HICKORY CREEK — Two Dallas real estate investors were charged this week with conspiracy to commit mail fraud in connection with the Interstate 35E expansion project in Denton County, U.S. Department of Justice officials announced Thursday.
On Wednesday, a federal grand jury in Sherman indicted James Kevin Bollman, 48, and Wade Wylie Blackburn, 33, on one count of conspiracy to commit mail fraud.
The men are accused of deceiving the Texas Department of Transportation by purchasing land in Denton County along the I-35E frontage road and selling it to the state for highway right of way at bloated prices.
Bollman and Blackburn were charged with mail fraud because they used the U.S. mail to conduct an illegal conspiracy, prosecutors said.
Federal officials said that from June 2008 to July 2015 the men purchased property along I-35E, including six land parcels in Denton County, in order to sell it to TxDOT at inflated prices. The state highway department needed the land to widen I-35E.
The federal indictment alleges that Bollman and Blackburn told TxDOT that the land in question was under development, making it more valuable than it really was. That resulted in TxDOT paying inflated prices. The men also developed a relationship with a TxDOT employee, who was not named Thursday. That relationship resulted in land deals being done quickly, payments being expedited and Bollman and Blackburn collecting nearly $13 million in net profits, according to prosecutors.
“The U.S. Attorney’s Office and FBI are working very hard for you, and the idea that folks can get away with what we think is wholesale fraud is unacceptable to us, and we’re going to look at it very closely,” U.S. Attorney James Malcolm Bales said during a press conference Thursday afternoon in Hickory Creek.
Bales’ backdrop for press conference was two tracts of land adjacent to I-35E that Bollman and Blackburn sold to TxDOT that are listed in the indictment.
The Dallas Morning News previously reported that lawyers representing the two men researched public records before making the land purchases along I-35E. The state needed some or all of the properties they bought, most of which were along I-35E, according to The News.
“We are not saying that it’s against the law to make money when a citizen does business with a state agency — far from that,” Bales said.
“The accusations in this charge relate to intentional and outrageous deception in those business dealings as well as a co-optive right of way acquisition process.”
Bollman and Blackburn are expected to appear before a judge in Sherman next Thursday, when a trial date is expected to be set, Bales said.
If convicted, Bollman and Blackburn face up to 20 years in federal prison.
Bales said federal agents have been investigating the land fraud conspiracy since December 2011.
He said prosecutors intend to prove Bollman and Blackburn “sold land fraudulently to TxDOT claiming it was under development” when it was not. Prosecutors will also seek to prove the men received preferential treatment in how quickly the land was purchased by TxDOT, which resulted in expedited payments.
Bales added that the government will also try to recover “every one of those 13 million dollars” the two men gained from the transactions.
The investigation is still ongoing, Bales said.
At this time, no other individuals are being charged and no one has received immunity, he said.
BRITNEY TABOR can be reached at 940-566-6876 and via Twitter at @BritneyTabor.