The U.S. Attorney’s Office for the Northern District of Georgia announced, in separate cases, two convictions yesterday (Jan. 16, 2018) involving contracting bribes and kick-backs within two different units of metro Atlanta government.
- Adam L. Smith, the former Chief Procurement Officer for the City of Atlanta, was sentenced to federal prison for conspiring to accept more than $40,000 in bribe payments from a vendor who obtained millions of dollars in city contracts.
- Joseph J. Erves, former MARTA Senior Director of Operations, was sentenced to two years, nine months in federal prison for orchestrating a false invoicing scheme that resulted in MARTA paying more than $500,000 for maintenance work that was never performed and for then funneling most of that money into his personal bank accounts.
According to U.S. Attorney Byung J. “BJay” Pak, from at least 2015 to January 2017, Smith met privately with a vendor on multiple occasions, frequently at Atlanta-area restaurants. During these meetings, Smith and the vendor discussed Atlanta procurement projects, bids, and solicitations. Often at the time of these meetings, the vendor was actively seeking contracts, projects, and work with Atlanta. After most of these meetings, the vendor and Smith met in the restaurant’s bathroom, where the vendor paid Smith approximately $1,000 in cash. In return for the bribe payments, the vendor expected Smith to use his position and power to assist the vendor with contracting/procurement with Atlanta and to furnish the vendor with future benefits and favors when needed.
In the case involving the Metropolitan Atlanta Rapid Transit Authority (MARTA), beginning in 2010, according to the U.S. Attorney’s office, Erves retained three different vendors purportedly to perform maintenance projects for MARTA. From approximately June 2010 to December 2016, Erves had fake invoices prepared on behalf of the three vendors for more than 40 maintenance projects for which no work was performed. Erves then used the false invoices as bases to authorize payments to the three vendors. In many cases, Erves personally approved payments to the vendors knowing that the vendors had not performed any work for MARTA. After receiving payment, the three vendors funneled most of the money they received from MARTA into Erves’s personal bank accounts. Subsequently, Erves used the money deposited into his accounts to pay personal expenses, such as multiple purchases at high-end department stores and the purchase of a Porsche 911. Based on Erves’s authority and representations, MARTA paid the three vendors more than $500,000 for maintenance projects where no work was actually performed.
Smith, 53, of Atlanta, GA, was sentenced to two years, three months in prison, three years of supervised release, ordered to pay $44,000 in restitution, and a $25,000 fine. On September 25, 2017, Smith pleaded guilty to conspiratorial bribery. According to press reports, there is an ongoing investigation of matters related to the Smith case by the U.S. Attorney’s Office, the Federal Bureau of Investigation, and the Internal Revenue Service.
Erves, 53, of Lithonia, GA, was sentenced to two years, nine months in federal prison, and ordered to pay $522,825.45 in restitution. Erves also previously pleaded guilty (on August 24, 2017) to one count of Federal Program Theft. The Federal Bureau of Investigation and the MARTA Police Department are continuing an investigation of this case.
Statement from the U.S. Attorney’s Office regarding the Smith case: https://www.justice.gov/usao-ndga/pr/city-atlanta-s-former-chief-procurement-officer-adam-smith-sentenced-federal-prison
Statement from the U.S. Attorney’s Office regarding the Erves case: https://www.justice.gov/usao-ndga/pr/senior-marta-executive-sentenced-federal-prison-causing-marta-pay-500000-work-never