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THE STATE OF TEXAS COUNTY OF TRAVIS
)( )( )(
TRAVIS COUNTY, TEXAS
AFFIDAVIT FOR WARRANT OF ARREST AND DETENTION
The undersigned, after being duly sworn by me, on oath, makes the following statement: I have good reason to believe and do believe that Charles Anthony (AKA Charlie) Maiouff, Jr., W/M, 12/27/1957, (hereinafter "Malouff') on or about and between the dates of February 1, 2009 through November 30, 2010, and on or about or between September 24, 2010, and August 3, 2011, in the County of Travis and the State of Texas, did then and there commit the offense of:
Securing Execution of a Document by Deception - First Degree Felony
Affiant is Sgt. Inv. Lori Carter, an investigator employed by the Travis County District Attorney's Office for six years. Affiant is a certified peace officer of the State of Texas and has been so for fourteen years. Affiant has training and experience in the investigation of financial crimes such as Securing Execution of Document by Deception, Money Laundering, Theft, Misapplication of Fiduciary Property, Tampering with a Governmental Record and other white collar crimes, especially fraud perpetrated against government agencies. Affiant's belief of the foregoing statement is based upon her interviews with Travis County Sheriffs Deputy Toby Miller, Former CM Energies President Dana Malouff-McCoy, Professor Ron Stearman and Assistant Professor Jayant Sirohi of the Aerospace Engineering and Engineering Mechanics Department at the University of Texas at Austin, Mayor Deane Armstrong of the City of Jonestown, Former eM Energies Engineering Consultant Fred Herber, Former CM Energies Electrician John Karlson, Former CM Energies Electrical Engineer Aaron Knapek, Former CM Energies Employees Michelle Cook and Eric Graham, Former State Energy Conservation Office (SECD) Supervisor Lisa Elledge, Chief of the Criminal Investigations Division for the Comptroller's Office, Martin Cano, and other Comptroller officials, Special Agent Rosemarie Peterson of the Department of Energy and other Department of Energy representatives, Senior Forensic Anal yst Robin Timmins, and Management Representative from Crescent Plastics. All of the above are credible persons and most of them live and/or work in Austin, Travis County, Texas. In addition, affiant bases her belief on her review of documents, including communications and other documents provided by the above witnesses, the City of Jonestown American Recovery and Reinvestment Act (ARRA) grant application, Request for Applications (RFA), and other documents related to this ARRA grant and SECD's procedures and operations obtained from the Comptroller's Office of the State of Texas pertaining to the City of Jonestown's application for the federal grant designated as ARRA RFA No. RE-AG 1-2010, financial records associated with the grant, criminal history records, credit records, bank records, employment records, and purchase/manufacturing records obtained pursuant to grand jury subpoena, the content of computers/digital storage devices in the possession of the Texas Comptroller, and a recording of a meeting held in the summer of 2010. _.,,,",::-,,.~71 -)/~'_', -,1 . - t Cou-~ • • ! "'c~r"~ t-I ,.,..+ :5L. of Travis County, Texas
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At • •.._ .... M. Amalia Rodriguez-Mendoza, Clerk
The Criminal Complaint and Affiant's Investigation
On August 3, 2010, Affiant received a complaint from Travis County Deputy Toby Miller, the former General Operations Manager for CM Energies, a small wind energy company in Jonestown, Texas. Although Deputy Miller is a Travis County Sheriff's Deputy, he reported the offense as a concerned citizen and not in his capacity as a Travis County Deputy. Miller reported that he had personal knowledge that the City of Jonestown had applied for a grant of federal American Recovery and Reinvestment Act (ARRA) funds to do a wind energy project using CM Energies as the subcontractor to supply, install, and maintain wind energy systems for the City of Jonestown. This application occurred while Miller was still employed with CM Energies. Miller reported that the grant application was written by Charlie Malouff Jr., a resident of Jonestown, the founder of CM Energies and the owner of CM Energies International. Specifically, Miller stated that Malouff told him that he wrote the grant application. Miller reported that Malouff entered into an agreement with Jonestown to be the contractor on the grant. At the time of Miller's complaint he believed that the grant was pending approval from the US Department of Energy. Miller reported that the Department of Energy requested that a Feasibility Study/Environmental Assessment be done prior to approval and subsequently awarded the City of Jonestown $100,000 to complete the feasibility study. The City of Jonestown, in turn, retained CM Energies to complete the feasibility study. Miller reported that throughout the entire process, Malouff seemed to know a great deal of things that were not readily available to others concerning the grant. Miller reported that Malouff was overseeing the feasibility study despite an ongoing personal relationship with the grant administrator, Mary 10 Woodall, who is assigned to the Texas State Comptroller'S State Energy Conservation Office. Also, Malouff was under the impression that CM Energies had already been chosen by the City of Jonestown as the contractor who would install the turbines. Miller reported the proposal incorporated 25 sites in the Jonestown, Travis County area for the installation of these devices. Miller reported that at the time the project started there had been no effort made to secure these locations. Miller reported that private property was obtained over time through agreements between the City of Jonestown and the property owners. The employees of CM Energies were advised of which properties were going to be involved and wind studies and the feasibility study were started. Miller reported that Malouff stated that CM Energies could ask for and receive an extension of 30 days for inclement weather. Miller reported that this extension was granted, along with an additional $100,000. Miller reported that this extension and the additional funds were obtained with the assistance from and information provided by Mary 10 Woodall. Miller explained that Woodall was telling Malouff specifically what to ask for in order to ensure that additional monies were granted. Malouff would then go to the City Manager and provide him with the information for the request.
Miller reported that CM Energies asked for a second extension and additional money. Miller reported that the money was asked for because Woodall informed Malouff that the extra monies would be approved. Miller reported that during the course of the permitting process, each site was "surveyed", photographed, documented and specific questions were answered at length by experienced and degreed professionals employed by CM Energies. As time drew closer to submitting these sites for approval, Malouff asked to see copies of the packets that had been prepared by the employees so he could proof read them. Miller reported that in Malouff's proof reading, he deliberate Iy changed wording of the packets so that it contained information that was patently false or deleted information deemed necessary and placed there by the afore mentioned employees. When this was brought to Miller's attention he notified CM Energies' General Counsel, Michael Guevara who reviewed Malouff's changes and refused to allow his "proofreading" changes to be made permanent. Malouff also attempted to have the technical writer, Michelle Cook, affix her signature, in blue ink, to a signature page and leave it in his office without it being attached to the permitting packet which she was swearing was truthful. Cook refused to provide Malouff her signature and instead of turning them over to him, she ensured that each packet was submitted to the permitting agency as required. Miller reported that Malouff was outraged by not being able to make the falsifying changes he wanted. Miller believes, based upon his observations, Malouff attempted to change, falsify and/or alter information in documents that were to be submitted to State and Federal agencies in an attempt to sway the permitting process. Miller reported that on August 2nd, 2010, he was informed by another employee that they were being ordered by Malouff to change the information in the packets that they were submitting to the Department of Energy (DOE). Miller further reported that he, the President of CM Energies, Dana McCoy, and the General Counsel, Mike Guevara, shared a concern that Malouff has been receiving insider information from MaryJo Woodall that she would have access to by virtue of her position at the Comptroller's Office. Miller explained that he was copied on an email sent by Woodall to the City Manager that stated she would be "assisting Mr. Malouff in his final report to DOE." Miller advised that he believed it was inappropriate for the subcontractor, Malouff, to be the writer of the grant and that it is inappropriate for the administrator of the grant, Woodall, to assist the writer/subcontractor in reporting on the grant by altering documentation that is already presented to a Federal Agency. Miller also reported Woodall is involved in an inappropriate personal relationship with Malouff, the grant writer/subcontractor. Miller further explained that Woodall informed their General Counsel, Mike Guevara, that eM Energies could pay Malouff over $30,000 dollars as a consultant. Miller reports, to his knowledge, Malouff has provided no "consultation" and does not believe he is qualified to provide any such
consulting services because this is Malouff's first wind energy project, he is not an engineer, and has no technical expertise. Miller reported that this is additionally inappropriate because Malouff is the CEO of CM Energies and the subcontractor for the City of Jonestown. Miller reports that, during the time that he was still employed by CM Energies, Malouff continued to press Guevara for money for "consulting fees." After receiving the complaint from Miller, Affiant was assigned to investigate the above described allegations. Affiant informed the DOE/OIG and the Comptroller's Office of the allegations and both agencies have fully assisted in this investigation and have provided Affiant with critical information and important documents. During the course of the investigation Affiant has interviewed numerous witnesses and has reviewed numerous documents and discovered the following: Affiant interviewed several former employees of CM Energies and the Mayor of Jonestown. Those witnesses reported to Affiant that Malouff is the founder and true proprietor of CM Alternative Energies Inc., CM Alternative Energies, CM Energies International, and CM Energies. Through additional interviews with Complainant Deputy Toby Miller and Malouff's daughter, Dana Malouff-McCoy, Affiant has learned that Malouff has avoided putting his name on documents associated with the company and listed his daughter Malouff- McCoy as President of CM Energies on government paperwork. Malouff-McCoy and other witnesses stated that she was listed as the president so that the company would be perceived as a minority-owned company and because Malouff has a felony federal conviction on his record. Malouff-McCoy stated to Affiant that she had a full time job and did not have the time to devote to the position at CM Energies. Nevertheless, Malouff -McCoy agreed to take the position of president as a favor to her father (Malouff) because his employment options were limited after the federal conviction. Malouff would bring her documents to sign at work during her lunch hour. Malouff-McCoy stated that Malouff was adamant that his name not be on any of the government documents, yet he signed other documents as "CEO" of the company. Affiant has determined through consultation with the Comptroller's Office of Texas and the U.S. Department of Energy, that the City of Jonestown, which is located in Travis County, Texas, applied for DOE federal grant funds (the aggregate amount of the funds totaled over $2,000,000.00) to implement a wind energy project to supplement the City's energy supply. Affiant has further determined that the City of Jonestown was awarded the above grant and the City retained Malouff's company, CM Energies, as the sole subcontractor on the grant. Further, the above sources have informed Affiant that all of the over $2,000,000 in grant funds has been disbursed to the City of Jonestown, as reimbursements of expenses incurred (grant recipients are required to submit documentation in order to receive payments of the ARRA grant funds). Jonestown City Administrator Dan Dodson is named as the "Project Director," "Designated Responsible Employee," and "Principal Investigator" for the City of Jonestown on the grant paperwork. Affiant has determined through agency representatives, Deputy Miller, and review of government documents that the grant coordinator of this grant at the Texas Comptroller's Office is an individual
named Mary Jo Schiefen Woodall (AKA Mary Jo Rowan). Your Affiant has interviewed the former supervisor of the State Energy Conservation Office (SECO) at the Comptroller's Office, Lisa Elledge. Elledge informed Affiant that Woodall was responsible for administrating the City of Jonestown grant, and that Woodall helped choose the committee that rated the grant appl ications, that Woodall had access to the online reporting system used for the documentation supporting payments on the grant, and that Woodall gave the initial approval for all the payments on the grant that was relied upon by others in the review process. Elledge stated that the vouchers authorizing each cost reimbursement of ARRA grant money to the City of Jonestown would be reviewed and approved by Woodall and then would go to the SECO supervisor for approval. Affiant, through the interviews with Malouff-McCoy, Deputy Miller, and other former CM Energies employees, learned that grant coordinator Woodall has actually been a long time close friend and associate of Malouff and Malouff's family. Woodall went to high school with Malouff, travels frequently to San Antonio with him to visit his family, and has a close relationship with Malouff's mother (Malouff-McCoy's grandmother). Another witness, John Karlson, who was the chief electrician for CM Energies for a period of time in 2010, informed Affiant in an interview on June 13, 2011, that he was familiar with Malouff's motorcycle and, during a routine electrical service call to Woodall's residence in Cedar Park, Texas, saw Malouff's motorcycle parked alongside Woodall's motorcycle in Woodall's garage. Further, Malouff was present at Woodall's home at the time. Deputy Miller informed Affiant that Malouff regularly parks his motorcycle in Woodall's garage. On September 26, 2011, Affiant personally observed Malouff's motorcycle parked in Woodall's garage. Karlson and other witnesses informed Affiant that Malouff and Woodall have taken trips together on their motorcycles. Former CM Energies Project Manager, Deputy Toby Miller, informed Affiant that he has seen Malouff driving Woodall's silver 2002 Ford F150 extended cab pickup several times, including once on August 2, 2011, and saw Malouff and Woodall attending a social function together as a couple. Your Affiant has interviewed other former employees of CM Energies, including Eric Graham and Michelle Cook, who corroborated Miller's allegation that Malouff wrote the grant application and paperwork submitted by the City of Jonestown to secure the over $2,000,000 in grant monies. The Mayor of Jonestown stated to Affiant that Malouff worked with Dan Dodson to write the grant application. In a subsequent conversation with Miller, he stated to Affiant that Woodall assisted in the preparation of the grant application. Based upon interviews with Dana Malouff-McCoy; John Karlson; eM Energies' engineering consultant, Fred Herber; and former CM Energies engineer, Aaron Knapek, your Affiant has learned that CM Energies did not have a working prototype of its vertical axis wind turbine (the turbine that the City of Jonestown had selected for its wind energy program) at the time the City of Jonestown grant application was submitted. In fact, to the best of these witnesses' knowledge, Clvl Energies has never constructed a wind turbine that could generate more than 1 to 2 kW of power. These witnesses indicated that they had all informed Malouff of the critical problems with the wind turbines.
Further, witness Fred Herber, CM Energies' consulting engineer, stated that the wind turbine prototype that CM Energies had constructed was not structurally sound. Herber indicated that he had informed Malouff of this structural problem and continued to do so well after the grant application had been submitted. In the spring of 2011, former eM Energies engineer Aaron Knapek photographed the one full-scale wind turbine prototype that eM Energies had constructed, which is located at its manufacturing location in Taylor, Texas. The photograph, viewed by your Affiant, demonstrates that this turbine has suffered a structural failure by the shaft breaking off. Former CM Energies consulting engineer, Fred Herber, viewed this photograph in Affiant's presence and stated to Affiant that the turbine had failed in the same manner he had predicted and stated that he had warned Malouff of the risk of such a structural failure while employed as a consultant by eM Energies. Affiant's review of the grant paperwork has revealed that the City of Jonestown and subcontractor Clvl Energies represented to the Comptroller of Texas and the United States Department of Energy that CM Energies was prepared to install 25 wind turbines (later modified via amendment to 18 turbines), each of which is capable of producing 20 kW of energy. The grant documents represent that these wind turbines were "commercially available," that eM Energies has "project turnkey ability" and "ready to go manufacturing capabilities." Further, the grant documents state that "the City has verified the manufacturer's claim of having its technology independently validated." Affiant has interviewed DOE personnel, including DOE/OIG Special Agent Rosemarie Peterson and the Technical Project Officer on the DOE ARRA grant. These personnel have informed Affiant that the use of the above terms (e.g., "commercially available," "turnkey," and "technology independently validated") were important to ensure that the grant would be selected by SEeD. These personnel also stated that the presence of these terms in the grant applicant was important because federal law and the rules for the grant provide that these ARRA grant funds could not be spent to fund research and development of renewable energy technologies not commerciall y available. The Technical Project Officer stated that the funds were only for technology that was already proven. It cannot be "experimental or still in the research stage." Moreover, the grant documents specified that the proposed project/technology must be "ready to implement upon award." Likewise, the former supervisor of SECO, Lisa Elledge, stated that "Commercially Available" was an important criterion in the grant selection process-this term meant that the applicant was not seeking to fund research and development of a technology. This grant was supposed to only fund renewable energy technologies that were already developed, proven, and ready to install. The grant application describes two University of Texas professors on the grant paperwork as technical consultants working for CM Energies. Affiant interviewed the two professors described in the grant application, Dr. Jayant Sirohi and Dr. Ron Stearman, who, in 2009, were both with the University of Texas Department of Aerospace Engineering and Engineering Mechanics (Dr. Stearman is now retired). Affiant determined through these interviews that, though these professors supervised students who performed student projects testing various aspects of scale models of CM Energies' wind turbines in 2008-2009, neither of these professors were ever employed as a consultant for the company. Further, neither of them felt that the company's product was commercially viable at the time of their exposure to the product during the student study. Neither of
them was aware that he had been listed as a consultant for the company on the grant paperwork. One of the professors, Dr. Jayant Sirohi, actually worked as a consultant for a competing wind turbine company. Moreover, both professors indicated that the student study of the CM Energies turbines indicated flaws in the design of the turbines and could not document any significant wind energy production by the turbines. The witnesses informed this Affiant that both Malouff and Woodall were present during the final student presentations at the University of Texas at the end of the spring semester in 2009 where the students reported on their findings. Woodall helped obtain grant funding for the student projects and received copies of the students' findings and final reports. In fact, witnesses who were present at these presentations told this Affiant that Malouff actually confronted a student concerning his group's findings of low energy output by the turbine model, arguing that the group's results should have been higher. Additionally, Dr. Stearman was under the impression that Woodall intended at some point to take a position with Malouff's company. Former CM Energies Project Manager, Deputy Toby Miller, informed Affiant about a meeting in July or August of 2010, in which several principal employees of CM Energies, including Miller, Malouff-McCoy, Mike Guevara, and electrician John Karlson met with Jonestown City Manager, Dan Dodson, concerning the fact that CM Energies could not produce the wind turbine technology the City sought to fund with the DOE federal grant monies. Miller voluntarily made a video recording of the meeting using a hidden camera. Malouff was not present at this meeting, but was a primary subject of conversation. Affiant has reviewed this recording. In the meeting, these witnesses specifically told Dodson that the technology that Malouff was promoting "did not exist" and said that Malouff may have caused the City to make fraudulent representations on documents filed with the government in order to get the wind turbine grant. Dodson responded that defrauding the federal government was "an oxymoron" and that he was not going to "lose sleep" over "a little white lie ... to get a grant." Dodson clearly indicated that he intended to continue working with Malouff because CM Energies was Malouff's company. Witnesses, Malouff-McCoy, Karlson, and Miller, independently recalled this meeting and also Malouff-McCoy and Miller informed Affiant that Dodson had represented to them that he was just going forward with the wind turbine grant "as a favor to Charlie." Malouff-McCoy also showed affiant an email she received from CM Energies' General Counsel, Mike Guevara. In this email, dated August 17, 2010, Guevara stated: I informed MJ that there were some things that I did not know when the grant was submitted and if I would have had the truth I would not [sic} signed the grant. Malouffidentified "MJ" as Mary Jo Woodall. Malouff-McCoy also informed Affiant that Guevara talked to Woodall several times in the summer of 2010 about the ongoing issues facing CM Energies and Malouff-McCoy found it "very hard to believe" that Woodall did not know about the problems with the turbines at that time. Based on a review of the grant documents, Affiant has determined that the Comptroller of Public Accounts Grant Agreement for Distributed Renewable Energy Technology Program was executed on November 30, 2010, by the Deputy Comptroller and signed by Deane Armstrong, the Mayor of Jonestown. This agreement contains a finding that "the City of Jonestown is eligible to receive an
award of ARRA grant funding." The amount of the grant award set out in the agreement is $1,836,400.00 (though other paperwork viewed by Affiant indicates that the City received $200,000 in DOE ARRA grant funds prior to this award). The verity of the aforesaid grant agreement and its attachments was signed and sworn to in "Attachment J-2" to the grant application by Michael A. (Mike) Guevara, General Counsel and Contracts Manager for CM Energies. Miller has informed this affiant that Guevara is CM Energies' attorney and is also the personal attorney for Malouff. Affiant believes that Guevara was acting as the employee, representative, and agent of Malouff, through his company, CM Energies, in signing Attachment J-2. Attachment J-2 contains the following sworn statements: I Michael A. Guevara, an authorized representative of: CM Alternative Energies, Inc., a corporation, that is receiving American Recovery and Reinvestment Act of 2009 (ARRA or the Act) funding, hereby swear and affirm that ... all of the statements made and information provided herein, including statements made and information provided in any attachments are true, complete, and correct, to the best of my knowledge .... I understand that it is afederal crime ... to ... knowingly and willfully make any materially false, fictitious, or fraudulent statement or representation, or to make or use any false writing or document knowing that it contains the same .... I understand that it is a felony offense under Section 37.10, Texas Penal Code, to knowingly make a false entry in, or false alteration of, a governmental record, or to make, present, or use a governmental record with knowledge of its falsity, when the actor has the intent to harm or defraud another. In addition, the grant application documents included a letter signed by "Michael A. Guevara," in which Guevara stated: CM Alternative Energies, Inc., has determined there are no existing or potential possible conflicts of interest or issues that might create appearances of impropriety relative to the City's and our future Subcontractor's submission of this application, possible selection as Subcontractor or our performance toward completion of the project. CM Alternative Energies, Inc. has not had past or present contractual, business, financial or personal relationships with the Comptroller. CM Alternative Energies, Inc. affirms that it has not given, nor intends to give, at any time hereafter, any economic opportunity, future employment, gift, loan, gratuity, special discount, trip, favor, or service to a public servant or any employee or representative of same, in connection with this RFA. On September 30~2011, Affiant spoke with the Texas State Comptroller'S Chief of the Criminal Investigations Division, Martin Cano, who had interviewed Comptroller's Office officials at Affiant's request. Chief Cano informed Affiant that the Deputy Comptroller who signed the Comptroller of Public Accounts Grant Agreement for Distributed Renewable Energy Technology
Program stated that, had he known of the existence of fraudulent or false representations in the Jonestown grant paperwork, "of course" he would not have signed the grant agreement. Moreover, he stated that the grant agreement would never have been presented for his signature as individuals below him in the chain of command, such as the SECO director and agency attorneys, would have flagged the grant application and initiated an investigation of the fraud. On or about April 29, 2011, all the DOE federal grant funds had been paid out to the City of Jonestown according to DOE representatives. And the DOE representatives informed this Affiant that they believed construction should be completed on the Jonestown wind energy project. However, Affiant learned that an inspection of the sites designated for wind turbines in the Jonestown area conducted by DOE/OIG Special Agent Rosemarie Peterson on August 22, 2011, revealed that only two of the eighteen turbines were fully assembled and appeared to be operational, though it was not clear if they were tied in to the electrical grid as required by the grant agreement. Eight other turbines were in various stages of disrepair or partial construction and eM Energies appeared to have not even started construction on the remaining turbines required by the grant agreement. Additionally, Affiant has asked Travis County District Attorney's Office employee, Senior Forensic Analyst Robin Timmins, to review numerous bank records received pursuant to grand jury subpoena. These records include the bank records of CM Energies, CM Energies International, Mary Jo Woodall, Central Texas Plastics, Charlie Malouff, and the City of Jonestown. Based on her review of these bank records, Timmins has determined that the City of Jonestown has now paid 100% of the $2,000,000 in DOE federal grant funds it received from SECO to Clvl Energies and these funds have been deposited in CM Energies' bank accounts. Subsequently, an extraordinary number of transfers of these funds among the seven accounts have occurred in varying amounts among the company's several bank accounts. Further, Affiant obtained voucher and invoice records from the Comptroller's Office for the City of Jonestown grant. These documents authorized the payments of DOE ARRA grant funds to City of Jonestown to reimburse the City for its expenses on the wind turbine project. Affiant specifically viewed SECO Accounting Division Internal Purchase Voucher No. 911S0350. This voucher authorized a payment of $865,040.00 to the City of Jonestown to reimburse a payment of that same amount made by the City of Jonestown to CM Energies on December 3, 2010. The voucher was supported by the following attachments: a check from the City of Jonestown to CM Energies for $865,040.00, an invoice from CM Energies to the City of Jonestown requesting payment of $865,040.00 for Wind Energy Bases, Tower Systems, Blades and Attachments. The CM Energies invoice had two invoices attached documenting its alleged expenses totaling $865,040.00. One of these invoices was from a company called Central Texas Plastics, LLC, located at 400 Fourth Street in Marble Falls, Texas. This invoice was for "blades, attachments, and nuts and bolts." The total amount billed by Central Texas Plastics on this invoice was $590,040.00. Voucher No. 911S0350 was approved on December 7, 2010, by Lisa Elledge, Program Director of SECO. The payment was "requested for dual entry" by "MJ Woodall." Timmins and Affiant reviewed Secretary of State filings for Central Texas Plastics and determined that Central Texas Plastics was created on September 29,2010, with the following "governing
persons": William V. (Bill) Cornelius and "CM Energies International, LLC." On October 19,2010. Bill Cornelius filed an amendment removing CM Energies International, LLC, from the Secretary of State records for ownership of Central Texas Plastics. Affiant viewed the address on the Secretary of State paperwork for the "Organizer" of Central Texas Plastics. This address was 400 Fourth Street, Marble Falls, TX 78654. A Google maps search revealed the location is a small house in Marble Falls, Texas, with a workshop built onto the side of the house. Affiant confirmed with Marble Falls Criminal Investigations Division (MFCID) that Cornelius resides at this address. MFCID indicated that they had responded to domestic violence calls on Cornelius in the past at this residence and Cornelius has repeatedly made known his antipathy toward Marble Falls police officers. Affiant reviewed Texas Workforce Commission (TWC) records and determined that Cornelius is an employee of CM Energies. Bank records show that Central Texas Plastics did not open a bank account until November of 2010. On December 1, 2010, Central Texas Plastics had only approximately $260.00 in its account. Then the company received the first big installment of Jonestown DOE federal grant funds from CM Energies in December of 2010. Timmins reviewed bank records and determined that CM Energies paid $590,000 to Central Texas Plastics on December 8, 2010, shortly after receiving a large payment of DOE federal (ARRA) grant funds from Jonestown. The same day, Central Texas Plastics (Cornelius) wrote checks totaling $220,000.00 back to CM Energies. These checks totaling $220,000 were deposited into the CM Energies International account. The bank records reveal that Malouff is the only authorized signator on this CM Energies International account. And, though some of the expenditures in this account appear to be business-related, many of the transactions occurring in this account appear to be cash withdrawals, checks written to Malouff himself, and expenditures on personal items at restaurants and retail establishments, such as "Sassy Lassie." The bank records revealed that this same pattern (of CM Energies paying grant funds to Central Texas Plastics and then Central Texas writing large checks back to CM Energies International) happened several times throughout the period when the grant funds were being expended (Dec. 2010- August 3,2011). Each time CM Energies wrote a large check of grant funds to Central Texas Plastics and then Central Texas Plastics wrote a sizable check back to CM Energies International, which was deposited by Malouff into the CM Energies International account with the notations like "product development" and "trade show development." The total of these "cash-back" transactions from Central Texas Plastics to CM Energies was $669,994.56. Timmins created the following table setting out these transactions based on her review of the bank records:
Checks From CME to Central Texas Plastics AND From Central Texas Plastics to CME International
12/8/2010 12/8/2010 12/8/2010 12/8/2010 12/14/2010 12/16/2010 12/20/2010 12/22/2010 12/23/2010 12/27/2010 12/30/2010 1/4/2011 1/7/2011 1/18/2011 2/1/2011 2/8/2011 2/10/2011 2/21/2011 2/21/2011 2/17/2011 2/22/2011 3/8/2011 3/15/2011
Central Texas Plastics, LLC CM ENERGIES INT'L CM ENERGIES INT'L eM ENERGIES INTERNATIONAL CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L Central Texas Plastics, LLC CM ENERGIES INT'L CM ENERGIES INrL CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L
CMEto CenTx Plas
CenTx Plas toCME Inti
990 1004 1005 1003 1008 1009 1010 1012 1013 1014 1015 1016 1017 1018 1019 1020 1021 1010 1025 1024 1026 1029 1030
590,040.00 20,000.00 50,000.00 150,000.00 22,500.00 2,104.56 10,000,00 6,290.00 13,000,00 75,000.00 10,000,00 6,500,00 36,000.00 8,000,00 3,000.00 10,000.00 3,500.00 200,000.00 40,000.00 5,000.00 35,000.00 30,000.00
27,000.00 3/18/2011 3/25/2011 4/4/2011 4/4/2011 4/13/2011 4/20/2011 4/19/2011 5/3/2011 5/11/2011 5/16/2011 5/19/2011 5/24/2011 5/27/2011 6/10/2011 6/15/2011 6/26/2011 7/5/2011 7/15/2011 8/3/2011 1031 1032 1017 1034 1036 1044 1043 1047 1050 1052 1053 1054 1056 1058 1059 1060 1062 1063 1064 eM ENERGIES INT'L eM ENERGIES INT'L Central Texas Plastics, LLC CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L eM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L eM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L eM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L CM ENERGIES INT'L 175,480.00 10,000.00 12,000.00 12,000.00 4,500.00 15,000.00 17,000.00 2,500.00 2,000.00 2,000.00 500.00 1,000.00 1,000.00 1,000.00 1,600.00 800.00 200.00 15,000.00 9,000.00
Moreover, Affiant contacted another company, Crescent Plastics, which subsequently provided documents and information pursuant to grand jury subpoena. The bank account records reviewed by Timmins show that CM Energies made a payment to Crescent Plastics, but the company was not mentioned by CM Energies in its invoice submissions to SECD. Affiant determined that Crescent Plastics actually manufactured blades and blade attachments which appear to be sufficient to equip CM Energies' 18 Jonestown wind turbines. Crescent Plastics executives informed Affiant that Malouff and Cornelius had traveled together to Indiana to meet with Crescent Plastics representatives on two occasions. CM Energies and Central Texas Plastics paid a total of $313,171.61 to Crescent Plastics for the manufacture of blades and attachments. Yet CM Energies
paid a total of over $960,000.00 in grant funds to Central Texas Plastics allegedly for this same purpose. The Criminal Investigations Division of the Comptroller's Office (CID) worked with a forensic computer expert employed by the Comptroller, to forensically image the contents of Mary Jo Woodall's computer in a manner that would not alter the contents. CID then provided Affiant with access to the imaged copy of Woodall's computer hard drive and made copies of many of the files found on the imaged drive. Affiant has subsequently examined those copies of Woodall's computer files provided by CID. Affiant has thereby discovered that grant coordinator Woodall kept documents on her work laptop computer concerning the business affairs of CM Energies dating back three years and also possessed business documents of Malouff's prior business venture known as "Team Ace-It," indicating that she helped design the fax sheet and price list for Team Ace-It. Timmins' review of bank records revealed that Woodall invested $1,600 in Team Ace-It, as well. Further, Affiant's review of Woodall's emails and documents show that Woodall appears to have assisted in drafting CM Energies contracts and other documents unrelated to the Jonestown grant, attended CM Energies company gatherings, and participated in making important company management decisions. One email affiant viewed on Woodall's work computer, sent by Malouff in August of 2008 (over a year before the 1.8 million dollar Jonestown grant application was submitted), shows that Malouff informed employees and others that Woodall was the primary contact for CM Energies while he traveled, telling the recipients of the email that Woodall: knows exactly where we are, what Ilwe need, when, and knows the whole complete picture. Her decisions are as good as mine. In a May 2009 message that Affiant viewed on Woodall's work computer, Malouff sent Woodall a copy of an email he had sent to two eM Energies officers with the message that the attached Power Point marketing presentation was presented to a CM Energies client in Panama and will be presented in Mexico City as well. The attached Power Point features a letter on Texas Comptroller letterhead signed by Woodall containing the following statement: "SECO will provide continued support for the initiative with hope that the technology will become available to the general public as well as private and public applications." This Woodall letter suggesting that SECO would provide continued financial support of CM Energies' wind turbine project was dated October of 2008, two years before Jonestown's grant application was finally approved. Further, Affiant viewed photos stored on the Comptroller computer network in Woodall's files. One of these photos depicted Malouff and Woodall posing together as a couple in a relaxed social setting. Another picture depicted Woodall and Malouff playfully sticking their tongues out at each other. And, in another photo, Malouff posed on his black Harley motorcycle with Woodall's grandson, who is holding a teddy bear. Affiant was advised by ChiefCano that Woodall's laptop computer was temporarily removed from her office space by IT personnel in July of 2011. At that time, IT personnel observed that an external stick or thumb drive was plugged into the work laptop. Woodall identified this stick drive as her personal property and said that she used it for work and it contained grant contract information. The thumb drive was scanned for viruses and then it was returned to her. Former CM Energies President, Dana Malouff-McCoy and other former CM Energies employees have informed
Affiant that Malouff is known to possess a smart phone, at least one laptop computer, and a black case containing multiple thumb/stick drives, which he often keeps with him at work. He is also known to keep paper files of company business at the above described location. Additionally, Miller informed Affiant on October 3, 2011, that he had seen Woodall at Malouff's house on numerous occasions at different times of the day. Also, Miller stated to Affiant that Malouffhad keys to Woodall's house. On one occasion in 2010, Miller stopped by Malouff's house to pick something up and Woodall was there. On this occasion, it was dark and no one else but Malouff and Woodall were at the house when Miller arrived. Miller complained that he was always having to put out fires started by Malouff. Malouff responded that it would all soon be over and. "It will all be worth it." Woodall then said to Malouff, Well, I remember us standing right here and I told you, "There Miller said that Malouff then replied, "Yup." Miller and other former employees of CM Energies have informed Affiant that Malouff told them that, if he ever believes that he is being investigated by the government, he will move his business to Mexico, where he can keep his guns. Malouff-McCoy said that Malouff told her that, if he thought he were being investigated, he would flee to Mexico and "throw her under the bus." Further, Miller and other former employees of eM Energies have informed Affiant that Malouff has a wealthy friend named Howard Reed with a ranch in Mexico, to which Malouff has traveled in the past on more than one occasion. Also, on August 9, 2011, Miller stated to Affiant that Malouff told him that he intended to pursue business opportunities in Mexico and that he was using the Department of Energy grant money to develop a prototype of his wind turbine so that he could "show it to the Mexican Government to prove that he has a product." Miller expressed concern about the Department of Energy to Malouff and Malouff told him, We don't need to worry about the feds. All I need to do is file monthly reports and show progress. In addition, Miller and another former employee interviewed by Affiant, John Karlson, both informed Affiant that they believe Malouff to be a dangerous person and they are concerned that he will retaliate, based On his past abusive and threatening behavior. Affiant has determined through review of criminal history records that Malouff has a federal felony conviction for Possession of a Weapon/Unlawful Transfer of a Firearm, and therefore is not permitted to possess a firearm under federal law. Malouff-McCoy and her husband Tim McCoy have stated that, when Malouff received his federal conviction for transporting firearms in August of 2006, they agreed to take possession of his extensive firearm collection. Malouff-McCoy provided Affiant with the following list of the firearms and munitions she and McCoy were storing for Malouff:
in wind. "
1. Winchester Model 94 30/30
2. Savage 7mm with bull barrel and Burris scope (Malouff told the witness that said he purchased it from some police department and said it was a sniper rifle)
3. Ruger Mini14 with folding stock 4. 30 Carbine 5. MIA with small hand painted camo stock 6. Browning Hi power 9mm with wood grips 7. Walther 380 8. Smith and Wesson snub .38 9. Seiko 30-06 10. Jennings long rifle .22 pistol (4) 11. Luger 3 or 4 12. Navy colt pistols 2. 13. Cowboy revolvers .44 (2) 14. Mauser "sporterized' with scope 15. multiple boxes of ammunition 16. metal gun cases (2) 17. Mossberg 500 Black shotgun with double pistol grips 18. Mossberg 500 Shotgun completely stock 19. Remington Riot Shotgun(2) 20. holster(10-12) 21. Smith and Wesson .38 revolvers (3) 22. Marlin .22 rifle stainless steel with scope 23. Beretta 9mm custom engraved with gold barrel 24. Gyro Jet gun 25. Merwin & Hewbert Skull Cracker Pistol 26. Italian .22 compact pistols (4) 27 . .32 Saturday night pistol (2). Malouff-McCoy told Affiant that, in May of 2011, she agreed to turn the majority of Malouff's firearm collection over to Malouff's attorney, Mike Guevara. Guevara informed Malouff-McCoy that he was taking the firearms to be stored at the home of Mary Jo Woodall. Affiant consulted again with Malouff-McCoy on September 28, 2011, concerning the whereabouts of Malouff's firearms. Malouff-McCoy stated that as far as she knew, Malouff's firearms are still located at Woodall's residence. She stated that many of the weapons may be stored in a gun safe.
In sum, based on the evidence obtained during this investigation, it is Affiant's belief that on or about and between the dates of February 1, 2009 through November 30, 2010, in Travis County, Texas, Charles Anthony (Charlie) Malouff, Jr., with the intent to defraud or harm a person; to wit: the United States Department of Energy and the Comptroller of Public Accounts of the State of Texas, did then and there by deception cause another, to wit: Representatives of the Texas Comptroller's Office, to sign and execute a document, to wit: a Comptroller of Public Accounts Grant Agreement for Distributed Renewable Energy Technology Program to install multiple wind turbines in Jonestown, Texas, which affected the pecuniary interest of the United States and its taxpayers, and the value of the pecuniary interest was more than $200,000. Per Texas Penal Code Section 32.46(a)(1), (b)(7), Securing Execution of a Document by Deception, where the value of the pecuniary interest involved is $200,000 or more, is a first degree felony.
Further, based on the evidence obtained during this investigation, it is Affiant's belief that on or about and between the dates of September 24, 2010, through August 3, 2011, in Travis County, Texas, Charles Anthony (Charlie) Malouff, Jr., with the intent to defraud or harm a person; to wit: the United States Department of Energy and the Comptroller of Public Accounts of the State of Texas, did then and there by deception cause another, to wit: Representatives of the Texas Comptroller's Office State Energy Conservation Office, to sign and execute a document, to wit: State Energy Conservation Office Accounting Division Internal Purchase Voucher No. 911S0350, which affected the pecuniary interest of the United States and its taxpayers, and the value of the pecuniary interest was more than $200,000. Per Texas Penal Code Section 32.46(a)(1), (b)(7), Securing Execution of a Document by Deception, where the value of the pecuniary interest involved is $200,000 or more, is a first degree felony.
Through this investigation, Affiant has good reason to believe, and does believe, that Charlie MaloufT intends to flee the jurisdiction and travel to Mexico. Therefore, Affiant hereby requests that as a condition of any bond or release this Court order that Malouff surrender his passport and be ordered not leave Travis County.
I can read and write the English language. I have read the above statement, which is based upon my personal knowledge, and it is true and correct to the best of my knowledge and did occur in Travis County, Texas.
Sworn and subscribed to before me by the said affiant on this
[A.lh day of October,
On this the [J'(jh day of October, 2011, I hereby acknowledge I have examined the foregoing Affidavit and have determined that probable cause exists for the issuance of an arrest warrant for the individual accused therein.
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