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Cornell Defrauded of $13 Million in Prison Construction Scam

Cornell Defrauded of $13 Million in Prison Construction Scam

On August 26, 2008, indictments were filed against three men accused of defrauding private prison operator Cornell Corrections of California, Inc. out of $13 million in a prison construction scam.

A federal grand jury handed down indictments that included 20 counts of wire fraud and one count of conspiracy against Edgar J. Beaudreault, Jr., 60, of Alpharetta, Georgia; Howard A. Sperling, 44, of San Diego, California; and Robert B. Surles, 62, of Canon City, Colorado. The indictments allege the men contracted with Cornell in June 2003 to build a private prison in Canon City. Cornell placed $13 million in an escrow account to be held until construction was complete.

In August 2003 the trio convinced Cornell to transfer the funds to an Atlanta account, which they claimed was a bank escrow account but was actually controlled by Beaudreault. They then moved the money to their own accounts and withdrew it. Some of the cash was spent at casinos, and one of the defendants bought a $60,000 Mercedes Benz.
Beaudreault and Sperling entered guilty pleas on December 17, 2008 and February 2, 2009, respectively, each to one count of conspiracy. They have not yet been sentenced; the charges against Surles are still pending.

Sources: Atlanta Journal Constitution,

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