From The Oregonian Oct. 14:The former head of a Texas charity once praised for helping disabled workers was arrested Oct, 13 on federal charges he lied about the program and embezzled several million dollars.
FBI agents arrested Robert E. "Bob" Jones, (pictured) who once ran a nonprofit now known as ReadyOne, at his El Paso home on two federal indictments charging him with 42 counts. They also arrested his former right-hand man at the Texas charity and a former director of the charity.
Federal prosecutors said they would seek an order that Jones forfeit $58 million they say was obtained through the years-long fraud scheme.Jones was a central figure in a 2006 investigative report by The Oregonian. The newspaper focused on Jones as part of its probe of a federally-funded employment program meant to steer work to charities that employ Americans with severe disabilities.
The Oregonian reported then that Jones manipulated the federal program, hired people who weren't disabled and used the charity to fund his personal businesses, including a stake in a Learjet charter company. Jones, who took fees of up to $4.5 million a year from the charity, quit as the charity's president the day the story appeared.
Jones transformed a moribund Texas charity called National Center for the Employment of the Disabled, turning it into a financial powerhouse. The charity
became the largest federal contractor under a program called the Javits-Wagner-O'Day Act, or JWOD. It grew into El Paso's largest employer by winning millions in annual contracts to supply military clothing, particularly chemical protective suits.
As The Oregonian detailed in its 2006 report, the charity misled federal officials about the makeup of its work force. The nonprofit business, under forms signed by Jones, claimed repeatedly that it was meeting the federal requirement that at least 75 percent of the labor used in the El Paso factory was provided by disabled workers.
In fact, according to documents obtained by The Oregonian, Jones and his staff were counting as disabled workers that it internally considered disadvantaged; their primary disadvantage was was listed as an inability to speak English.The federal agency operating the jobs program, the Committee for Purchase from People who are blind or severely disabled, threatened to bar the charity from the program because of employment abuses.
Nine months after resigning from the charity, Jones agreed to repay the organization $13 million to settle charges he cheated the company. He denied in court filings he had done anything wrong.
The U.S. Attorney's Office in San Antonio said Tuesday that Jones faces 37 counts of fraud and embezzlement. Ernest "Ernie" Lopez, once the charity's chief operating officer, was arrested on 17 counts and Patrick Woods, a former director of the charity and Jones' former brother-in-law, is charged with seven counts.
In a separate indictment, Jones and Woods were charged with obtaining a $975,000 bank loan by falsely claiming that Jones owed Woods for construction of his home.Besides the forfeiture from Jones, prosecutors said they would seek to forfeit $51 million from Lopez and $4.2 million from Woods.