AJC Watchdog: First Alert

Keeping watch on those who hold the public trust and money

Bribery scheme sends Atlanta businessman to federal prison

Stolen money helped to build an $8.5 million Atlanta mansion, but the owner's new residence won't have quite the same amenities.

Atlanta businessman Roy Dixon Jr., who pleaded guilty last year to taking part in a bribe and kickback scheme that helped loot Detroit's public pensions, was sentenced on Wednesday to three and one-half years in federal prison.

Court records show that among other things, Dixon admitted that he paid for a Turks and Caicos Islands vacation for former Detroit treasurer Jeffrey Beasley and family, and a vacation trip to Naples, Florida for pension trustee Paul Stewart and his girlfriend. He also gave gift baskets to Beasley and Stewart; an additional payment to Beasley, and, at Beasley's request, $10,000 to the "Kilpatrick Civic Fund."  Beasley is a former fraternity brother to ex-Detroit Mayor Kwane Kilpatrick, who is serving a federal prison sentence for racketeering and corruption.

Dixon's gifts were a "thank you" for the three public pensions' investing nearly $25 million in his Onyx Capital Advisors. The primary investment it made was in Second Chance Motors, which once had dealerships in Georgia and other states. By 2013, all were shuttered, a check by The Atlanta Journal-Constitution in 2013 found.

Before the sentencing, Dixon's attorney argued that he shouldn't be held accountable for all the losses from the failed investments. Prior to his "entanglements" with the Kilpatrick administration, according to the attorney's court filing, Dixon was a "highly regarded and established businessman." Some of the losses, he said, were due to market forces, bad decisions by companies that obtained the investments - and a complaint filed by the U.S. Securities and Exchange Commission in 2010 against Onyx and Dixon. Resulting publicity caused customers and potential customers to back off of Onyx, Dixon's attorney bemoaned.

The SEC alleged in its case that Dixon and another Atlanta man, former Detroit Lion Michael Farr, worked together to misappropriate money from the Michigan pension funds. About $500,000 of that money was used to pay contractors working on Dixon's mansion.

In that case, Dixon and Onyx Capital Advisors last year were ordered to pay a civil penalty of $3.1 million and an equivalent amount in disgorgement. Farr, who owned Second Chance Motors, was ordered to pay a $1 million civil penalty and $2.3 million in disgorgement.

Farr acknowledged in depositions for the SEC that he wrote the checks to the mansion contractors from funds he received from Onyx because he believed he owed Dixon a favor for investing in Second Chance Motors. Farr testified that when the SEC began investigating, he and Dixon created a backdated promissory note to make the transaction appear to be a loan. Farr was not criminally charged.

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About the Author

Lois Norder is Senior Editor for Investigations in the newsroom at The Atlanta Journal-Constitution.