By Billy Davis

Panola County government paid $50,124 in 2007 and 2008 to Absolute Recovery, a company that collected unpaid garbage fees for Panola County Solid Waste.

David Chandler, the former county administrator, oversaw the operation of Solid Waste through his position in county government.  

He also owned Absolute Recovery.

Chandler’s creation of Absolute Recovery and his attempts to cover his tracks were described Wednesday in U.S. District Court in Aberdeen, where Chandler admitted under oath he stole money from taxpayers through the fee collection business and other means.

Chandler, 56, pleaded guilty Wednesday to two counts, mail fraud and embezzlement, in a plea deal with the U.S. Attorney’s Office in Oxford.

The court proceeding in Aberdeen meant Chandler waived indictment and avoided a jury trial, and instead pleaded guilty to a direct criminal charge made by federal prosecutors.

The count of mail fraud came from a county check for $1,105.62 mailed to Absolute Recovery in November 2007. The embezzlement charge came from falsifying overtime pay.    

The two counts total a maximum 30 years in prison and $500,000 in fines, though Chandler’s cooperation with federal prosecutors is expected to help him when he’s sentenced sometime next year.

The Panolian has reported that Chandler is cooperating with federal authorities in a kickback and bribery case involving former leadership at Tri-Lakes Medical Center and a Batesville businessman.

Chandler has provided “substantial assistance” to the government in its investigations, Prosecutor Charles Spillers told the court Wednesday according to The Northeast Miss. Daily Journal, which had a reporter at the court proceedings.

“He understands and agrees to knowingly cooperate with the government,” Chandler’s attorney, Hiram Eastland Jr. of Greenwood, told the court.

The federal criminal trial, where Chandler is expected to testify, is set for February 21, 2012 in Oxford.

 When Spillers described the creation of Absolute Recovery, he told the court the U.S. government could also prove Chandler billed the county $25,920 in faked overtime hours, and that he oversaw unnecessary construction projects around the county, pocketing $33,564 from that scheme.

Until Chandler’s court proceeding Wednesday, it was unknown to the public what federal investigators had uncovered and if Chandler would plead guilty to charges related to Tri-Lakes.

Not everybody was caught by surprise by Wednesday’s court proceeding, however.  

Panola County Administrator Kelley Magee, who replaced Chandler in 2008, acknowledged this week that she looked into Absolute Recovery after she received a tip, just weeks after she was hired.

Magee had remained quiet about her role until Prosecutor Spillers credited her work Wednesday, telling Judge Aycock that the new administrator had uncovered Chandler’s cover-up.  

Asked by The Panolian about her role, Magee cited the tip she received. She also credited Chancery Clerk Jim Pitcock for helping her track down Absolute and tying it to Chandler.  

When Magee told Pitcock about the tip, she used a county check written to Absolute Recovery to locate the Greenwood bank where Chandler was depositing the checks.

“Jim was told by the bank that the account was in the name of Michael D. Chandler,” Magee recalled.  

This week Pitcock confirmed that he tracked down Chandler’s ownership of Absolute, and later talked to federal investigators about the matter, but he had no other comment about the incident.  

Asked about the other allegations made public Wednesday, Magee said she discovered that Chandler had faked his overtime. She said she was unaware of the construction scheme until she was contacted by the U.S. Attorney’s Office.

“I guess David confessed to that one on his own,” she said.  

 Magee said she took notes at the time that showed a second collection company, Quick Collect, had been terminated by late supervisor Robert Avant at the suggestion of Chandler.

The collection fee company created by Chandler began the same service a short time later.

 There is no county board order on record showing supervisors approved hiring Absolute Recovery, Pitcock said.

Prosecutor Spillers told the court Chandler took steps to avoid detection — depositing the checks to avoid signing them and using a tax ID in the name of a third party. He also arranged for the county payments without a contract to avoid identifying Absolute’s owner.

The Panolian reported in February 2005 that Quick Collect Recovery, of Eupora, was hired by the Board of Supervisors to recover about $120,000 from about 600 delinquent customers. The company tacked on a 25 percent fee to each delinquent account.

The Panolian reported Tuesday that Chandler was paid $96,756 when he retired in 2007 and began working on a contract basis for $7,500 monthly.

Magee said this week that the year Chandler retired, Panola County government was also paying him $27,252 yearly to oversee the self-help housing program.

He was also being paid $5,600 yearly to oversee an annual federal grant that provides seasonal law enforcement at Sardis Lake, Magee said, citing county records.

The pending federal trial in Oxford alleges that Chandler pocketed $268,000 from 2005 to 2007 for acting as middleman in a kickback scheme that involved businessman Lee Garner and Ray Shoemaker, the former CEO at Tri-Lakes.

Federal court documents also allege Chandler received a $25,000 bribe for transferring $400,000 in county funds to Physicians and Surgeons, the then-owner of Tri-Lakes at the time.