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Eric Adler: Missouri vet acquitted of Joplin tornado fraud -- 'I was not going to plead to a lie'

Kansas City Star logoKansas City Star 12/12/2018 By Eric Adler, The Kansas City Star

Dec. 11--More than seven years after a tornado killed 161 people and destroyed nearly a third of Joplin, Mo., a Missouri man stands battered but victorious against another powerful force that all but wrecked his life:

The federal government.

"To be frank, I'm not too happy," said Raul Gonzales of Neosho, who had faced up to 55 years in prison had he been found guilty of the multiple felony charges against him. "I've lost everything. I've lost everything I worked for. I also lost my reputation -- which doesn't matter. I've been fighting this since 2011. It's done more harm to my family than to me."

In 2016, Gonzales, a disabled U.S. Marine who is now 50 years old, was indicted in federal court on 10 felony counts for what the U.S. attorney claimed was a fraudulent scheme to bilk the federal government out of millions of dollars related to the cleanup of debris from the May 22, 2011, storm.

Gonzales, who owned and operated Intelligent Investments Inc. of Joplin, was given a contract by the U.S. Army Corps of Engineers as a small business owned by a disabled veteran.

A condition of the contract was that at least 50 percent of the work be done by businesses in the local Jasper and Newton counties. Under the federal indictment of June 2016, the government claimed that Gonzales was instead recruited to bid on the contract by an out-of state company, DRC Emergency Services, which would do the work, using few or no local resources, while DRC and Gonzales split the profits.

On Friday, following a four-day trial, a jury in Springfield deliberated for about half the day to declare Gonzales not guilty on all 10 counts.

"I'm sure it has been pure hell," his Joplin attorney, William Fleischaker, said in a phone interview on Tuesday with The Star.

In court, Gonzales -- represented by Fleischaker and Dennis Hartley of Colorado Springs -- acknowledged that after the government cut the time of debris removal from six months down to just over four weeks, he was forced to rely more heavily on subcontractors to get the work done.

But his legal team presented evidence that Gonzales and Intelligent Investments had spent more than $318,000 on personnel costs. That personnel logged close to 12,000 man-hours removing debris in July and August 2011. Gonzales testified he believed his employees performed at least 40 percent of the contract.

The team also showed that the federal government, despite its accusation, had never audited Gonzales' work to calculate who had done the work and what expenses had been incurred. The government ceased paying Gonzales after accusations of fraud arose.

"The government has paid for about half the contract," meaning about $3 million, Fleischaker said. "They still owe him over $3.5 million. ... I mean they ruined him. He is a strong guy. He is a Marine Corps veteran. I am expecting that he will get back. ... It's been close to three years. Obviously it is tough on anybody."

Gonzales acknowledged as much to The Star on Tuesday by phone, having lost his business as a result of the indictment, and nearly losing his home, which he said he mortgaged in order to pay his own subcontractors when the government failed to pay him.

When his son, now in high school, was in middle school, he was forced to deal with untrue rumors that his dad was a criminal in jail, Gonzales said.

"First of all, I didn't steal a dime," he said. "When you do a government contract, you have to pay for everything up-front first, and then you ask for reimbursement to get your money back. The way that the people writing these stories has made it appear is that I stole from the United States government."

At some point into the litigation, Gonzales said, the government offered him a plea deal which would have labeled him a felon, but which would have kept him from doing any prison time. He turned it down.

"I knew what I did for the city of Joplin. I was proud of my work. It was an honor to work for the Army Corps of Engineers and to help them with their mission," he said.

But the prime reason he turned it down and opted to go to trial was that, as a Marine and disabled veteran, he felt an obligation to stand up for what he knew was the truth.

"I would have let down my brothers in arms for what they died for," Gonzales said. "I was not going to plead to a lie."

Gonzales no longer works, he said, as the stress of the last few years has exasperated his disability. His wife is a teacher. Their family relies on her salary.

"They still owe me money," Gonzales said. "I'm hoping to close out the contract. Whether I get another dime out of this or not, the damage is done."

He later said, "When I was going through this trial, I really lost faith in our system. Those 12 jurors really restored my faith in the system. It works because there were 12 individuals who could see through the bullcrap."

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(c)2018 The Kansas City Star (Kansas City, Mo.)

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