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Marshall professor, three others charged in kickback scheme

Charleston Gazette-Mail photo This photo from Marshall University’s website shows engineering professor Andrew Nichols, who was indicted earlier this month for his alleged role in the reported scheme.
Charleston Gazette-Mail photo
This photo from Marshall University’s website shows engineering professor Andrew Nichols, who was indicted earlier this month for his alleged role in the reported scheme.

CHARLESTON, W.Va. — An award-winning Marshall University professor, the president of a highway contracting business and two former West Virginia Division of Highways engineers were charged Wednesday in a kickback scheme involving companies in Putnam County and South Carolina.

Federal prosecutors allege that the men illegally diverted $1.5 million worth of Division of Highways projects to Dennis Corp., a South Carolina engineering consulting firm. DOH engineers received $200,000 in bribes between 2008 and 2013, according to the charges.

“It’s pay-to-play corruption within the Division of Highways,” said Bill Ihlenfeld, U.S. Attorney for West Virginia’s Northern District. “This work was not bid out competitively; it was rigged so this corporation would receive these projects.”

A federal grand jury in Clarksburg returned an indictment two weeks ago charging Marshall civil engineering professor Andrew P. Nichols, 38, of Lesage, with conspiracy to commit honest-services wire fraud, money laundering, obstructing justice and making false statements. The indictment was unsealed Wednesday.

Nichols formerly served as manager of the West Virginia division of Dennis Corp. while working as a senior director at Marshall’s Rahall Appalachian Transportation Institute. He also is charged with lying to federal agents about his involvement in the alleged kickback scheme.

Nichols, a former resident of Point Pleasant who joined the Marshall faculty in 2007, was a finalist earlier this year for the Professor of the Year Award given by the Faculty Merit Foundation of West Virginia. Last year, Marshall gave Nichols the Charles E. Hedrick Outstanding Faculty Award. He gave the winter commencement address at Marshall’s graduation in December 2015.

Nichols is scheduled to be arraigned today before U.S. Magistrate Judge James E. Seibert, in Wheeling.

Nichols lawyer, Mike Frazier, said Nichols hasnt worked for Dennis Corporation since 2009.

“An indictment is merely an accusation, and Dr. Nichols looks forward to vindicating his name through the legal process,” Frazier said in an email Wednesday night. “He is a well-respected professor, and these allegations deal with actions others took long after he left Dennis. We expect him to be fully exonerated.”

Marshall spokeswoman Ginny Painter said in a statement that university officials didn’t learn about the charges against Nichols until Wednesday, and are reviewing the allegations.

“The findings from our internal review of the evidence and the outcome of the criminal process will determine what, if any, employee disciplinary action will be pursued,” Painter said.

Former DOH traffic engineers Bruce E. Kenney II, 60, of Norfolk, Virginia, and James Travis Miller, 40, of Hurricane, are expected to plead guilty to their roles in the alleged scheme, Ihlenfeld said.

Kenney, who left the DOH in 2014, is charged with honest-services wire fraud conspiracy and conspiracy to evade the Internal Revenue Service. Miller is accused of delivering “covert payments” to Kenney in exchange for the DOH doing favors for Dennis Corp.

“Kenney was the rainmaker, but Nichols was behind the scenes making sure all of this could be managed and coordinated,” Ihlenfeld said. “They identified a way to game the system and steer business to this corporation in Columbia, South Carolina, and the corporation agreed that it would take care of those who were sending business its way.”

 Prosecutors filed the charges against Kenney and Miller in the form of an information, which is similar to an indictment and can’t be filed without a defendant’s consent. It often indicates that a defendant has agreed to plead guilty.

DOH spokeswoman Carrie Jones said the agency has “no tolerance” for employees who take part in illegal activities.

“[The] DOH remains committed to disciplining any employee who abuses the public’s trust,” Jones said.

Mark R. Whitt, 52, of Winfield, owner of Bayliss & Ramey Inc., a highway electrical contractor based in Scott Depot, also was charged in an information. Whitt’s company has the traffic signal maintenance contract with the state. He is charged with wire fraud conspiracy.

Whitt filed to run for the Putnam County Commission this year, the only Democrat to do so, but dropped out of the race without explanation over the summer.

Kenney, Whitt and Miller could not be reached for comment Wednesday.

Prosecutors filed a separate information charging Bayliss & Ramey, as a company, with wire fraud conspiracy.

The firm submitted invoices to the state with a 20 percent markup, to ensure the company would be compensated for its role in the alleged kickback scheme, according to the charges. Bayliss & Ramey illegally funneled construction work to the South Carolina company, federal prosecutors allege.

Since 2006, the DOH has paid Bayliss & Ramey $65.4 million, records show. Dennis Corp. has received more than $1 million directly from the DOH, but also was paid as a subcontractor through Bayliss & Ramey.

More people are expected to be charged in the alleged scheme in the coming weeks, Ihlenfeld said.

Ihlenfeld’s office, the state Legislature’s Commission on Special Investigations, the State Police, the FBI and the IRS started investigating the alleged kickback scheme in 2015. Investigators received a tip the day after former DOH Equipment Division chief Bob Andrew was indicted on federal charges. Andrew killed himself with a shotgun just hours after being indicted on racketeering charges.

Reach Kate White at [email protected], 304-348-1723 or follow @KateLWhite on Twitter. Reach Eric Eyre at [email protected], 304-348-4869 or follow @EricEyre on Twitter.

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