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Dallas man gets one year for TxDOT land flip in Denton County

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Kevin Krause, The Dallas Morning News

Second defendant's sentencing scheduled for next month

When two Dallas men began buying up land along Interstate 35E in Denton County, it seemed foolish to longtime landowners there. They were used to bogus rumors about the state's massive highway widening project finally getting underway, so the investments may have seemed risky.

But Wade Blackburn and Kevin Bollman had something no one else had — a contact inside the Texas Department of Transportation who would help them sell to the state, prosecutors say. The scheme netted them $12.9 million in sales from the state, according to prosecutors.

On Thursday, Blackburn was sentenced to one year and one day in federal prison under an agreement with the U.S. attorney's office.

U.S. District Judge Marcia A. Crone also ordered Blackburn to pay $1 million in restitution to TxDOT as part of the agreement. Blackburn pleaded guilty in April to one count of conspiracy to commit mail fraud in connection with the land deals.

Bollman is scheduled to be sentenced next month.

Blackburn did not make any comment to the judge prior to his sentencing, and none of the attorneys made any arguments or objections. The hearing lasted about 10 minutes. Blackburn and his attorney, Robert R. Smith, declined to comment as they left the federal courthouse in Plano.

Crone said the sentencing range, based on the guidelines, was 46 to 57 months. The sentence of one year was agreed to in advance by the U.S. attorney's office.

"Perhaps you could explain why it's such a favorable deal," Crone said to Assistant U.S. Attorney Christopher Eason.

Eason told her a trial would be lengthy and involve dueling experts, and that a jury verdict could leave the state transportation agency empty-handed. He said the short prison term provides enough deterrence and that TxDOT agreed with the sentence.

Crone told Blackburn he has to report to the Bureau of Prisons by Oct. 30 to begin his sentence.

TxDOT did not have a comment about the sentencing, according to a spokesperson.

The flip

The 2016 indictment against Bollman and Blackburn said the men bought land cheap alongside I-35E and then flipped it to the state at inflated prices after lying about bogus development plans which they claimed would be ruined by the planned highway expansion. Land under development qualifies for higher compensation.

The Dallas Morning News first wrote about the scheme in 2013 . In 2014, The News was the first news outlet to report that Bollman and Blackburn were under federal investigation.

Prosecutors said the men raised investment money to buy right of way along I-35E and then flip the land to TxDOT between 2008 and 2011. Officials said the deals involved six parcels, totaling more than 25 acres, which were sold in four transactions.

The 24-page indictment mentions a 2008 email that Blackburn sent to Bollman about a site plan for some of their highway property.

"This is obviously just for TxDOT justification," Blackburn said in the email. "Notice how I am having the architect say that most of the property will not be developable after the take."

Inside connection

The Dallas real estate investors received "preferential treatment" from TxDOT in being able to sell their land to the state first, using option contracts, federal authorities said.

Former U.S. Attorney Malcolm Bales of the Eastern District of Texas said last year that Blackburn and Bollman developed a cozy relationship with a former TxDOT right-of-way supervisor to pull off their scam. The indictment refers to him as an "unindicted co-conspirator."

Bollman and Blackburn paid the co-conspirator more than $446,000 and hired his son, the indictment said.

And in December 2011, Bollman and Blackburn spent about $15,000 on a hunting trip they took with the co-conspirator, as well as a Denton County transportation consultant and others, according to the indictment.

Blackburn's plea documents said he told his investors he had a "connection" with a TxDOT employee who would help set up the option payments.

The former TxDOT supervisor has not been charged with a crime.

FEATURED PHOTO: Wade Blackburn, right, leaves the U.S. Courthouse after his sentencing hearing Thursday in Plano. He pleaded guilty to one count of conspiracy to commit mail fraud in connection with the land deals with the Texas Department of Transportation in Denton County in April.
Jae S. Lee/The Dallas Morning News