4

Another Dallas Developer Is Accused of Bribing City Council Members

Sherman Roberts is one of three developers indicted in the last two years on counts of bribing members of City Council.EXPAND
Sherman Roberts is one of three developers indicted in the last two years on counts of bribing members of City Council.
Kiwiev via WikiCommons
^
Keep Dallas Observer Free
I Support
  • Local
  • Community
  • Journalism
  • logo

Support the independent voice of Dallas and help keep the future of Dallas Observer free.

Sherman Roberts, president of affordable housing developer City Wide Community Development Corp., is accused in federal court of paying bribes to two former Dallas City Council members in exchange for their votes to support his projects. 

U.S. Attorney for the Northern District of Texas Erin Nealy Cox announced his indictment Thursday after an investigation led by the FBI’s Dallas Field Office. The indictment charges him with one count of conspiracy to commit bribery regarding federally funded programs and one count of bribery concerning a local government receiving federal benefits.

“Bribing government officials in exchange for official acts destroys the public’s confidence in city government, Matthew J. DeSarno, special agent in charge of the FBI’s Dallas field office, said. “The criminal activity alleged today demonstrates the willingness of our trusted public officials to waste valuable resources intended for the residents of Dallas, while circumventing the processes they were charged to uphold.“

One of Roberts' projects received $1.6 million in city loans and grants for a South Dallas apartment complex development thanks to votes from a City Council member he allegedly bribed.

The Dallas Morning News identified the two former council members, identified in the indictment as Council Member A and Council Member B as Carolyn Davis and Dwaine Caraway, respectively.

Council Member A allegedly took cash and the promise of more money after her council tenure ended in return for a vote to authorize $1.9 million in city funds for Robert’s Serenity Place project. Roberts would make monthly payments of $2,000 to Council Member A for a lump sum of $60,000, according to the indictment.

Roberts allegedly told the council member, the leader of Dallas’ Housing Committee in spring 2015, “Right now, you and me are making money” from the real estate dealings. The chair of the committee at that time was Carolyn Davis. The former council member died following a traffic accident in July 2019 not long after she pleaded guilty to taking over $40,000 in bribes from another recently indicted developer, Ruel Hamilton.

In February 2014, Council Member A moved to make Roberts’ Serenity Place a key project for the city and voted to recommend it for approval by the City Council.

The council member also recommended that the project be given a 9% low-income housing tax credit and demanded other developers with competing projects withdraw their applications. After Roberts’ application for the low-income housing tax credit was rejected, Council Member A wrote a letter in her official capacity to the executive director of the Texas Department of Housing and Community Affairs asking that the credits be reinstated, the indictment states.

An addendum item to be considered by City Council was also added by Council Member A to help get the tax credits reinstated. Additionally, Council Member A voted to award a $1 million loan for constructing Serenity Place as well as a $959,913 construction grant and a $38,000 predevelopment grant.

In late April 2015, Council Member A voted to recommend to the City Council a forgivable city housing development loan of no more than $300,000 for Roberts’ Runyon Springs project. Around the same time, the council member began asking Roberts for cash, according to the indictment.

In May that year, Roberts told the council member, “I’m bidding on [Patriots Crossing].” Council Member A responded, “I am your mouthpiece,” according to the indictment.

Patriots Crossing was up for grabs, and developer Sherman Roberts wanted it. So, he bribed a council member to help deliver it to him.
Patriots Crossing was up for grabs, and developer Sherman Roberts wanted it. So, he bribed a council member to help deliver it to him.
Jim Schutze

Patriots Crossing was a residential development set to be built next to the Veterans Administration Hospital on Lancaster Road in central southern Dallas. In 2014, the city gave an inexperienced developer a $4.5 million forgivable loan for the project, but the developer failed to deliver.

Three years later, the city was planning to seek other bids for the Patriots Crossing project. Council Member A and Roberts then approached Council Member B, who the DMN identified as Dwaine Caraway.

Council Member B was paid $600 to stop the city from issuing a new call for bids for Patriot’s Crossing and agreed to cast supporting votes for Sherman's project, authorities allege.

They also discussed needing to get eight votes from the City Council for the project. Council Member B told Roberts, “Once you’re successful with this project, don’t forget about me and [Council Member A].” Roberts paid Council Member B a $2,000 monthly stipend and an additional $60,000 after being able to refinance another project.

Former council member Dwaine Caraway was convicted in an unrelated bribery scheme last year.EXPAND
Former council member Dwaine Caraway was convicted in an unrelated bribery scheme last year.
Stephen Young

Just a couple of days after agreeing to the terms in August 2018, Caraway admitted to taking almost $450,000 in bribes and kickbacks related to Dallas County School's stop-arm camera program. Last year, Caraway was sentenced to 56 months in federal prison. Caraway's attorney did not respond for comment. Davis pleaded guilty to her bribery charges the same year.

If convicted, Roberts faces up to 15 years in federal prison.

It's not the first time Roberts has been the subject of controversy. He served on the board of the Dallas Housing Finance Corp., which helps finance affordable housing projects in the city. The DMN reported in 2018 that while Roberts served on the board, the agency paid his nonprofit to manage properties for them. His nonprofit was also paying him $113,000 a year and handed him loans of at least $70,000, according to the DMN. He served on the board for 20 years before resigning in May of last year.

Roberts is the third real estate developer charged with bribery in the last couple of years. The developer responsible for the Grand Park Place apartment project, Devin Hall, pleaded guilty in August this year. Ruel Hamilton, the AmeriSouth Realty Group executive who backed the Royal Crest housing project, is set to stand trial in February next year.

Keep the Dallas Observer Free... Since we started the Dallas Observer, it has been defined as the free, independent voice of Dallas, and we would like to keep it that way. Offering our readers free access to incisive coverage of local news, food and culture. Producing stories on everything from political scandals to the hottest new bands, with gutsy reporting, stylish writing, and staffers who've won everything from the Society of Professional Journalists' Sigma Delta Chi feature-writing award to the Casey Medal for Meritorious Journalism. But with local journalism's existence under siege and advertising revenue setbacks having a larger impact, it is important now more than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" membership program, allowing us to keep covering Dallas with no paywalls.

We use cookies to collect and analyze information on site performance and usage, and to enhance and customize content and advertisements. By clicking 'X' or continuing to use the site, you agree to allow cookies to be placed. To find out more, visit our cookies policy and our privacy policy.

 

Join the Observer community and help support independent local journalism in Dallas.

 

Join the Observer community and help support independent local journalism in Dallas.