Grace’s case sent back to U.S. District Court for resentencing

Judges uphold former St. Gabriel mayor’s conviction in FBI sting

Former St. Gabriel Mayor George L. Grace Sr. could see his 22-year sentence in federal prison reduced following a decision this week from the 5th U.S. Circuit Court of Appeals, which ordered Grace’s case return to U.S. District Court in Baton Rouge for resentencing.

The three-judge panel in its opinion, filed Wednesday, is asking the district court to recalculate approximately $6 million in projected monetary losses to the federal government and private investors it used in imposing Grace’s sentence.

However, the appeals court upheld Grace’s March 2012 conviction on seven counts that included racketeering, bribery, mail fraud and wire fraud. Grace had asked the appellate court to overturn five of the seven convictions.

Grace was one of several area municipal officials who were convicted as a result of an FBI sting known as Operation Blighted Officials. The sting featured a fantasy company, Cifer 5000, that was promoted as a garbage-can cleaning service seeking municipal contracts in Louisiana.

During his trial, the former mayor was portrayed by prosecutors and government witnesses as a public official who demanded bribes and kickbacks from people who sought his help to establish businesses in St. Gabriel.

In his appeal to the appellate court, Grace claimed the district court erred in sentencing him because the judge based his sentence on calculated losses of $3 million each for two fraudulent letters Grace sent to the Environmental Protection Agency and private investors to defraud them for money and grant funding for Cifer 5000.

In its opinion, the appellate court wrote, “For the EPA letter, the intended loss calculation of $3 million is based on a statement by an FBI agent to Grace that he was ‘gonna get … $3 to $4 million per city’ in grants as a result of the letter. The letter was not a grant application and did not specify a requested grant amount.”

The projected loss for the letter to private investors also was calculated at $3 million based on an agent’s statement to Grace that the letter would be used to raise between $2 million to $3 million, the opinion states.

The appellate court cited its previous decision to remand a case for resentencing in an appeal from former New Roads Mayor Tommy Nelson, currently serving an 11-year sentence in prison as a result of the Operation Blighted Officials investigation. In that case, the 5th Circuit said the appropriate valuation for letters Nelson sent to the EPA and private investors “may be the amount Nelson received for writing” them.

Grace had undercover agents pay him $1,000 to write the EPA letter and $8,000 to provide the letter to private investors.

Others convicted in Operation Blighted Officials include former White Castle Mayor Maurice Brown, serving 10 years; and former Port Allen Mayor Derek Lewis, serving a 40-month prison term.