Real Estate Developer Convicted of Bribery

UPDATE: In an opinion handed down on Aug. 23, 2022, the Fifth Circuit Court of Appeals vacated the below conviction and remanded it for further proceedings.

A Dallas real estate developer has been convicted of bribing two former Dallas City Council members, Carolyn Davis and Dwaine Caraway, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.

Following two weeks of trial, a federal jury convicted Ruel Hamilton, the president of AmeriSouth Realty Group, of one count of conspiracy and two counts of bribery of an agent of a local government receiving federal funds. 

“The people of Dallas deserve true public servants, not those bought and paid for by the city’s elite. By using money to bend elected officials to his will, Mr. Hamilton betrayed the communities he purports to hold dear,” said Acting U.S. Attorney Prerak Shah. “The U.S. Attorney’s Office will not allow a kickback culture to fester at City Hall. To anyone considering this sort of unscrupulous behavior: Think twice. Our prosecutors are tenacious, and we are determined to root out corruption wherever we find it.”

“Public corruption is one of the FBI’s top criminal priorities, it erodes the public’s trust and wastes valuable resources intended for taxpayers," said FBI Dallas Special Agent in Charge Matthew J. DeSarno. "Mr. Hamilton used his influence and money to circumvent the system by bribing two city council members to earn incentives for an affordable housing project and push an agenda to increase his political influence. The FBI and our law enforcement partners will continue to ensure that those who pay bribes, accept bribes and facilitate bribe payments are held fully accountable.”

According to evidence presented at trial, from 2013 to 2015, Mr. Hamilton shelled out tens of thousands of dollars in bribes to Carolyn Davis, who was then serving as chair of the city’s Housing Committee.

In return, Ms. Davis – who pleaded guilty to her role in the scheme prior to her death in 2019 – supported Mr. Hamilton’s Royal Crest housing project, voting to authorize a real estate development loan and resolutions supporting an award of a 9 percent tax credit for Royal Crest.  Ms. Davis supported the Royal Crest housing project, despite the fact that it failed to meet the city’s enumerated multifamily housing priorities. 

In an attempt to disguise the bribe payments, Mr. Hamilton funneled payments to Ms. Davis through a not-for-profit intermediary run by Jeremy “Jay” Scroggins. Mr. Scroggins –  who also previously pleaded guilty – testified at trial that he cashed thousands of dollars’ worth of checks, solicited by Ms. Davis and made out to him personally or to his not-for-profit, “Hip Hop Government.  Mr. Scroggins testified that he used $15,000 for a Freedom Ride Tour in November 2014, and cashed the remainder of the checks, turning most of the money over to Ms. Davis.  The councilwoman told Mr. Scroggins payments would not pose a problem, because people “don’t go to prison for $2,000,” according to a recorded phone call played in court. 

Evidence showed that Mr. Hamilton also paid Ms. Davis directly. Over the course of the conspiracy, Mr. Hamilton forked over cash, and on at least one occasion he invited her to accompany him to the bank to make a cash withdrawal. At Ms. Davis’ urging, Mr. Hamilton also directed campaign contributions to a political protégé.  Further, Mr. Hamilton promised Ms. Davis a job once she was off the counsel.  Evidence showed that Mr. Hamilton paid Ms. Davis in excess of $145,000, once she left the council. 

At one point, Mr. Hamilton became concerned that a former city council member was going through their financial dealings with a “fine tooth comb,” telling Ms. Davis, “she scares me.” Even so, he continued to bribe Ms. Davis.

Three years later, in 2018, Mr. Hamilton paid a $7,000 bribe to councilman Dwaine Caraway, who Mr. Hamilton believed could persuade the mayor to put a paid sick leave referendum on the city council’s agenda.  Mr. Hamilton hoped the referendum would increase turnout in the polls, advantaging his preferred political candidates.

Video admitted into evidence at trial shows the pair meeting at Mr. Caraway’s office on August 3, 2018:

“I want to do that, so… what can I do for you, right now, today?” Mr. Hamilton asks.

“You can answer that bill I just threw out there for about 62 [$6,200] today,” Mr. Caraway responds.  

“Okay,” Mr. Hamilton says. “Can you follow through with the mayor?”

The pair then discuss what Mr. Hamilton should put in the memo line “for posterity” so that “if somebody ever asks, I can come up with a reference.” 

[Video clips available to credentialed press upon request.]

Mr. Hamilton, who was originally charged in February 2019, now faces up to 25 years in federal prison – up to five years for the conspiracy count and up to ten years for each bribery count. (He was acquitted of count of use of an interstate facility to commit bribery in violation of the Travel Act, a count that carried a sentence of up to five years.) His sentencing has been set for Nov. 9, 2021.

The Federal Bureau of Investigation’s Dallas Field Office conducted the investigation with the assistance of Internal Revenue Service - Criminal Investigations. Assistant U.S. Attorneys Tiffany H. Eggers, Chad E. Meacham, Joe A. Magliolo, Andrew Wirmani (fmr.), and Marcus Busch prosecuted the case with support from their appellate liaison, Assistant U.S. Attorney Stephen S. Gilstrap. Chief U.S. District Judge Barbara M. G. Lynn presided over the trial.