NEW ORLEANS — A convicted tax cheat was indicted Friday, along with his building inspection business, on new federal corruption charges that directly implicate New Orleans Mayor LaToya Cantrell in a conspiracy.
Businessman Randy Farrell was charged in a 25-count indictment, with charges of fraud and conspiracy to commit fraud with Public Official 1, who is clearly identified in the indictment without using Cantrell’s name. Former federal prosecutor Matt Chester said that makes Cantrell an unindicted co-conspirator.
Farrell's defense attorney, Rick Simmons, sent a statement denying that his client of his company, IECI & Associates, did anything wrong and accusing federal prosecutors of improperly using information Farrell provided them when he previously pled guilty to tax fraud.
Cantrell's criminal defense attorney, Eddie Castaing, declined comment.
The indictment alleges Farrell bought Cantrell coveted tickets to the New Orleans Saints’ second-ever home NFC Championship Game in January 2019, a fancy lunch at Ruth's Chris Steakhouse in August 2019 and a new iPhone in December 2019, gifts that totaled more than $9,200. Prosecutors allege the mayor had a city official fired who had been investigating Farrell for alleged wrongdoing.
The indictment alleges massive permitting fraud affecting the safety of electrical work at dozens of properties around town. It alleges Farrell was using licensed electricians to get permits for work actually being performed by unlicensed electricians. The indictment names specific properties where the scheme led to unsafe electrical work being approved by Farrell, on behalf of the city Department of Safety and Permits.
Chester says those safety concerns are the most important part of the indictment, but the headlines will be about the allegations of corruption involving top city officials. Chester said Cantrell is an unindicted co-conspirator, although she is not yet charged with a crime herself.
The indictment also outlines gifts Farrell allegedly bought for Public Official 2, who sources confirm is the mayor's second in command, Chief Administrative Officer Gilbert Montano.
The indictment uses a treasure trove of text messages between Farrell and his business partner Fouad Zeton, another convicted felon and friend of Mayor Cantrell.
It alleges in 2018 and 2019, Farrell bought NFC Championship Game tickets, a lunch at Ruth's Chris and a new iPhone for the mayor, while he was pressing her to fire Jennifer Cecil, the deputy director of Safety and Permits at the time, who was investigating Farrell for falsifying electrical permits.
Each time Cantrell got something of value, Farrell allegedly texted with Zeton about it. Some of the messages are very specific. A few days after Farrell met with Cantrell at Ruth's Chris, Cecil was informed she was fired. The indictment says that's when Farrell sent Zeton an image saying "The B---- IS GONE!!!!!"
And then the indictment says, Zeton texted Cantrell and said, "Thank you so much for handling safety and permit problem."
Addressing the lunch at Ruth's Chris, Farrell's attorney's statement says, "Mr. Farrell provided documentation of his payment for a birthday luncheon for (Fouad Zeton) and his two nephews at which Public Official 1 was an invited guest of the businessman. The prosecution is now improperly utilizing this information against Mr. Farrell, alleging it was a bribe. Mr. Farrell did nothing more than complain to city leaders about the dysfunction of the Department of Safety and Permits, a right that he and all citizens have under the First Amendment."
In addition to Cantrell, the indictment alleges Cantrell's second in command, Montano, asked Zeton to get him tickets for the 2020 College Football National Championship Game in the Superdome, won by LSU.
The indictment says Farrell paid $3,600 for those tickets.
We reached Montano by phone after the indictment was handed up. He said he was blindsided to learn he was implicated in two criminal counts, and didn't even have a criminal defense lawyer. He admitted he ended up in a suite at the National Championship Game, but denied he would ever do someone a favor in exchange for tickets.
"It's discouraging. You know, you spend all these years trying to fix and make something better," Montano. "And to be in the same conversation that I would sell my integrity and my hard work and all my ethics for tickets? Tickets are not worth, any kind of controversy associated with this."
Cecil had been collecting evidence and sending it to the city’s inspector general, alleging Farrell was falsifying permits so his electrical company could do hundreds of jobs in New Orleans that he, as a safety inspector, was banned from doing. She also alleged IECI inspectors had approved those jobs as safe, which is illegal.
On Aug. 22, 2019, six days after Farrell met with Cantrell and three days after Farrell’s allies in the Safety and Permits office asked her again to get rid of Cecil for investigating them, Cecil emailed an agent in the Inspector General’s Office to say she had met with her boss and had been fired.
City records show Cecil was able to take paid leave from Aug. 23 to Nov. 15, 2019, before she was officially terminated. The indictment says she ran out of vacation days and resigned.
Cecil’s direct boss, Chad Dyer, also resigned in September 2019 after refusing to fire Cecil immediately. He is identified in the indictment as Supervisor 1. The indictment alleges Cantrell instructed Dyer to terminate Cecil, but instead Dyer let her take vacation days.
If Cecil’s investigation had led to sanctions against Farrell or his company, it could have cost IECI millions of dollars in New Orleans. Instead, IECI continued to handle private inspections for contractors, checking the safety of their work on the city’s behalf. According to city emails obtained by WWL, the Safety and Permits Department did not revoke Farrell’s third-party inspector’s license until last year. And the indictment alleges Farrell continued with a conspiracy to commit fraud with his inspection business until September 2023.
Farrell complained in an email to the city, claiming his third-party inspections on the city’s behalf, “working hand-in-hand with the city for the last 18 years,” had saved the taxpayers $1 million every year.
In June 2019, Farrell formed a business with Zeton, then the owner of the Magnolia Mansion. Farrell and Zeton owned Zeton’s house in Lakewood North together for several years. Zeton was later convicted in his own fraud scheme involving art he falsely claimed had been stolen from that house.
Federal investigators were able to seize Zeton’s phone during that investigation and got his communications with the mayor and Farrell. The indictment identifies Zeton as Businessman 1. After Cecil was fired, Farrell paid for Zeton to buy Cantrell a new iPhone, prosecutors allege.
Read the full indictment below:
CORRECTION: A previous version of the story incorrectly identified Public Official 2 as Chad Dyer. Sources tell WWL Louisiana that Public Official 2 is Gilbert Montano. The indictment actually refers to Chad Dyer as Supervisor 1, who refused to participate in firing Jennifer Cecil and resigned.
► Get breaking news from your neighborhood delivered directly to you by downloading the new FREE WWL-TV News app now in the IOS App Store or Google Play.