Friday, October 3, 2008

Ex-CCA chief executive sued by old business partner

An ex-business partner has sued former Corrections Corporation of America Chief Executive Doctor R. Crants Jr., accusing him of conspiring with others to wrest control of a company they created to pursue homeland security contracts.

In the filing this week, Bruce Siddle also accuses Crants of bilking Homeland Security Corp. of more than $41 million through self-dealings and embezzlement.

Crants couldn't be reached through telephone calls Wednesday to Nashville-based Homeland Security. Bill Brewer, a Dallas-based attorney for Crants' son, who is also a defendant, said the lawsuit doesn't have merit.

"It's a work of fiction," Brewer said. "It's got more fantasy than facts. We'll bring some facts to the fantasies and defend this aggressively."

The suit, filed in federal court in Southern Illinois, seeks triple damages plus a return to Siddle of law enforcement training company PPCT Management Systems Inc., which he merged under Crants' Homeland Security in 2002.

Siddle contends that he was promised a 25 percent stake in Homeland but never saw benefits such as dividends, according to the suit. Instead, he said Crants took control and siphoned Homeland's funds — including through dealings with related parties such as entities linked to Crants' son, Doctor R. Crants III.

Other defendants are Linda Cooper and George V. Crawford III, who were Homeland's lawyers, and Lee F. Booth, a Crants associate.

The lawyers were accused of conspiring with Crants to conceal improper conduct and of breaching their fiduciary duties to Homeland. Crawford, who just left law firm Gullett Sanford Robinson & Martin in Nashville for Wyatt, Tarrant & Combs LLP, declined to comment.

Cooper couldn't be reached on Wednesday.

The lawsuit, which also listed as co-plaintiffs Siddle's wife, a trust that they control and both Homeland and PCCT, specifically said Crants took at least $10 million out of Homeland by selling stock he owned to the closely held company at high prices.

Other allegations include fraudulently reporting Homeland's taxable income to the IRS as $7.9 million instead of $8.2 million in December 2002, the difference being money Crants took out of the company but claimed that to be an expense for Homeland, the lawsuit says.

Crants started the security company after he was ousted from the prison operator that he had co-founded.

Pairing up with Siddle, who founded PPCT with his wife in the 1980s, the duo went after contracts, including a deal that involved training 80,000 baggage screeners for the U.S. Transportation Security Administration after the Sept. 11, 2001, terror attacks. It also trained air marshals for Delta Air Lines.

In 2006, Crants sold his 60 percent stake in Homeland to a group of investors, including Siddle. Last year, Siddle left the company to run a maker of firearms, but retained an ownership stake.