Sunday, May 16, 2021

Former CEO of Eastern Shore broadband cooperative accused of embezzling $160,000

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The former CEO of an Eastern Shore broadband nonprofit has been indicted on federal bribery and embezzlement charges, court records show.

Patrick Mitchell, who was fired as CEO of the Salisbury-based Maryland Broadband Cooperative in 2019, is accused of using more than $160,000 in company funds to pay for a boat and personal vacation. He also allegedly routed money from a contract with the Navy to an unidentified Harford County-based subcontractor, who then paid for Mitchell to have work done on his home.

The 13-count indictment was returned by a grand jury Thursday. Mitchell could not be reached for comment and did not have an attorney listed in court records.

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The Maryland Broadband Cooperative said it learned of the federal investigation in December 2018 and has been “cooperating fully.” The nonprofit said it retained outside counsel and subject matter experts to conduct an internal investigation and review of internal policies and procedures. Officials there declined further comment on the accusations.

The company was created in 2006 by legislative intent of the Maryland General Assembly to work with internet service providers to offer service to both underserved and unserved areas across Maryland.

For a fee, public and private entities can join the cooperative and gain access to fiber optic infrastructure. Initially, the cooperative’s primary source of funding came from state and local governments, and it eventually started gaining revenue from its private customers.

Starting in 2008, prosecutors say, the Navy entered into an agreement with Maryland Broadband to build out fiber optic cable from Wallops Island to the Patuxent River Naval Air Station. The project contract grew to $24 million, and the indictment alleges Mitchell caused some of the money to be paid to the Harford subcontractor that were in part kicked back to Mitchell.

In one instance, in October 2016, Maryland Broadband paid the Harford company $467,000. On the same day, the Harford company owner paid the bill for a detached garage at Mitchell’s Cambridge home, prosecutors allege.

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After another payment from Maryland Broadband to the Harford company in November 2016, the Harford company owner paid for cabinets, flooring and an all-terrain vehicle for Mitchell, according to the indictment.

“Package is in the tractor under the floor mat,” the Harford company owner texted Mitchell after dropping off cash in April 2016, prosecutors say. “Thank you for all you do! Not to mention the awesome friendship.”

Mitchell also is accused of using his Maryland Broadband credit card and bank account to pay for $160,000 in personal expenses between 2016 and 2019, including docking fees for his boat, “Reelin’ Fiber,” and for a trip to Costa Rica for himself and another Maryland Broadband employee. That employee is not identified in the indictment.

Mitchell was named Maryland Broadband’s CEO in 2009, and in his final year, he was paid $228,000 in addition to an annual bonus. The indictment says the broadband company’s board of directors terminated Mitchell’s employment in January 2019.

Eastern Shore website SBYNews reported that Mitchell’s homes were raided by the FBI in December 2018.

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