Judge Barbara M.G. Lynn | North Dallas Gazette

(NDG Wire) Monday, U.S. District Judge Barbara M.G. Lynn sentenced two more of the 13 defendants who were convicted in what has become known as the “Dallas City Hall Corruption Case.”

Judge Lynn sentenced Darren L. Reagan, 50, of DeSoto, Texas, to 14 years in federal prison. Reagan, a community activist and the chairman and CEO of the Black State Employees Association of Texas (BSEAT), was convicted at trial in October 2009 on two of four counts charged, including one count of conspiracy to commit extortion and one count of aiding and abetting in extortion of public officials. He was ordered to surrender to the Bureau of Prisons on April 27.

Judge Lynn sentenced Rickey Robertson, 43, of Cedar Hill, Texas, to three years in federal prison. Robertson, a local businessman/car dealer, was convicted at trial on two of three counts charged, including conspiracy to commit extortion and conspiracy to commit money laundering. This morning, Judge Lynn ruled that there was insufficient evidence to show that Robertson knew the funds he received as a part of the scheme were from an illegal source. Robertson was also a principal of RA-MILL, a sham construction firm for which defendant D’Angelo Lee served as a secret partner. Lee was then Mayor Pro Tem Don Hill’s Plan Commissioner. Robertson was also ordered to surrender to the Bureau of Prisons on April 27.

Reagan’s association, BSEAT served as a front for his shakedown schemes. On wiretapped conversations played during trial, Reagan told then Mayor Pro Tem Hill to pull developer Bill Fisher’s contracts off the city council agenda while he made more extortionate demands for money from Fisher. Fisher was working as an FBI informant.

The money laundering conspiracy conviction against Robertson that Judge Lynn overturned, revolved around his acceptance of money related to the purchase of four automobiles, coupled with his willingness to place the title to one of Hill’s BMWs in a name other than Don Hill. Robertson was convicted at trial along with Hill; Hill’s wife, Sheila Farrington; Lee and Reagan of pressuring Fisher for hundreds of thousands of dollars in extortion money.

On Friday, February 26, 2009, Judge Lynn sentenced Hill to 18 years in prison; his wife, Sheila Farrington, to nine years in prison; and D’Angelo Lee to 14 years in prison. Hill was also ordered to pay $112,500 in restitution; Lee was ordered to pay $112,800 in restitution. Hill and Farrington were ordered to surrender to the Bureau of Prisons on April 27. Lee is presently in federal custody.

(NDG Wire) Gladys E. Hodge, also known as “Terri Hodge,” who was to go on trial early next month on charges outlined in a 31-count indictment charging 14 public officials and their associates with various offenses related to a bribery and extortion scheme involving affordable housing developments in the Dallas area, has pleaded guilty, announced U.S. Attorney James T. Jacks of the Northern District of Texas. As a condition of her plea with the government, Hodge, who was elected to the Texas House of Representatives, District 100, in 1996, and re-elected to the same position in 1998, 2000, 2002, 2004, 2006 and 2008, has agreed to resign her office and never seek or hold future public office.

Hodge entered her guilty plea this morning, before U.S. District Judge Barbara M.G. Lynn, to fraud and false statements on an income tax return. She faces a maximum statutory sentence of three years in prison, a $100,000 fine, and restitution to the IRS. At the hearing, Judge Lynn indicated that she would be setting the sentencing date as expeditiously as possible.

According to the factual resume filed in the case, over the course of her tenure as a state representative, Hodge supported Southwest Housing Development Company, Inc. (SWH) developments which, among others, included affordable housing developments in District 100. Co-defendant Cheryl L. Potashnik, the wife of co-defendant Brian L. Potashnik, a real estate developer and the founder, president and a principal of SWH, served in multiple roles in management and development of SWH, including that of chief operating officer and principal of SHW. Cheryl Potashnik pleaded guilty to bribery in connection with benefits given to Hodge by the Potashniks and SWH.

Brian Potashnik also pleaded guilty to bribery of various public officials. Both Potashniks are awaiting sentencing.

According to the factual resume filed, sometime on or before February 27, 2002, Hodge asked Brian Potashnik for assistance in the form of affordable housing for herself within the geographical boundaries of her political district. She indicated that she had financial problems and could not afford to pay the full rate for housing. Beginning in April 2002, the Potashniks made arrangements to provide Hodge with housing in one of SWH’s market-rate affordable housing development units, which was located at Rosemont at Arlington Park in District 100. Hodge moved into the apartment on April 1, 2002, and renewed her lease, at the same rental rate of $200 per month, in November 2002 and again in March 2003. As reflected in the executed lease agreements, the market rate for this unit was $899 per month, and the difference in rent was paid by the Potashniks.

In addition, the Potashniks paid the utility bills on the apartment from their development funds and provided new carpeting for her house located on Abrams Road in Dallas. The carpeting cost $1,995 and was paid for by the construction arm of SWH, a company named Affordable Housing Construction, Inc.

The total value of the rental subsidies, utilities and carpeting provided to Hodge by the Potashniks from 2002 through 2005 was $32,541. None of this amount was included as income on the corresponding federal income tax returns for the tax years in which it was received by Hodge.

The plea documents further state that Hodge had additional income, in tax years 2001 through 2005, totaling $41,465, comprised, in part, of campaign contributions which she used for her own personal benefit and which she did not include as income on the corresponding federal income tax returns for the tax years in which she received it.

Hodge admits that she filed a U.S. Individual Income Tax Return, Form 1040, with the IRS, that she knew she omitted income of $6,914 in 2001; $27,062 in 2002; $13,402 in 2003; $19,908 in 2004; and $6,720 in 2005. Hodge further admits that as a result, she owes the following in taxes (excluding penalties and interest) to the IRS: $1,937 for 2001; $1,496 for 2002; $1,908 for 2003, $3,887 for 2004, and $1,680 for tax year 2005, for a grand total of $10,908.