FOR IMMEDIATE RELEASE DAVILYN WALSTON
WEDNESDAY, APRIL 19, 2017 PUBLIC INFORMATION OFFICER
Man Guilty in Connection with Denton County Highway Expansion Fraud
SHERMAN, Texas – A 34-year-old Dallas
man has pleaded guilty to fraud in connection with a Denton County highway
expansion project in the Eastern District of Texas, announced Acting U.S.
Attorney Brit Featherston today.
Wade Wylie Blackburn, 33, pleaded
guilty to conspiracy to commit mail fraud today before U.S. Magistrate Judge Christine
to information presented in court, from 2008 to 2011, Blackburn conspired with Kevin
James Bollman to defraud the Texas Department of Public Safety (TXDOT.) Blackburn and Bollman raised investment money
and purchased Right-of-Way (ROW) along Interstate Highway 35 East in Denton
County with the intent of quickly re-selling the ROW land tracts to TXDOT.
acquired ROW through one of three methods:
(1) Condemnation (normal acquisition); (2) Early Acquisition (EAQ); and
(3) Advanced Acquisition (AAQ) through option contracts. The first two methods required environmental
clearances before TXDOT was permitted to acquire the ROW and pay the landowner. The timing on these acquisitions, including
the timing of the environmental clearance issued by the federal government, is
unpredictable and often takes years to accomplish. The third method – the AAQ method through
option contracts – permitted TXDOT to execute an option contract before environmental
clearances were obtained, then pay the landowners a significant up-front option
fee designed to keep the landowner from transferring or developing the property
on the ROW that would later result in TXDOT likely having to pay more for the
ROW. The landowner agreed not to develop
the property in exchange for the up-front option fee, then closed on the sale
and received the remainder of the purchase money after the environmental
clearances were obtained.
As part of the scheme, Blackburn
and Bollman intentionally caused false material information to be submitted to
the TXDOT appraiser regarding, among other things, their development plans for
the various properties. Blackburn and
Bollman made these representations to the TXDOT appraiser even though they knew
they had no intent to develop any of the properties. Blackburn also wrote a letter with material
false statements to individuals at TXDOT.
It claimed they were being forced to forego imminent development plans
for the tracts, had been unable to successfully secure building permits, and
were experiencing financial hardships as a result. Blackburn and Bollman also made false
material oral misrepresentations to officials of TXDOT when they told them that
they were experiencing financial hardships as a result of not being able to
proceed with immediate development of the tracts, and that TXDOT should use the
AAQ method to immediately purchase the tracts.
Blackburn and Bollman made the material misrepresentations to TXDOT so
they could ultimately benefit from the up-front option fee rather than wait for
TXDOT acquisition by their usual course of condemnation. TXDOT used option contracts to purchase the
tracts for higher prices than what Blackburn and Bollman paid for the tracts.
Blackburn was indicted by a federal grand jury in April 2016.
“Government programs are designed
to benefit the citizens, in this case, to build critical infrastructure to be
used by all,” said Acting U.S Attorney Featherston. “Taxpayers must trust that state and federal
funds for building roads and highways are being used and expended in a
judicious manner, and not lost to greed and manipulation. Blackburn and
others used a complex scheme to defraud the taxpayers, and in doing so, corrupt
the process designed to build roads for our citizens.”
federal statutes, Blackburn faces up to five years in federal prison. The maximum statutory sentence prescribed by
Congress is provided here for information purposes, as the sentencing will be
determined by the court based on the advisory sentencing guidelines and other
statutory factors. A sentencing hearing
will be scheduled after the completion of a presentence investigation by the
U.S. Probation Office.
case is being investigated by the Federal Bureau of Investigation and
prosecuted by Assistant U.S. Attorneys Christopher A. Eason and J. Andrew