George Grace pleads not guilty on two new federal charges

Deidre Cruse, Governmental Reporter

Former St. Gabriel Mayor George L. Grace Sr. pleaded not guilty in federal court last week to two new charges, one in connection with the undercover sting operation called “Operation Blighted Officials” and the other with the alleged extortion of a city vendor.

Grace, scheduled for trial on January 23, now faces 13 counts of violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), extortion, obstruction of justice, false statements, bribery involving a federally-funded entity, mail and wire fraud and, with the “superseding indictment” filed last month, a count of extortion and a count of “use of an interstate facility (a telephone) in aid of racketeering.”

Until April, when he lost his bid for re-election, Grace was the only man to serve as mayor of St. Gabriel since its incorporation in 1994.      

The former mayor pleaded not guilty to the initial 11 counts in U. S. District Court in Baton Rouge in September 2010. He was the last of seven local and area public officials indicted in connection with the FBI's sting operation involving undercover agents posing as businessmen representing the fictional residential garbage cleaning service called “Cifer 5000.”

Unlike the other defendants in “Operation Blighted Officials,” he also was indicted in connection with “schemes” other than the Cifer ruse, two involving real estate and a third involving the extorting money from a small businessman from Baton Rouge who was doing business with the city.

One of the new indictments charges Grace with extorting $7,500 from  “B.E.,” the part owner of a small Baton Rouge business, which sold some $450,000 worth of goods to St. Gabriel between August 2002 and August 2007.

“Grace served as the city's primary contact with B.E. And Grace made it clear that he controlled whether the cit did business with B.E.,” the indictment said.

During the time B.E. did business with the city, Grace allegedly solicited cash payments of $1,000, $3,500, $2,000 and $1,000.

“Fearing that Grace would cut off  his business with the city if the cash was not paid, B.E. paid Grace the requested amount on each of the four occasions,” the indictment said. “Neither Grace nor the city was entitled to the cash. Three of the payments were made in a parking lot of the baseball stadium at Louisiana State University and the fourth payment was made in a subdivision located off Highway 30. The payments were made in those locations to avoid detection.”

According to the document, unbeknownst to Grace, B.E. Began cooperating with the FBI, and recorded a meeting with Grace at City Hall on August 28, 2007.

“B.E. told Grace that the FBI was seeking to interview B.E. Concerning his dealings with Grace,” the indictment said. “B.E. Expressed concern that the FBI might ask about the cash that Grace had solicited and received from B.E.

“Grace responded by advising B.E. to lie to the FBI, stating, 'You don't want to tell 'em you gave me no cash.' Grace assured B.E. That nobody knew about the cash payments.”

During an interview with agents of the FBI and the U. S. Department of Homeland Security at City Hall on October 1, 2007, Grace “repeatedly lied in an attempt to conceal the cash payments and his effort to corruptly persuade B.E. to lie to the FBI. Specifically, Grace falsely denied having made cash payments to B.E. And having discussed such payments with B.E.”

The other new indictment accuses Grace of using the telephone to set up a payment of $2,000 from the Cifer businessmen, apparently in exchange for arranging meetings with other public officials on Cifer 5000.

Among those allegedly were former White Castle Mayor Maurice Brown, whom a federal jury convicted in the Cifer case and who has been sentenced to 10 years in federal prison, and his brother White Castle Police Chief Mario Brown, who was acquitted of all charges at the same trial.

Former New Roads Mayor Tommy Nelson, former Port Allen Mayor Derek Lewis, former Port Allen Police Chief Fred Smith and former Port Allen Councilman Johnny L. Johnson Sr. also have been convicted, but have not yet been sentenced.