A federal grand jury returned indictments last week on three former officials from the Upper Cumberland Development District (UCDD).
Former Executive Director Wendy Askins and former Assistant Director Larry Webb, who served as mayor of DeKalb County for 10 years before resigning to take the UCDD position, are charged in a 16-count indictment with six counts of theft and conversion of government property in excess of $1,000; four counts of bank fraud; three counts of money laundering; and one count of concealing a material fact, as well as conspiring to commit various other federal offenses.
Askins and DeKalb County Mayor Mike Foster are charged with a single count of making a false statement regarding a matter within the jurisdiction of the United States.
The charges stem from a federal investigation into the UCDD “Living the Dream” home, a project which was designed to be a haven for needy seniors.
The indictment alleges that Askins, Webb and others “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.”
The Cumberland Regional Development Corporation was formed under the UCDD umbrella to help create affordable housing in the Upper Cumberland area in 1996.
The CRDC was partially funded by  grants from the United States Department of Housing and Urban Development, as well as federal and state grants. It was overseen by a separate board of directors.
The CAIC was chartered under the UCDD umbrella in 1982 to administer a federal grant program involving loans to small businesses in Upper Cumberland. The agency’s stated goal was to help expand and retain jobs in the area.
The agency was also governed by a board of directors separate from the UCDD board. It was partially funded by federal grants as well, including grants from the United States Department of Commerce.
The indictment further 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,” it reads.
The document also accuses that; “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.”
The indictment against Foster alleges that “On or about Jan. 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 Feb. 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 Feb. 16, 2010.”
Askins and Webb were placed on administrative leave pending an internal investigation in February 2012, and both resigned two months later.
Askins and Webb appeared in federal court in Nashville Friday to formally enter pleas to the charges.
Askins, represented by Nashville attorney Peter Strianse, and Webb, with former U.S. Attorney Ed Yarbrough as his counsel, entered not guilty pleas.
Foster apparently appeared without an attorney. It has been reported that he is seeking legal representation before entering a plea.
Yarbrough told reporters that he “would have to say from seeing the indictment that it's going to require a good deal on our part. Certainly Mr. Webb intends to stand by his plea of not guilty and, if necessary, will go to trial to show that he is not guilty of these offenses.”
Strianse said that he believes “The proof is going to show in this case that there is not a penny of any government money that went into Ms. Askins pocket.”
Nashville’s News Channel 5 has reported that Foster said he is shocked by the indictment, and does not believe that he has done anything wrong. The Review was unable to reach him for comment.
No trial date has been set for any of the defendants.
The case was investigated by agents of the U.S. Department of Health and Human Services, Office of the Inspector General, the U.S. Department of Commerce, Office of Inspector General, the IRS-Criminal Investigations and the FBI, with assistance from the U.S. Department of Housing and Urban Development-Office of Inspector General. The United States is represented by Assistant U.S. Attorneys Darryl Stewart and Scarlett Singleton.
If convicted, Askins could get up to 225 years in prison and $6.75 million in fines, as well as forfeiture of property derived from, or used in, the bank fraud and money laundering offenses charged. Webb faces up to 225 years in prison and $6.5 million in fines, as well as forfeiture of property derived from, or used in, the bank fraud and money laundering offenses charged.
Foster is facing up to five years in prison and a $250,000 fine.