ANDRE HORNSBY SENTENCED TO 6 YEARS IN PRISON ON FELONY CHARGES INCLUDING FRAUD AND OBSTRUCTION OF JUSTICE

Greenbelt, Maryland - U.S. District Judge Peter J. Messitte sentenced Andre J. Hornsby, age 55, formerly of Mitchellville, Maryland, today to six years in prison followed by three years of supervised release, in connection with his conviction by a federal jury of honest services wire fraud, witness and evidence tampering and obstruction of justice arising from a scheme to cause the Prince George's County Public Schools to award lucrative contracts to benefit close associates and himself, announced United States Attorney for the District of Maryland Rod J. Rosenstein. Judge Messitte also ordered Hornsby to pay fines totaling $20,000 and restitution of $70,000.

United States Attorney Rod J. Rosenstein said, "The evidence in this case demonstrated that Andre Hornsby abused his power for private financial gain, tampered with witnesses and obstructed a federal investigation. Public officials must pursue the public interest and not line their own pockets at taxpayer expense."

Special Agent in Charge of the Baltimore FBI Field Office, Amy Jo Lyons stated, "Mr. Hornsby exploited his position as Chief Executive Officer of the Prince George's County Public Schools for his own personal financial gain which came at the expense of the children he was entrusted to serve. We in the FBI are committed to addressing public corruption at every level, and are pleased to have been instrumental in this case."

"All financial crimes add to the underground economy which erodes the integrity of our tax system and threatens the financial health of our communities. Crimes committed by public officials violate the public trust. IRS-Criminal Investigation is united with the rest of the law enforcement community to ensure public officials comply with the same laws as the citizens they serve. No one is above the law!" stated C. Andre' Martin, Internal Revenue Service-Criminal Investigation Special Agent in Charge.

The Prince George's County Public Schools (PGCPS), one of the 20 largest school districts in the nation in 2004, with a budget of more than $1 billion, employed Hornsby as Chief Executive Officer and Secretary and Treasurer of the Board of Education for Prince George's County (Board) beginning in June 2003 until his resignation in May 2005.

Kickback from E-Rate Contracts

Hornsby owned and operated Quality Schools Consulting, Inc. (QSCi), which assisted schools in preparing applications to secure funds under the federal E-Rate program. E-Rate provides schools and libraries with substantial discounts on telecommunications services, Internet access and internal connections. Cynthia Joffrion, who had worked for Hornsby in other school districts, assisted Hornsby in providing these services.

According to testimony in the five week trial, in the fall of 2003 PGCPS sought assistance with its E-Rate applications. Hornsby directed PGCPS employees to seek proposals from outside E-Rate consulting companies by issuing a request for proposal (RFP). Joffrion provided Hornsby with a draft RFP which Hornsby provided to PGCPS personnel. Using that draft, PGCPS published an RFP for two weeks starting in October of 2003 to solicit bids. The mandatory deadline for the return of bids was November 3, 2003.

After evaluating the proposals submitted within the deadline, PGCPS recommended awarding the contract to a Maryland-based certified minority contractor, which submitted a bid for $59,675. Hornsby directed PGCPS personnel not to award the contract to the recommended contractor, and instead steered the contract to a non-existent company, "Erate Managers D.B. Inc. (Erate Managers)," purportedly operated by Joffrion, who transmitted a proposal after the deadline for bids had expired. Joffrion initially quoted a flat fee of $48,550, but after Hornsby privately complained about the price, on December 14, Joffrion submitted another proposal to PGCPS that substantially increased the quote by adding a fee of 1% of the E-Rate funds awarded in addition to the flat fee of $48,550.

Testimony at trial showed that as a result of Hornsby's intervention, on December 19, 2003, PGCPS issued a purchase order to Erate Managers requiring the school system to pay $48,550 plus 1% of the value of the E-Rate funds awarded in excess of $2 million. Pursuant to the contract for 2004, PGCPS paid Erate Managers more than $80,000.

For the 2005 year, PGCPS again awarded Erate Managers a contract for E-Rate consulting services, requiring the school to pay $60,500 plus a fee of 1% of the value of the funds awarded up to $10 million and 1.5% of the value of the funding award in excess of $10 million, not to exceed $300,000. Under the 2005 contract, PGCPS paid Erate Managers $40,900 before the contract was terminated by the Board.

Hornsby and Joffrion agreed that Hornsby would receive half the proceeds from the E-Rate contracts. Joffrion contacted law enforcement and began cooperating with the FBI in October 2004. She then allowed the FBI to monitor her telephone conversations and meetings with Hornsby between November 2004 and June 2005. A videotape of a meeting at a hotel in Bowie, Maryland, on December 20, 2004, showed that Hornsby arranged to receive more than $100,000 from Joffrion, which represented about half of the fees to be paid by PGCPS. During the meeting, Hornsby took $1,000 in cash as a down payment. Hornsby proposed various methods to evade detection of the payments, including arranging for Joffrion to purchase valuable items for him such as property, a truck, art and a yacht.

Kickback from LeapFrog Contract

LeapFrog Enterprises, Inc. (LeapFrog) developed and marketed technology-based educational products. Sales commissions were generally paid to the representative assigned to the territory in which the sale was made. The sales representative for sales to customers in Virginia was Sienna Rochelle Owens. According to trial testimony, during his tenure as CEO, Hornsby and Owens were engaged in a long-term romantic relationship, and shared the same residence in Mitchellville, Maryland. Another sales representative was responsible for sales to customers in Maryland.

In May 2004, Hornsby directed that PGCPS establish a summer program for kindergarten students who were being held back, and suggested using LeapFrog products. After receiving proposals from the Maryland sales representative for LeapFrog, PGCPS personnel recommended using a LeapFrog package for 33 classrooms.

Meanwhile, Hornsby advised Owens that he wanted to purchase LeapFrog products for 216 classrooms. Owens dealt directly and exclusively with Hornsby, who finalized the LeapFrog contract on June 10, 2004. At Owens' request, Hornsby called her supervisor and agreed that PGCPS would purchase the LeapFrog products for $956,280. This transaction was one of the largest sales ever made by LeapFrog's SchoolHouse Division to public schools. At Hornsby's direction, PGCPS mailed a check dated July 30, 2004, for $956,280 to LeapFrog to pay for the deal.

On June 4, 2004 Owens demanded 70-75% of the projected sales commission of $40,689, or a flat fee of $25,000 from the Maryland LeapFrog sales representative. Owens later agreed to accept $20,000 in commission and on June 11, 2004 she executed a commission share agreement with the Maryland sales representative using a Compaq Presario computer and software registered to Hornsby. On August 4 Owens received $20,000 by money order from the Maryland sales representative. Owens then paid Hornsby $10,000 in cash for his assistance in securing the LeapFrog contract. Hornsby instructed Owens to eliminate emails and other records that would reveal her involvement in the LeapFrog contract.
Concealment of the Kickbacks

In October 2004, following newspaper reports of the LeapFrog contract and the relationship between Hornsby and Owens, the FBI opened an investigation into PGCPS contracts with Erate and LeapFrog, leading to a federal grand jury investigation. Hornsby was aware in late 2004 of the federal investigations. He was also aware that the Board hired a forensic accounting firm, Huron Consulting Group (Huron), to investigate the contracts.

Testimony at trial showed that Hornsby made false statements to Huron auditors and in his written response to Huron's June 3, 2005 written report. Hornsby falsely stated that: Joffrion did not work for, or provide services to any clients of, QSCi; he did not know who developed the RFP; PGCPS personnel did not select any of the five bidders for the initial E-Rate because their proposals did not respond to the RFP; after he assumed leadership of PGCPS he did not accept any new E-Rate business and that he had secured two E-Rate contracts with a Houston, Texas school district before his tenure with PGCPS; he was not aware that Owens played any role in the LeapFrog contract; he did not have any role in negotiations to finalize the LeapFrog contract; and he did not personally benefit from the E-Rate and LeapFrog contracts.

Obstruction of Justice

On the heels of the news of the federal investigation, Hornsby instructed PGCPS personnel to destroy back-up computer tapes containing his and other employee email. Additionally, Hornsby attempted to persuade Joffrion, who was cooperating with the FBI, not to produce the computer files from the Compaq computer used by Owens to create the commission-share agreement, which had subsequently been sent to Joffrion, as requested by a grand jury subpoena.
The jury acquitted Hornsby on two other counts and did not reach agreement on 14 charges.

Sienna Owens, who testified at trial, pleaded guilty to endeavoring to impede the internal revenue laws for failing to report the commission income from the LeapFrog contract. She faces a maximum penalty of 3 years in prison followed by a year of supervised release and a $250,000 fine.
United States Attorney Rod J. Rosenstein praised the Federal Bureau of Investigation and Internal Revenue Service - Criminal Investigation for their investigative work. Mr. Rosenstein thanked Assistant U.S. Attorneys Michael R. Pauze and Stuart A. Berman, who prosecuted the case.