INDIANAPOLIS (WTHI) - The U.S. Government's star witness took to the stand Tuesday morning as the trial of Franklin Fennell moved into day two.
Mike Pick, owner of M & P Properties in Terre Haute, was called to the stand and spent his morning under direct examination by deputy US Attorneys. We expect cross examination to take place Tuesday afternoon.
Pick confirmed he did tree and stump removal work for the Vigo County School Corporation at the direction of Fennell, who was the Facilities Director at the time.
Pick said he began doing work for the VCSC in April of 2014 with a job at Terre Haute North Vigo High School. Pick described the process for getting the job as like one we've heard before with government jobs.
He submitted an estimate for the work, was awarded the job, and submitted an invoice once the work was complete.
Pick says this was the last of his 50-plus jobs with VCSC that was handled this way.
At North, Pick claims he and Fennell were talking by the football bleachers. It was here Pick says Fennell approached him about providing kickbacks to Fennell and Frank Shahadey, who happens to be an old friend of Pick's.
Pick said the payoff for him was he was to receive more work, as VCSC was placing an added emphasis on how the 28 school campuses were looking. Pick also admitted that his sons got into trouble over drugs, and that Shahadey had helped one of those situations go away.
Pick said he paid Fennell and Shahadey each a $500 kickback from that first job at North, and it came from the profits of the job itself.
From that point forward, Pick said Fennell instructed him to inflate estimates and invoices by the amount of the kickback, usually $1000. Also, estimates and invoices were submitted together before jobs were completed, Pick said.
Pick said Shahadey nicknamed the kickback money "geeb," which Pick understood was the Arabic word for money.
Pick claims Fennell told him the kickbacks were to be paid the same day as Pick received his check from VCSC, and they were to be paid in cash in the form of $100 bills. Shahadey claimed that made the transaction "untraceable."
Pick also claims there were three to four jobs in which he was paid for doing no work. Fennell called those "fake invoices" according to Pick's testimony.
One such job came in May of 2014, when Fennell instructed Pick, according to his testimony, to write up an invoice claiming bridge and walkway repairs at North High School and Honey Creek Middle School. Pick testified he did no such job, but was paid $4,600. That money was split three ways.
It was at this point Pick said he quit working for VCSC "for a few months" because he wasn't comfortable with fake invoices. However, the work resumed, although testimony didn't make it clear when his work hiatus took place.
Another such "fake invoice" job took place, according to Pick, in February of 2015. Pick testified that Fennell asked him to clean gutters and downspouts at Riley Elementary School, a $7,300 job.
The estimate and invoice were submitted together, according to Pick. He claims the day before the job, he was called by Fennell who ordered him not to do the work at Riley. Still, VCSC paid Pick for the job, and they split the check three ways again, per Pick.
As 2015 rolled on, the volume of work increased, according to Pick.
He said he was juggling between four and five jobs at a time for VCSC. He claims the kickbacks also increased. He said both men wanted more money for Spring Break, moving up the kickbacks to $4,500 dollars.
Pick said Fennell and Shahadey spent their breaks in Florida. Pick also claims Fennell used this same technique to help fund a trip to Disney World.
Pick said on one job, Fennell asked him for a $10,000 kickback so he could make a down payment on a house. Pick said he only gave him $5,000, because he was concerned a kickback that large would send up red flags throughout the corporation.
Pick also recalled a call he received while on vacation in Aruba on June 8, 2016, the day the FBI raided VCSC. He at first told the jury he denied the investigators' allegation. A month later, he took his lawyer to the US Attorney's office saying he would cooperate.
Part of that cooperation included recording all phone and in-person conversation he had with Fennell or Shahadey.
The jury heard from multiple conversations.
Pick pointed out the Fennell we heard in court was not similar to the one he dealt with prior to the raid. Pick testified after the raid, Fennell became very paranoid, claiming the FBI was taping everything they said and constantly watching him. Even Shahadey's demeanor changed somewhat, according to Pick, saying he told him to "keep his ------- mouth shut."
Pick said the scheme continued after the raid, except the FBI paid for the kickback to Shahadey and Fennell.
Pick said all of his checks also went into an escrow account to VCSC could recover its money.
"My family appreciates you helping us out," is what Fennell allegedly said to Mike Pick as Pick paid him a kickback in the parking lot of Terre Haute Savings Bank, where Fennell sometimes did some paid work (which dried up after the raid).
That kickback was $7,000.
Since Pick testified and cooperated with the government, he will avoid prosecution, although he also said the government has made no promises to him.
Pick said he came forward because "it's the right thing to do," and he was "tired of it" and everything was "weighing on" him.
During the recorded conversations News 10 heard between Pick and Fennell, Fennell claimed he lost 20 pounds soon after the raid, calling it "the FBI diet." He also said repeatedly to Pick "me and you done nothing."
However, Pick testified we knew we did, and why would you say that if you were innocent?
News 10 also heard Fennell, when speaking about the raid, wondering out loud what "Danny" did, in reference to VCSC superintendent Dr. Daniel Tanoos.
After Mike Pick's near 7 hour run on the witness stand, current VCSC Facilities Director Rick Long took to the witness stand. He served as assistant director during Fennell's tenure as director, which was from 2009 to 2016 when he was arrested by federal agents. Long took over Facilities after Fennell's arrest.
Contrary to most rumors we heard following the June 8, 2016 FBI raid, it was Long who notified the State Board of Accounts of alleged misconduct among administrators at VCSC. More specifically, he identified his boss, Fennell as cashing out what appeared to be inflated invoices from M & P Properties, Pick's company.
Long said he began noticing discrepancies in April of 2014. It had to do with a job of removing trees and a fence at Terre Haute North Vigo High School. Long and Chuck Zimmerman, another facilities employee, usually oversaw jobs when trees needed removed. Their main purpose was to see if VCSC staff could remove the trees and fence, or whether the job was "bigger than Chuck," meaning they needed to hire outside help. Long confirmed VCSC staff removed trees and shrubs prior to April 2014. In fact, the VCSC owns equipment for this very purpose.
Long obtained quotes from a local excavation company as well as a fence company to complete the job at North. But it was Zimmerman who alerted him another crew was already on the job site. Long not only found out is was M & P, but their purchase order indicated their price was double that of the excavation company he worked with, and that M & P didn't include stump removal in the quote.
Long said he confronted Fennell about this. Long said the response he got was a stare. Long then asked, "Is this Danny's boy?" That's referring to Superintendent Dr. Daniel Tanoos, who is known as a hands-on boss. Fennell responded that it was, and Long said he immediately got the feeling that he needed to leave this alone.
Long continued noticing jobs that were overpriced being paid to M & P. He began making copies of records. In early 2016, he confided in an attorney about his suspicions , that Fennell may be involved in some sort of scheme with M & P. The lawyer told Long to write a letter to the State Board of Accounts. Long specifically wrote investigator Andy Shank, with whom News 10 is familiar. He's retired from the Indiana State Police, having worked investigations for ISP for many years. News 10 has spoken several times with Shank in the past. He told us after getting the case, it was clear to him he needed to get the FBI involved.
News 10 left the courtroom as Long was still on the stand. We did so in order to meet our 5 o'clock deadline for the First at Five Newscast. We do know the trial continues tomorrow at 8 a.m.
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