allowed to let the legislature become a state law or have it hit the Senate floor. They had to get authority for bribe payments and they needed a service agreement with the undercover informant every six months. The informant in this case was Timothy Willis.
January 2004 was the beginning of operation.
Cross Examining FBI Agent Burns
We're back from lunch and now that all the transcripts have been entered into evidence by the prosecutor, we can move on to Mike Scholl's cross examination of Agent Burns.
Before the FBI can start an undercover investigation a set of reports have to go through several levels of approval, but according to Burn you don't need approval to make recordings as long as you have local approval.
For E-Cycle get started the FBI put together a written proposal. Included in it were the finances, goals and objectives, prior evidence of criminal wrong-doing and which individuals were thought to be involved in the wrong-doing.
They also have to show evidence that the wrong-doing exists, but the type of evidence varies.
"There appears to be some evidence that this person is pre-disposed to doing criminal activity," says Burns.
Burns says Ford was not one of these 'wrong-doers' that they had evidence on prior to the undercover operation, unlike Roscoe Dixon who they did have some indication of wrong-doing.
This is when Scholl brings up a statement from the Roscoe Dixon trial where Agent Burns was asked:
"So you can't even record or operate against a public official unless there is some predication?"
During the Dixon trial, Agent Burns replied, "Yes, that is correct."
Before the FBI can start an undercover investigation a set of reports have to go through several levels of approval, but according to Burn you don't need approval to make recordings as long as you have local approval.
For E-Cycle get started the FBI put together a written proposal. Included in it were the finances, goals and objectives, prior evidence of criminal wrong-doing and which individuals were thought to be involved in the wrong-doing.
They also have to show evidence that the wrong-doing exists, but the type of evidence varies.
"There appears to be some evidence that this person is pre-disposed to doing criminal activity," says Burns.
Burns says Ford was not one of these 'wrong-doers' that they had evidence on prior to the undercover operation, unlike Roscoe Dixon who they did have some indication of wrong-doing.
This is when Scholl brings up a statement from the Roscoe Dixon trial where Agent Burns was asked:
"So you can't even record or operate against a public official unless there is some predication?"
During the Dixon trial, Agent Burns replied, "Yes, that is correct."
We're watching you
Burns says the reason the cameras were put in place was because they were sure bribes would be taking place.
Both E-Cycle locations had cameras and recording equipment set up in their offices. There was up to three cameras in the Memphis office and two in Nashville. In Memphis there was a camera located above the desk and two on the side for multiple views.
Burns says Ford was paid a series of bribe payments. The first one took place on August 19, 2004. Naturally, with all the cameras around the agents tried to get as many of the bribe payments on tape as possible -- including the August bribe.
The second bribe occurred on September 17, 2004. It too is caught on tape and entered as evidence. At this exchange, Burns says McNeil gave Ford $5000.
On October 15, 2004, Ford accepted a third bribe --again the FBI agents have it on tape and it was entered as evidence. Burns says that between the second payment in August and the third bribe, Ford did some work for them.
"We directed the uncover agent to direct Mr. Ford to amend the legislation to further benefit the undercover company," says Burns.
The amendments were made. Burns says there was language added and other parts removed.
On November 19, 2004, Ford accepted another bribe of $5000 at the Memphis E-Cycle office. This two was caught on tape.
Both E-Cycle locations had cameras and recording equipment set up in their offices. There was up to three cameras in the Memphis office and two in Nashville. In Memphis there was a camera located above the desk and two on the side for multiple views.
Burns says Ford was paid a series of bribe payments. The first one took place on August 19, 2004. Naturally, with all the cameras around the agents tried to get as many of the bribe payments on tape as possible -- including the August bribe.
The second bribe occurred on September 17, 2004. It too is caught on tape and entered as evidence. At this exchange, Burns says McNeil gave Ford $5000.
On October 15, 2004, Ford accepted a third bribe --again the FBI agents have it on tape and it was entered as evidence. Burns says that between the second payment in August and the third bribe, Ford did some work for them.
"We directed the uncover agent to direct Mr. Ford to amend the legislation to further benefit the undercover company," says Burns.
The amendments were made. Burns says there was language added and other parts removed.
On November 19, 2004, Ford accepted another bribe of $5000 at the Memphis E-Cycle office. This two was caught on tape.
Numerous recordings entered into evidence
A number of the recordings were then entered in as evidence.
Exhibit 1: Transcript
Transcript that Agent Burns prepared from conversations recorded in April.2004
Exhibit 2 and 2A:
Transcript and tape of telephone conversation that took place between John Ford and McNeil on May 20, 2004
Exhibit 3 and 3A:
Transcript and tape of telephone conversation that took place between John Ford and McNeil on May 28,2004
Exhibit 4 and 4A:
Transcript of conversation that took place in Miami, Florida between Ford and McNeil
According to Burns, the Miami Florida convesation took place on a yacht. This was social event that took place while they were there. The yacht was owened by E-Cycle to try to portray to the subjects the success of the companies.
Burns says invitations to Miami were extended to most of the subjects of the investigation but only Charles Love and John Ford actually attended.
The yacht was actually obtained through a drug trafficing operations and is used in many undercover operations.
More transcripts of Ford's secretly recorded conversations were entered into evidence. In total, they entered 65 transcripts.
Exhibit 1: Transcript
Transcript that Agent Burns prepared from conversations recorded in April.2004
Exhibit 2 and 2A:
Transcript and tape of telephone conversation that took place between John Ford and McNeil on May 20, 2004
Exhibit 3 and 3A:
Transcript and tape of telephone conversation that took place between John Ford and McNeil on May 28,2004
Exhibit 4 and 4A:
Transcript of conversation that took place in Miami, Florida between Ford and McNeil
According to Burns, the Miami Florida convesation took place on a yacht. This was social event that took place while they were there. The yacht was owened by E-Cycle to try to portray to the subjects the success of the companies.
Burns says invitations to Miami were extended to most of the subjects of the investigation but only Charles Love and John Ford actually attended.
The yacht was actually obtained through a drug trafficing operations and is used in many undercover operations.
More transcripts of Ford's secretly recorded conversations were entered into evidence. In total, they entered 65 transcripts.
The secret recordings
The secret video tapes and recordings will play a role in the evidence the jury will see during the John Ford Trial.
"They are essential to what we use to document and gather information," says Burns when asked about the recordings. "In this case we had the undercover officers wired up with cameras."
The also used video cameras that they placed on their bodies and cell phone recordings.
"The undercover agents were provided cellular phones and if they received a call from Ford or any other person under investigation, they could press a button and record the call" says Burns.
In February 2005, the FBI obtained the approval from the courts to use wire taps on Mr. Ford's phone.
After the recordings were made, they were given to Burns or another agent who would then create the evidence copy.
LC McNeil was the agent primary responsible for the case.
Burns said that it's common that one subject will lead to other subjects and the case will grow. When asked if there were subjects other than Mr. Ford, Burns responded with "yes, many".
"They are essential to what we use to document and gather information," says Burns when asked about the recordings. "In this case we had the undercover officers wired up with cameras."
The also used video cameras that they placed on their bodies and cell phone recordings.
"The undercover agents were provided cellular phones and if they received a call from Ford or any other person under investigation, they could press a button and record the call" says Burns.
In February 2005, the FBI obtained the approval from the courts to use wire taps on Mr. Ford's phone.
After the recordings were made, they were given to Burns or another agent who would then create the evidence copy.
LC McNeil was the agent primary responsible for the case.
Burns said that it's common that one subject will lead to other subjects and the case will grow. When asked if there were subjects other than Mr. Ford, Burns responded with "yes, many".
Ford's first involvement
The trick behind E-Cycle was that they had to come up with a company where the bill would never make legislation. They would need to use public corruption to get the bill passed.
Ford first became involved on April 19, 2004.
"On that day we had directed Mr. Willis to make a bribe payment to Mrs. Bowers. Mrs. Bowers was to set up a leadership dinner," says Burns.
The dinner was at Morton's steakhouse in Nashville. The FBI had no idea who Bowers was going to invite, but assumed she would have political leaders there. Ford did attend the dinner and again Burns says they had no idea that he would be attending.
During the dinner Ford met McNeil and Carson. He already knew Willis.
Burns was then asked if Ford agreed to sponsor legistlation for E-cycle. The answer was yes, but Ford did more than just agree.
"He drafted legeistlation at E-Cycle's request," says Burns.
According to Burns, Ford agreed to sponsor legislation for E-Cycle, he amended it at their direction and he filed it.
Burns also says Ford was paid ten bribe payments.
Ford first became involved on April 19, 2004.
"On that day we had directed Mr. Willis to make a bribe payment to Mrs. Bowers. Mrs. Bowers was to set up a leadership dinner," says Burns.
The dinner was at Morton's steakhouse in Nashville. The FBI had no idea who Bowers was going to invite, but assumed she would have political leaders there. Ford did attend the dinner and again Burns says they had no idea that he would be attending.
During the dinner Ford met McNeil and Carson. He already knew Willis.
Burns was then asked if Ford agreed to sponsor legistlation for E-cycle. The answer was yes, but Ford did more than just agree.
"He drafted legeistlation at E-Cycle's request," says Burns.
According to Burns, Ford agreed to sponsor legislation for E-Cycle, he amended it at their direction and he filed it.
Burns also says Ford was paid ten bribe payments.
Who is Mr. Willis?
"Extremely bad."
That was the response Agent Burns gave when asked about Mr. Willis's financial situation before agreeing to work in Operation Tennessee Waltz.
Tim Willis was the person that brought the state corruption problem to the FBI's attention. He agreed to help the FBI and his role was to introduce the undercover FBI agents to the state legislators. Willis is not an FBI agent and Timothy Willis is his real name.
"We felt it was necessary to compensate Mr. Willis for his role in the undercover investigation," said Burns.
That's because the FBI would not allow him to take other employment during the investigation. They needed him to be available so paid him $6000 a month. This way he could pay his bills on time etc.
After the undercover operation was over, Willis was relocated out of Memphis, Tennessee. He still works with the FBI to testify at hearings, to travel to Memphis, to review recordings he made during.
He's still compensated by the FBI with a fee of $3000.00 a month. Burns says this is dramatically lower to what he was paid when working undercover.
That was the response Agent Burns gave when asked about Mr. Willis's financial situation before agreeing to work in Operation Tennessee Waltz.
Tim Willis was the person that brought the state corruption problem to the FBI's attention. He agreed to help the FBI and his role was to introduce the undercover FBI agents to the state legislators. Willis is not an FBI agent and Timothy Willis is his real name.
"We felt it was necessary to compensate Mr. Willis for his role in the undercover investigation," said Burns.
That's because the FBI would not allow him to take other employment during the investigation. They needed him to be available so paid him $6000 a month. This way he could pay his bills on time etc.
After the undercover operation was over, Willis was relocated out of Memphis, Tennessee. He still works with the FBI to testify at hearings, to travel to Memphis, to review recordings he made during.
He's still compensated by the FBI with a fee of $3000.00 a month. Burns says this is dramatically lower to what he was paid when working undercover.
First Witness: FBI Agent Brian Burns
The first witness called was Brian Burns. He works for the FBI in Memphis and has been a special agent for 8-9 years.
He told the court that the investigation was implemented after they had gathered information from the field that lead them to believe there was some corruption occurring at state level.
When asked if the undercover operation was necessary, Burns responded that yes, it was.
"It allows you to create a fictious company that would be run by undercover agents," says Burns
Burns was then asked if John Ford was one of those who they thought were involved in the state corruption before the undercover operation.
"Absolutely not," says Burns.
Burns was then questioned about E-Cycle and how it worked as an undercover operation. He told them the E-Cycle headquarters were allegedly in Atlanta, GA, but they set up offices in Memphis and Nashville. They also brought in undercover agents to pose as the oweners of the company.
The two main undercover agents were Joe Caroll who played the role of Joe Carson the president of E-Cycle and LC McNeil whose role was the Vice President and co-owner of E-Cycle.
How it worked was that Carson was the money man. He was a venture capitalist who had invested in the music industry and was successful. McNeil on the other hand played the role of someone who had influence in the entertainment business.
Burns says the reason these roles were decided was because E-Cycle was a new venture. They needed a reason for both Caroll and McNeil to come together and entertainment was the way to do it. They were going to use their success in the entertainment business and apply it to the new business model of outdated computer equipment and be successfull there.
There was one other person involved.
"Timothy Willis was a subject of the initial investigation and eventually agreed to cooperate with the FBI," says Burns. "In the initial investigation, we had uncovered what we beleived was a kickback scheme."
He told the court that the investigation was implemented after they had gathered information from the field that lead them to believe there was some corruption occurring at state level.
When asked if the undercover operation was necessary, Burns responded that yes, it was.
"It allows you to create a fictious company that would be run by undercover agents," says Burns
Burns was then asked if John Ford was one of those who they thought were involved in the state corruption before the undercover operation.
"Absolutely not," says Burns.
Burns was then questioned about E-Cycle and how it worked as an undercover operation. He told them the E-Cycle headquarters were allegedly in Atlanta, GA, but they set up offices in Memphis and Nashville. They also brought in undercover agents to pose as the oweners of the company.
The two main undercover agents were Joe Caroll who played the role of Joe Carson the president of E-Cycle and LC McNeil whose role was the Vice President and co-owner of E-Cycle.
How it worked was that Carson was the money man. He was a venture capitalist who had invested in the music industry and was successful. McNeil on the other hand played the role of someone who had influence in the entertainment business.
Burns says the reason these roles were decided was because E-Cycle was a new venture. They needed a reason for both Caroll and McNeil to come together and entertainment was the way to do it. They were going to use their success in the entertainment business and apply it to the new business model of outdated computer equipment and be successfull there.
There was one other person involved.
"Timothy Willis was a subject of the initial investigation and eventually agreed to cooperate with the FBI," says Burns. "In the initial investigation, we had uncovered what we beleived was a kickback scheme."
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