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Fraudsters Sentenced in Cornell Prison Construction Scheme

A man who bilked almost $13 million from Cornell Corrections Corp. has been convicted of federal fraud and conspiracy charges, while two co-defendants pleaded guilty.
In February 2010, Robert B. Surles was convicted by a federal jury in Atlanta, Georgia of conspiracy and 15 counts of wire fraud as part of a construction scam.

Cornell hired Surles to build its Southern Peaks Regional Treatment Center in Colorado in 2003. The company transferred almost $13 million to an account where the funds were supposed to have been held in escrow, but Surles and his co-defendants gained control of the account and Surles spent $605,000 on himself. [See: PLN, April 2009, p.47].

“This defendant fraudulently induced a company to transfer approximately $13 million into an ‘escrow account’ that turned out to be nothing but a piggy bank for the defendant and his co-conspirators,” said U.S. Attorney Sally Q. Yates.

Surles’ co-defendants, Edgar J. Beaudreault, Jr. and Howard Sperling, took plea deals and testified against him. Surles was sentenced on June 22, 2010 to ten years in federal prison and three years’ supervised release. Beaudreault received a 37-month sentence plus three years’ supervised release, while Sperling was sentenced to almost 62 months and three years’ supervised release.

“These defendants were part of an elaborate fraud scheme that ironically involved the construction of a prison. They will now experience how business is conducted inside a real prison,” said Yates.

All three co-defendants were ordered to jointly and severally pay $5,417,500 in restitution to Cornell. See: United States v. Surles, U.S.D.C. (N.D. Georgia), Case No. 1:08-cr-00345-CC-AJB.

Sources:, U.S. Attorney press releases

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Related legal case

United States v. Surles