By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
Lee Jackson, the University of North Texas chancellor, remembers the potential partnership well. The idea was brought to the school by someone he trusted to understand education issues, he says, although he won't say who. "I plant a lot of seeds, and they don't always sprout," Jackson says.
Jerry Thomas, the dean of UNT's education school, says the school negotiated with Wallace in 2009 for about a year. He had intended that the charter would be a "laboratory school" where his students could participate and student teach. When the location was planned for Fort Worth, Thomas decided it was too far from campus, and the arrangement fell apart.
But before it did, Smith claims, Wallace presented him with an opportunity to profit from the publicly funded, nonprofit school. The opportunity came in the form of a "revenue-sharing agreement." For a $25,000 initial investment, Smith would earn $174,600 over a three-year period. The revenue would come from rent paid by UNT to the school's landlord, a company called Pinnacle Commercial Properties Group, which lists Wallace as its CEO.
Smith provided the Observer a copy of what he claims is this agreement, along with a chart outlining the potential payout. It doesn't mention the school, but it outlines the terms of the revenue-sharing agreement as Smith describes. It includes details about the property, which match those of the building in Fort Worth where Smith says the UNT charter school was supposed to be housed: Charity Church.
That church, it so happens, is the same church where Wallace and Sanders plan to house the Fort Worth campus of Prime Prep. Records show that the church's bishop, F.R. Mays, is an officer of Pinnacle Commercial Property Group, and that the church and real estate company share an address. But not only would it have been illegal for investors to profit off of a UNT charter school, records show that Pinnacle never owned the building in the first place.
Smith, unaware at the time that charters were tax-funded, nonprofit operations, claims he invested $2,500 in the school up front. He never got a refund when the school fell apart, he says. All told, Smith says he invested $5,500 in Wallace's businesses. In 2010, he and six fellow investors sued, accusing Wallace and Sanders of fraud, negligence, deceptive trade practices and more. They asked for amounts ranging from $188,000 to $400,000, including money owed on investments, lawyer's fees and retribution for "mental anguish."
The case dragged on until last week, when Smith and his co-plaintiffs filed motions to dismiss the lawsuit. It was a case of David versus Goliath, Smith says, only in this version Goliath had NFL money. Fees were racking up and it became "financially tough on the plaintiffs to go forward." But they can and may re-file a similar lawsuit. "We're standing by exactly what we presented," Smith says.
It's been more than two years since Smith cut ties with Wallace. After a year of relative silence, he read a news story last fall in the Fort Worth Star-Telegram about Prime Prep Academy's charter school application.
"That just blew me away," Smith says. He called his lawyer to tell him that his old business pals were at it again. Then he called the Texas Education Agency, the state department that regulates charter schools, and requested a copy of the Prime Prep application, which would be approved by the state board of education a month later.
"I said I've got to alert them because I know this guy," Smith says. He paged through the application and began to recognize names, addresses and business tactics: Charity Church, Pinnacle, D.L. Wallace, Deion Sanders.
"Sure enough, my intuition was right," he says.
Poring over the documents, Smith found that Prime Prep Academy's application included a "sales/marketing" agreement with PrimeTimePlayer, a company whose officers include Wallace and Chazma Jones, both Prime Prep board members. The school would pay the company thousands of dollars for its services, plus a commission on "all monies derived from corporate, local business and private donor sponsorships."
The application also claimed that the school had locked up hundreds of thousands of dollars in corporate donations, from companies including Bank of America, Walmart and the NFL Network. But representatives from several companies listed told the Austin-based Texas Observer that they'd made no such donations.
And while the school was dubbed Prime Prep, its sponsoring nonprofit corporation was called Uplift Fort Worth, despite or perhaps because of the existence of a well-regarded chain of charter schools called Uplift. (The original Uplift has asked Wallace's group to make clear that the two organizations are separate.)
In recent weeks, the Observer also discovered even more discrepancies in the school's application, this time in a list of community members who communicated support. It includes LeRoi Phillips, the assistant athletic director and head basketball coach at Dallas County Community College District. Phillips, who was listed in the school's application as DCCC's head athletic director, says he has no idea how his name ended up there. He'd served on the board of Life School, a charter school adjacent to Prime Prep's Oak Cliff campus, and was asked to serve on Prime Prep's board. But he refused.