NEWS

Epps probe: 'Miss. Hustle' started with sex scandal

Emily Le Coz
The Clarion-Ledger
Mississippi Department of Corrections Commisioner Chris Epps tells the media that death row inmate Rodney Gray has denied guilt in any crimes including the the 1994 kidnapping, murder and rape of 79-year-old Grace Blackwell for which he was convicted and is scheduled to be executed for Tuesday evening.

Chris Epps unwittingly triggered the five-year federal investigation that this month ended his career as Mississippi's longest-serving corrections commissioner when he allegedly tried to cover up a warden-inmate sex scandal threatening to tarnish his newest pet project.

It was the last straw for Leake County Sheriff Greg Waggoner, who blew the whistle on Epps immediately after the 2009 incident and thus opened the federal investigation dubbed "Mississippi Hustle."

The investigation, which is ongoing, resulted in a 49-count indictment against Epps and Rankin County businessman Cecil McCrory for their alleged roles in a massive kickback scheme in which Epps took roughly $1 million in exchange for nearly $1 billion in contracts to McCrory-related businesses.

Both men pleaded not guilty to the charges on Nov. 5 at the federal courthouse in Jackson, where Waggoner stood alongside the team of state and federal investigators credited with the crackdown.

Waggoner had declined to comment beyond a few brief statements at the courthouse, but on Thursday he opened up to The Clarion-Ledger about his first whiff of possible impropriety by Epps.

Sitting in his large, wood-paneled office built with inmate labor, Waggoner said it all started when McCrory came to town. The former state legislator and longtime businessman had struck a deal with the Mississippi Department of Corrections to open up a transition center for inmates.

Called Walnut Grove Transition Center, it would boast two separate facilities to house men and women near the end of their prison sentences and help them reintegrate into society.

The center opened in mid-2009 amid much fanfare by Epps, who promoted it as a creative way to cheaply house inmates while reintroducing them back into society. Behind the scenes, though, it allegedly played a key role in the kickback scheme.

Through Epps, MDOC not only leased from McCrory the properties to house the male and female units, but also awarded McCrory the sole-source contracts to operate them, state documents show.

"It looked like everything new that happened with MDOC, Cecil was involved in," Waggoner said.

Meanwhile, McCrory paid off the mortgage on Epps' nearly half-million-dollar home in a gated Flowood subdivision, prompting Epps to tell McCrory he "could get anything he wanted in the future from MDOC," the federal indictment says.

The center housed about 150 men and 100 women in dormitory-like settings. Although still classified as inmates, residents worked outside the facility at pre-approved job sites but otherwise stayed confined.

Residents had to pay McCrory's company, American Transition Services, about $20 per day for room and board. That was in addition to the $6 daily per-inmate fee the company earned from MDOC.

Concerned citizens started calling the Sheriff's Department immediately after the center opened, Waggoner said. Most complained that inmates roamed the community unsupervised and that some spent entire weekends away from the units.

"They were not supposed to be out at all," Waggoner said. "If I ran my facility like that, Epps would have shut me down, but it seemed like there was no problem when McCrory did it."

Then came the complaint that Walnut Grove Transition Center Warden Grady Sims took a female inmate to a motel in Carthage and had sex with her.

Sims, who was the longtime mayor of the town of Walnut Grove, also served as head of the transition center despite having had no background in corrections. The sexual encounter happened on Nov. 26, 2009 — about one month after he started his job as warden — according to a federal indictment against Sims.

Waggoner immediately reported the allegation to MDOC, which he said assigned an internal investigator to assist his department in investigating the incident. Together, investigators from both agencies talked to the female inmate and gathered ample evidence to take to the district attorney, Waggoner said.

But before they could proceed, the MDOC investigator entered Waggoner's office one day in the spring of 2010 and told him it was over.

"'We're closing the case down,'" Waggoner recalled him saying. "I was shocked. I said, 'What do you mean?' You could tell he wasn't happy about it but that he was given orders."

Waggoner said he believes Epps pulled the plug to avoid bad publicity about the transition center, which he had touted publicly in news releases and newsletters for nearly one year.

Epps' attorney, John Colette, disagreed.

"It's my understanding that MDOC completed the investigation," Colette said. "The investigation found wrongdoing, and they requested of the contractor that the person be terminated. The investigation should be on file."

The Clarion-Ledger was not immediately able to verify the existence of the completed investigation.

Waggoner said requesting the termination of a man who committed a felony doesn't end an investigation. The investigation ends, he said, when the man is indicted and brought to justice.

"If you have knowledge of a felony and chose not to pursue it," he said, "you're negligent in your duty."

Dumbfounded about what he believed was MDOC's abrupt ending of the Sims probe, Waggoner called U.S. Attorney John Dowdy for advice. Dowdy confirmed the call to The Clarion-Ledger and also said he contacted the FBI afterward to report the situation.

FBI agents then set up the first of what would become many conversations with Waggoner and launched an investigation against Sims and eventually Epps. They dubbed that investigation "Mississippi Hustle."

A federal grand jury indicted Sims in October 2011, on one count of sexually assaulting an inmate and one count of telling the inmate to lie to investigators about the encounter. Sims pleaded guilty to the second count in February 2012 and was sentenced to seven months in prison.

By that time, investigators already had dug deep into the alleged kickback scheme between Epps and McCrory but kept mum about their findings until unsealing the federal indictment against the pair earlier this month.

If convicted, each faces more than 200 years behind bars.

Waggoner, though, said more than once during the interview that the investigation hasn't ended. A four-term sheriff with gray hair and a quiet, serious disposition, Waggoner would not elaborate on that subject. Instead, he leaned over his tidy desk and cracked a slight, sly smile.

"I don't think it's over," he finally said. "I don't think the corruption stopped there."

Contact Emily Le Coz at elecoz@jackson.gannett.com or (601) 961-7249. Follow @emily_lecoz on Twitter.