April 20, 2013 

 http://www.radioiowa.com/2013/04/20/alleged-theft-and-money-laundering-scheme-involving-iowa-dot-property/

A former Iowa Department of Transportation employee and a man from Sioux City were arrested today and accused of stealing $407,000 from the DOT in a kick-back and money-laundering scheme.

Fifty-six-year-old David Weigel of Nevada was a “right of way” agent for the DOT, buying and selling property for highway expansions and highway interchanges. Gerard Meyers, the assistant director of the Iowa Division of Criminal Investigation, says a whistleblower contacted another DOT employee in May of 2011.

“Had it not been for that private citizen bringing it forward, we may not have got on to it,” Meyers told Radio Iowa. “And when that citizen did bring it to light and we began our investigation well over a year ago, that’s some indication of how much we have been working to determine how long it’s been going on, to what extent and the number of other parties that we’re still exploring.”

Meyers said more arrests may be made. Weigel, the former DOT employee, and 59-year-old Grady Marx of Sioux City were arrested today. Meyers said witnesses and financial statements indicate money was paid directly to Weigel for several properties in Tama County.

“In one instance, land was sold for $125,000 to a businessman. In this transaction, the buyer was instructed to write one check to the Department of Transportation and another check for $55,000 to David Weigel directly,” he said. “In another Tama County transaction, David Weigel pocketed $26,000 for a $75,000 purchase.”

Another of the alleged kick-backs involved a DOT property sale in Floyd County.

“Investigators revealed that Weigel directed the buyers to send $200,000 of the sale price to his co-conspirator Grady Marx,” Meyers said. “On later date, Marx sent Weigel a check for the amount of $100,000.”

Meyers said it appears Weigel also used his position in the DOT to arrange for the Sioux City man to be paid for mowing “several” Department of Transportation properties.

“Subsequent to the various DOT payments, Grady Marx issued checks back to David Weigel totalling 49.9 percent of Marks’ payments from DOT,” Meyers said.

Weigel was hired by the DOT in 1995 and resigned in July of 2011, shortly after the theft allegation was first made. Pete Hjelmstad, a spokesman for the DOT, said the agency has taken steps to ensure more people sign off on transactions before they’re final.

“Changes when it comes to the disposal of excess land, when it comes leasing state-owned property, when it comes to maintaining excess property,” Hjelmstad told Radio Iowa early this evening. “…We just get a lot more eyes on the process, to make sure that nothing like this can ever happen again.”

According to Hjelmstad, Weigel was placed on administration leave as soon as the whistleblower stepped forward.

“This was unfortunately one individual who misused his authority, which resulted in the investigation and the charges,” Hjelmstad said.

Authorities searched four properties this morning, seizing “a number of vehicles” and other assets. Weigel has been charged with first degree theft, money laundering, ongoing criminal conduct and felonious misconduct in office. Marx has been charged with first degree theft, money laundering and conspiracy to commit a felony.