Charged with serious crime after “DRAINED” investigation into shady contracts

A major breakthrough in our “DRAINED” investigation into the City of Houston Water Works. Seven people at the center of the water main repair scandal uncovered by KPRC 2 Investigates are charged with bribery, abuse of office and tampering with government documents. A Harris County grand jury returned the indictment Thursday afternoon.

Investigator Amy Davis spent months investigating questionable contracts within the City of Houston’s Department of Public Works. That work sparked a criminal investigation that led to the charges.

Who was charged with questionable city contracts?

• Patrece Lee, former director of water services for the city of Houston

Charges: abuse of office, forgery

• Andrew Thomas, Lee’s brother

Charge: abuse of office

Charges: abuse of office and bribery

The other four defendants were contractors and business owners who were accused of bribery for making payments to Lee in exchange for him putting water line repairs, inspections and payments to the city in their hands.

They are:

• Joseph Nerie, owner of Nerie Construction

Charges: One count of bribery (second degree felony), one count of tampering with a government document (felony punishable by imprisonment)

• Edelmiro Castillo, owner of Omega Engineering, Inc.,

Charges: Bribery (second degree crime), tampering with a government document (crime punishable by prison time)

• Tieasha Coleman Houston, owner of TJ Cole Enterprises, LLC

Charge: Bribery (second degree crime)

• Frank Perkins, Owner of CST Connections, LLC

Charge: Bribery (second degree crime)

(Abuse of office is a crime in which a public official violates the law or misuses government property.)

“Abuse of Office punishes public employees and officials who abuse their position to steal,” said Harris County District Attorney Kim Ogg. “We just want to thank Channel 2 because without your work we would not have called the Rangers.”

Harris County District Attorney Kim Ogg spoke exclusively with investigative reporter Amy Davis about the recent charges. Ogg said KPRC 2 and Investigator Amy Davis are the reason the investigation was launched.

“When your reports came out and brought to light information that raised reasonable suspicions that Patrice Lee and others might be involved in a theft of our city water funds, I contacted the Rangers. Our Public Service Corruption Unit saw the story. We were concerned. We said let’s look at the documents,” Ogg said.

How did it all start?

KPRC 2 Investigates suspended our investigation into these contracts last November.

Here’s a quick recap of what happened: You may remember when water mains broke all over the city. The City Council approved $80 million to quickly fix the lines, using emergency contracts that required no bidding and little oversight.

Investigator Amy Davis discovered that Patrece Lee, a manager at Houston Water Works who was in charge of selecting contractors and awarding contracts, quickly set up a construction and inspection company. She made her brother the owner and then awarded him a $4.5 million contract. Investigator Amy Davis tracked Thomas down at his home.

“What concerns us is that your sister works for the city of Houston. Did she give you the contract? What experience do you have with repairing water pipes and breaks?” Amy asked.

“I can give you all the information. As I said, I’m on the phone right now,” Thomas replied.

“We taxpayers will never know how badly we were cheated,” Ogg said. “The water pipes may have been properly repaired, or they may not have been. What we do know is that taxpayers got much less than they should have, for much more money than they should have paid. And that is classic public corruption.”

The city of Houston fired Lee a few days after we published our story. Then Mayor Turner refused to discuss the outstanding contracts or possible criminal charges, saying only that the city’s Office of the Inspector General was investigating.

“You are very rude!” the mayor said to Davis. “You are very rude. I will speak to your general manager.”

Check this out to see the entire exchange.

And now what? Will taxpayers get their money back?

Amy Davis asks Kim Ogg: “At the end of the day, I think taxpayers want to know if they’re even going to get this money back?”

“Unfortunately, in cases of public corruption, we see that thieves do not spare money. In such cases, it will be difficult for the public to recover the stolen money. However, prison is the punishment for a conviction of a crime, and no one wants to go to prison. In these cases, prison would be an option,” Ogg said.

Houston Mayor John Whitmire and District Attorney Kim Ogg plan to release more details about these charges on Friday afternoon. We’ll keep you updated.

Need a comprehensive refresher on the KPRC 2 “DRAINED” investigation and questionable public works contracts?

November 16, 2023: KPRC 2 uncovers questionable multi-million dollar contracts with Houston water management

November 30, 2023: Houston public sector workers are out of work after a KPRC 2 investigation uncovers millions in fraudulent contracts

November 2023: ‘The problem is nobody cares’: Houston mayoral candidates raise water bill issues

December 5, 2023: “We were actually sitting in our trucks watching YouTube”: City contractor speaks out about questionable water repair contracts

December 18, 2023: Suspended water worker approved $116,000 payment to her brother after City of Houston launched investigation

December 20, 2023: DRAINED: Who investigates questionable city contracts? What is the Office of the Inspector General?

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More information on the multimillion-dollar contracts awarded to questionable companies

KPRC 2’s investigation confirmed that Patrece Lee, a public works project manager in Houston, gave emergency contracts to at least two relatives.

• Lu’s Construction and Inspection was awarded a $4.5 million contract. State business records show the company is owned by Lee’s brother, Andrew Travis Thomas. The company was incorporated on Feb. 23, just six months before the council approved the contract. We also found that Lu’s registered business address is the same address Lee has used for several other businesses in her name. The address goes to the same PO box at a UPS Store in Bellaire.

• KPRC 2 investigators stopped by Thomas’ home to talk to him about the connection and the contract. He confirmed he was Andrew Thomas, the owner of Lu’s Construction.

We also wanted to ask Lee about other questionable contracts she has awarded, such as the $3.6 million contract to Space City Environmental, which is owned by Lee’s former brother and sister-in-law.

• There was no one at the Sugar Land office listed as Space City Environmental’s registered address, and the business number given to us by the property manager was invalid.

• C&J Arsenal Construction had only been in existence for about six weeks when the City Council approved a $3 million contract for emergency water main repairs on Oct. 3. Their Rosenberg address in C&J’s business records leads to a house whose owners were none too pleased to see Davis.

• Frank Perkins Jr., the owner of CST Connections, told Davis that Patrece Lee was his contact for the $3.9 million contract he received. Perkins explained that CST Connections is a staffing company that specializes in placing administrators and data entry staff where they are needed. For the nine-month contract, Perkins said he provided the city of Houston with about 12 to 13 data entry staff to help process work orders.

‘DRAINED’ investigation and your water bills

The “DRAINED” investigation is about much more than just contracts. It began nearly two years ago when investigator Amy Davis and producer Andrea Slaydon began investigating inaccurate and outrageously high water bills for Houston residents.

In 2024, Houston’s new mayor has approved sweeping changes to the water billing system. Customers will now pay an average usage fee until it is confirmed that their water meter sensor has been updated and is working properly. (Read more about what the changes mean for you here.)

The DRAINED investigation has always been about transparency with the city, both regarding customers’ water bills and contracts with the water company.

What happens next? Rest assured that Investigator Amy Davis, Producer Andrea Slaydon and the team will stay tuned until we have all the answers you deserve!