A federal grand jury has indicted three former officials from the Upper Cumberland Development District, including former UCDD Board Chairman and DeKalb County Mayor Mike Foster in an alleged conspiracy into the misappropriation of federal funds stemming from Living the Dream, a home for needy seniors
(CLICK PDF LINK BELOW TO VIEW THE INDICTMENT DOCUMENT)
Former UCDD Executive Director Wendy Askins and former Assistant Director Larry Webb of DeKalb County are charged with conspiracy, embezzlement, bank fraud, unlawful monetary transactions and making false statements.
Foster, who formerly served as chair of the UCDD board, was also indicted along with Askins for making false statements to the agency's board of directors.
According to the sixteen count indictment, Askins and Webb and others "from in or about February 2010 through in or about February 2012 conspired and perpetrated a scheme to convert over $670,000 of government funds intended for the Upper Cumberland Development District (UCDD), the Cumberland Regional Development Corporation(CRDC), and Cumberland Area Investment Corporation (CAIC) to the use of Living the Dream, which was owned by Askins and Webb," according to the indictment.
"Once again, we will reiterate that those who seek to profit by defrauding the taxpaying public and misusing government funds will be held accountable," said Acting U.S. Attorney David Rivera in a statement. "The personal gain and lavish lifestyles gained by fraudulent schemes will eventually come to an end. Public corruption remains a top priority of the U.S. Attorney's Office and our partner law enforcement agencies."
The Cumberland Regional Development Corporation was a non-profit Tennessee corporation chartered in August 1996. CRDC operated under the UCDD umbrella and was tasked with, among other things, creating affordable housing in the Upper Cumberland Region. CRDC was governed by a Board of Directors separate from the UCDD Board of Directors and was funded, in part, by federal and state grants, including grants from the United States Department of Housing and Urban Development.
The Cumberland Area Investment Corporation was a non-profit Tennessee corporation chartered in February, 1982. CAIC operated under the UCDD umbrella and was tasked with, among other things, administering a federal grant program involving the offering of loans to small businesses within the Upper Cumberland Region with the goal of expanding and retaining jobs. CAIC was governed by a Board of Directors separate from the UCDD Board of Directors and was funded, in part, by federal grants, including grants from the United States Department of Commerce.
Askins, as UCDD Executive Director, was responsible for the day to day operations and management of UCDD, CRDC, and CAIC. Webb, as UCDD Deputy Director, was responsible for assisting Askins.
Living the Dream consisted of three Tennessee Corporations, Living the Dream/Independent Living for Seniors, Inc (a non-profit), Living the Dream/Retirement Living for Seniors, Inc. (a non-profit), and Living the Dream/Independent Living for Seniors, Inc. (A for-profit), which were incorporated either solely by Webb or by Webb and Askins. In general, the stated purpose of Living the Dream was to provide affordable housing. In this regard, Living the Dream (LTD) was empowered to acquire, rehabilitate, own, operate, maintain, manage, lease, sell, mortgage, and otherwise dispose of such housing facilities, according to the indictment.
The indictment alleges that "Askins and Webb incorporated LTD as either a non-profit or profit entity and caused funds from UCDD and CRDC to be transferred to LTD, without seeking the approval of the UCDD or CRDC Board of Directors."
"Askins and Webb caused LTD to purchase property using funds that were transferred from UCDD's bank account without the prior approval of the UCDD, CRDC, or LTD Board of Directors and sought and obtained bank loans and lines of credit to renovate the property by using property and bank accounts of UCDD as collateral for the loans. The loan proceeds were then transferred to LTD without prior approval of the CRDC Board of Directors," according to the indictment.
"In order to hide, conceal, and cover up the illegal activity, Askins and Webb directed other individuals to alter official minutes of UCDD meetings and to delete audio recordings of meetings. Askins then lied about the alterations and deletions. Askins advised Webb and another that they should "get their stories straight" before a UCDD Board meeting and prepared a false statement which was read to the meeting by Mike Foster," as alleged in the indictment.
"On January 19,2012, during a specially called UCDD Executive Committee Board meeting, Foster read a prepared statement regarding the LTD project and the Board's approval of the transfer of $300,000 from UCDD to CRDC on February 16, 2010. Foster recommended the retroactive approval of the altered February 16, 2010 minutes and the Executive Committee voted to retroactively approve the minutes," according to the indictment.
The indictment against Foster alleges that "On or about January 19, 2012 Askins and Foster aided and abetted by each other, did willfully and knowingly make and cause to be made materially false, fictitious, and fraudulent statements and representations to wit: Askins and Foster stated and represented to the UCDD Executive Committee of the Board of Directors that the UCDD Executive Committee had discussed and intended to approve the transfer of UCDD funds to CRDC for the purpose of the LTD project at the February 16, 2010 UCDD Executive Committee Board meeting. Whereas, in truth and in fact, Askins and Foster then and there knew well and believed, the UCDD Executive Committee had NOT discussed nor intended to approve the transfer of UCDD money to CRDC for the LTD project on February 16, 2010."
Askins and Webb were placed on administrative leave in February 2012, pending an internal investigation.
Two months later, as that internal investigation was being finalized, both Askins and Webb submitted their resignations.
If convicted, Askins faces up to 225 years in federal prison and $6.75 million in fines on all charges. Webb faces 220 years and $6.5 million in fines.
Foster faces five years in prison and a $250,000 fine if convicted on the one count.
Foster has served as DeKalb County Mayor since 2002. Webb is also a former DeKalb County Mayor. He served for ten years, having first been elected in 1990. Webb was re-elected in 1994 and 1998. Webb then resigned during his third term to take a position with the UCDD.Read the rest of this article