Federal prosecutors presented evidence this week that they claim shows Anthony Hutchison systematically overbilled Houston ISD by $6 million for not mowing school properties as often as he billed the district for.
Earlier this week, Assistant U.S. Attorneys Robert Searls Johnson and Heather Rae Winter called five owners of companies that mowed HISD properties on behalf of Southwest Wholesale LLC, one of Hutchison’s businesses, to the stand.
Each witness testified that they fulfilled their contractual obligation to mow the grass twice a month from March to September, with three cuts required in August. They were only required to mow once a month for the remaining months, totaling 20 cuts per year.
The witnesses also testified that they had never mowed their assigned properties four times a month and that instances of mowing a property three times in a month were infrequent. These additional cuts, known as “special cuts,” typically occurred when an HISD principal requested one in advance of a school event.
However, prosecutors allege that Southwest Wholesale routinely billed HISD for four cuts per month. To support his claim, Johnson presented years of invoices submitted by the company, along with mowing calendars and spreadsheets. He contended that the documents detailed which subcontractors and Southwest Wholesale employees were responsible for specific schools and when they performed the work.
(For the properties that Southwest Wholesale allegedly failed to maintain, Brian Busby, while serving as the district’s chief operating officer, is accused of pressuring HISD managers to authorize and approve overtime pay for district crews to handle the work themselves.)
The spreadsheets featured columns labeled “First Cuts,” “Second Cuts,” “Special Cuts,” “Third Cuts,” and “Fourth Cuts.” While the first two columns consistently contained completion dates, the others were almost never filled out. However, Tracey-Alexander-Watson, a former administrative assistant at Southwest Wholesale, testified that not all “special cuts” were recorded in the spreadsheets Johnson presented
Despite being called to the stand by Johnson, she claimed that field supervisors used a different form to track when HISD officials requested “special cuts” for schools. (Field supervisors were responsible for verifying that subcontractors had completed their work as required.)
In response, Rusty Hardin, one of Hutchison’s attorneys in the ongoing bribery trial, questioned whether federal authorities had found and seized those forms during their search of Hutchison’s office and home five years ago, saying that he and the government were arguing about apples and oranges.
Alexander-Watson, who spent all of Wednesday on the stand, also testified that Southwest Wholesale frequently handled emergency or special projects at the request of HISD officials, including Alfred Hoskins, a former general manager of HISD’s facilities, maintenance, and operations department. Hoskins, who pleaded guilty to conspiracy to commit bribery in October 2021, testified last week that he accepted money from Hutchison after receiving instructions from Busby to direct his subordinates to give Hutchison’s other company, Just Construction, a favorable evaluation for a minor maintenance project contract.
Because these emergency projects or mows were almost always last-minute, purchase orders were filled out retroactively, Alexander-Watson said. The absence of an immediate purchase order meant that Southwest Wholesale was not always paid in a timely manner, Alexander-Watson added.
Hardin did not present any purchase orders that HISD may have ultimately provided, nor did he clarify how much the district paid Southwest Wholesale for emergency work. He simultaneously contended that Southwest Wholesale failed to document all “special cuts” because many were given as “freebies” to help Hutchison maintain his good standing with HISD officials.
Regardless of when and how the “special cuts” were documented, Alexander-Watson testified that she brought the issue to Hutchison upon noticing a discrepancy between mowing schedules submitted by the contractors — where they claimed to mow twice a month — and the invoices, which showed HISD was being charged for four cuts per month.
“Yeah, Ms. Smarty Pants … (I need the schedules in because) I need the other people to do my cuts,” she recalled Hutchison saying. Under questioning by Johnson, Alexander-Watson testified that Hutchison never clarified who the “other people” were. She also said she didn’t ask, assuming that Hutchison had everything under control. (Alexander-Watson later testified that she didn’t believe Hutchison had deliberately tried to overbill HISD.)
According to an email exchange presented by Johnson, sometime in 2019, another administrative assistant at Southwest Wholesale mistakenly billed HISD for two cuts instead of four. The prosecutor cited the email as proof that the company was charging more than the subcontractors reported they had mowed.
Pictures of grass
Former subcontractors for Southwest Wholesale, called to the stand, stood by their work, testifying that, based on the speed at which their grass grew and their typical mowing patterns, they would have noticed if someone else had mowed their properties.
On Monday, Hardin’s co-counsel, Letitia Quinones-Hollins, asked one of the subcontractors, Samuel Arrez, to step down from the witness stand and demonstrate how high the grass typically grew in the 15 days between his scheduled mowing dates.
Arrez held his hand near his knee, indicating that the grass sometimes grew 11 to 12 inches between the first and second cuts of the month. When Quinones-Hollins tried to replicate the height, Arrez corrected her with a laugh, saying, “No, you raised your hand,” prompting laughter from the jury.
Arrez also drew laughter from the jury and U.S. District Judge Andrew Hanen when Quinones-Hollins presented post-mowing photos he had submitted to his field supervisor. She contended that the photos showed minimal grass remaining and argued that his claims about how much it grew couldn’t be true.
“That’s why you take the pictures when the grass is looking nice,” Arrez joked, drawing more laughter from the courtroom. “You’ve got to know what you’re doing to disappear the grass and make it look clear,” he added.
Quinones-Hollins responded incredulously, “Your lawnmower is able to make acres of grass disappear?” Arrez explained that he and his crew used a leaf blower to clear excess grass from the school entrances and exits while leaving cut grass behind in the fields.
Quinones-Hollins then showed Arrez other photos he had submitted. “There’s not a whole lot of grass there, is there? Yes or no, sir?” Arrez replied, “No, but I explained that —” before being cut off by Quinones-Hollins.
Monday also included testimony from Ulysses Tejada, who began mowing for Hutchison during his summer breaks from high school and was later hired as a field supervisor for Southwest Wholesale in 2015. Tejada eventually started his own landscaping company and became a subcontractor for Hutchison.
Like the other subcontractors, Tejada testified that he was always paid by check, never in cash. However, he said that on several occasions, he would cash the checks Hutchison made out to him and then give Hutchison a portion of the cash in return.
When presented with photos of him getting inside Hutchison’s black Range Rover, Tejada explained that authorities had captured one of these instances, where he had handed over part of the cashed check to Hutchison.
Johnson said that Hutchison had reported the payments he made to Tejada to the Internal Revenue Service using a 1099 form. However, Tejada testified that he paid taxes on the full amount of the checks Hutchison issued, not just the portion he received after cashing the checks.
“Are you paying taxes on it?” Johnson asked.
“I’m paying it now,” Tejada replied.
Under questioning by Hardin, Tejada acknowledged borrowing approximately $20,000 from Hutchison when he started his own company to purchase equipment for his 10 employees.
Tejada also acknowledged that he typically paid his employees at the end of each week and estimated he had borrowed money from Hutchison on four different occasions to cover those payments and twice more when he submitted invoices late. (Although Hardin didn’t explicitly make this connection for the jury, the unspoken argument was that Tejada might have been reimbursing Hutchison for the loans he received.)
In addition to overbilling for mowing services, Hutchison is also accused of overcharging for mulch supplied to HISD. In 2018, Southwest Wholesale contacted Bailey Bark Materials in Nacogdoches to arrange the delivery of Kiddie Cushion Mulch to 50 HISD schools, according to documents presented by Winter, the federal prosecutor.
At that time, Bailey Bark Materials was one of only two businesses in Texas certified to sell the specialized mulch commonly used in playgrounds, according to Kortni Bailey, whose father co-owns the company with his three brothers.
Bailey testified on Thursday that while it was unusual for a third-party vendor like Southwest Wholesale to approach the company for large-scale orders for a school district, they agreed to supply the mulch because Southwest Wholesale was ordering enough to fill three 18-wheeler trucks for each school. Bailey also noted that the company reduced the price of the mulch from $12.25 to $11 per cubic yard after Hutchison requested a discount.
However, Southwest Wholesale later removed many schools from its list of recipients and reduced the mulch amounts for nearly all of the remaining schools, according to the documents presented by Winter. What had been planned as three truckloads for most schools was reduced to just one. Despite these changes, Bailey Bark maintained the discounted $11 per cubic yard price, the documents showed.
In addition, Winter presented invoices that she argued showed Southwest Wholesale subsequently billed HISD for the original amount of mulch it had intended to order, charging the district $25 per cubic yard — more than double the price it had paid Bailey Bark. The company also allegedly added an 18-cent fuel charge to the invoices.
Hardin, Quinones-Hollins, and Dick DeGuerin, Busby’s attorney, did not have the opportunity to cross-examine Bailey on Wednesday but are expected to do so on Thursday. Including Bailey, Johnson and Winter have called 18 witnesses in eight days and are expected to call at least five others, if not more, before resting their case and handing the reins over to the defense.
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