Monticello High School’s athletic director and the vice president of a local sports equipment store admitted in federal court today that they worked together with another supplier to rig bids for the high school’s athletic equipment.
U.S. Attorney Timothy Heaphy said in a news release Friday that between August 2008 and August 2010, Fitzgerald Arnette Barnes, who also serves as vice chairman of the Louisa County Board of Supervisors, worked with David Mayhew Deane, vice president of Charlottesville retailer Downtown Athletic, and Charles Albert Phillips, another supplier in Annapolis, to ensure that Downtown Athletic was the lowest of the three required bidders for the school’s sports equipment contracts.
“Over the course of several years, Barnes directed Deane to obtain and submit to Monticello High School the three required bids, one bid for Downtown Athletic and two representing other, fictitious retailers, ensuring Downtown Athletic would be awarded the contract,” the news release said. On several occasions, Deane asked Phillips to submit false bids that were higher than his.
“These three individuals worked together to circumvent these important procurement regulations by creating dummy bids for athletic apparel and equipment,” Heaphy said.
Albemarle County Schools spokesman Phil Giaramita said the division was informed of an FBI investigation into suspicious procurement practices in 2010. Barnes was not confronted, he said, because “they were allegations that were unproven at the time,” and the division “didn’t want to interfere with the investigation.”
Shortly after officials learned of the investigation, the division met with athletic directors and adjusted its policy on procuring bids, Giaramita said. Now, bids are handled by the county’s procurement and purchasing office. After a competitive bid process in 2010, two companies were approved as sports equipment suppliers for all Albemarle County schools. One of those suppliers is Downtown Athletic, said Giaramita, but the division is reviewing that contract.
“The process is a lot tighter than it was, and there are more eyes on these bids and contracts,” Giaramita said. “We’re confident that the changes made back in 2010 have provided a level of financial control that’s been very strong.”
A statement released by the division after the plea said that school officials “do not believe there was any financial injury to the school division as the result of the activities that resulted in today’s announcement.” The statement said court proceedings indicated Barnes “did not realize any personal gain from his actions.”
The division has purchased approximately $364,000 worth of sports equipment from Downtown Athletic since 2010, Giaramita said, about $250,000 of which was bought since Albemarle entered its current contract with the company in 2013.
Barnes did not immediately return calls for comment. Maureen Deane, president of Downtown Athletic and sister of David Deane, referred a reporter to Susan Payne, head of Charlottesville public relations firm Payne, Ross and Associates.
A statement released by the firm on behalf of the company made no mention of the creation of fake bids, but said that “Downtown Athletic did not receive any money that it should not have received, and Monticello High School was not charged higher prices than it should have been.” The statement said the case was “not about financial loss, but about sloppy procedures and sloppy implementation. Those procedures have been changed, both at Albemarle County and at Downtown Athletic, and the relationship between these parties now complies with all applicable laws.”
“I apologize to the county schools administration for having taken these shortcuts in procurement procedures,” David Deane said in the statement. “Downtown Athletic values its relationship with the Albemarle County schools and our whole community. This will not happen again.”
The three men turned themselves in Friday morning, according to a spokesman for the U.S. Attorney’s office. Barnes is on administrative leave with pay while his employment status is reviewed, said Giaramita. Barnes was ordered to pay a $750 fine. Deane will pay a $1,500 fine, and Phillips a $350 fine.
This story has been updated with additional figures since its original posting.
The full text of the press release from the U.S. Attorney’s Office is as follows:
CHARLOTTESVILLE, VIRGINIA – Three men, including the athletic director at Monticello High
School and the vice president of Downtown Athletic Store, pled guilty this morning in the United States District Court for the Western District of Virginia to a federal misdemeanor charge related to bid rigging.
In separate hearings this morning in Federal Court, Fitzgerald Arnette Barnes, 50, of Louisa, Va., David Mayhew Deane, 54, of Keswick, Va., and Charles Albert Phillips, 48, of Annapolis, Md., waived their right to be indicted and pled guilty to a one-count Information charging each with one count of knowingly embezzling money belonging to the United States.
“When school officials spend taxpayer dollars, they must comply with procurement rules that encourage competition and ensure that schools obtain the best possible price,” United States Attorney Timothy J. Heaphy said today. “These three individuals worked together to circumvent these important procurement regulations by creating dummy bids for athletic apparel and equipment. This case demonstrates our continuing commitment to ensuring that public funds are responsibly handled.”
Barnes, the athletic director at Monticello High School, has admitted to being involved with Deane, the Vice President of Downtown Athletic, and Phillips, the Vice President of Sales for Team Distributor, a sports apparel retailer in Maryland, in a scheme to fix bids on athletic apparel purchased for Monticello High School.
The three have admitted that between August 2008 and August 2010 they fraudulently created price bids that were used as the basis for contracts involving the sale of athletic equipment and apparel from Downtown Athletic to Monticello High School. Albemarle County policy requires a bid from three different vendors when entering into contracts with private companies for goods and services which cost more than $1000.
Over the course of several years, Barnes directed Deane to obtain and submit to Monticello High School the three required bids, one bid for Downtown Athletic and two representing other, fictitious retailers, ensuring Downtown Athletic would be awarded the contract. On several occasions, Deane contacted Phillips and asked him to also submit false bids to Monticello High School that were higher than the bid submitted by Downtown Athletic Store. After receiving the two false and one authentic bid, Barnes awarded multiple contracts for the sale of athletic apparel and equipment to Deane and Downtown Athletic.
Following today’s guilty plea hearing, all three defendants were sentenced. Phillips was ordered to pay a $350 fine, Barnes was ordered to pay a $750 fine and Deane was ordered to pay a $1,500 fine.
The investigation of the case was conducted by the Federal Bureau of Investigation. United States Attorney Timothy J. Heaphy and Assistant United States Attorney Ronald Huber prosecuted the case for the United States.