Former DeKalb County Executive Larry Webb entered a guilty plea to one count of federal bank fraud and became a witness for the prosecution against Wendy Askins in connection with the "Living the Dream" scandal.
Webb, also the former deputy director at the Upper Cumberland Development District in Cookeville (UCDD), agreed to testify against former UCDD executive director Wendy Askins as part of a plea deal, avoiding any jail time.
Webb was potentially facing 220 years in federal prison and $6.75 million in fines on a 16-count federal indictment for conspiracy, theft of government money, bank fraud, money laundering, and making a false statement. The plea deal calls for three years of supervised release with no fines.
After entering a guilty plea to Count Eight of the indictment, court documents say that: "after sentence has been imposed on the count to which defendant pleads guilty as agreed herein, the government will move to dismiss the remaining counts and forfeiture allegations of the indictment."
Count Eight of the indictment accused Webb and Askins of securing a $250,000 loan from the Bank of Putnam County for their own use and benefit and falsely representing that it was for a UCDD board of directors-approved project.
Webb was accused, along with his former boss, Askins, of pouring several hundred thousand dollars in UCDD funds into a million-dollar luxury home in rural Putnam County for needy seniors called "Living the Dream." Askins and her daughter allegedly moved into the house and made it their residence.
Webb's attorney said his client never profited from the scheme, but once he realized all that had been done, some of it without of his knowledge and some of it admittedly with his knowledge, he felt it was best to go with the deal that the government was offering.
Court documents state that Webb admits the following facts and that those facts establish his guilt beyond a reasonable doubt:
"At all times relevant to this case, defendant Larry Webb was the Deputy Director of the Upper Cumberland Development District (UCDD), and the Director of the Cumberland Regional Development Corporation (CRDC). UCDD is a quasi-governmental agency responsible for promoting economic development in the Upper Cumberland area. UCDD is governed by a Board of Directors made up of County Executives and Municipal Mayors from within the 14-county Upper Cumberland area of Tennessee. The UCDD office is located in Cookeville.
"Likewise, CRDC is an organization which operates under the UCDD umbrella, and is governed by a Board of Directors comprised of county executives and municipal mayors from within the 14-county Upper Cumberland area of Tennessee. The CRDC Board of Directors has membership separate from the UCDD Board of Directors. In some instances, however, individuals may be members of both the UCDD and CRDC boards. One purpose of the CRDC is to create affordable housing within the Upper Cumberland region.
"On February 23, 2010, Defendant Webb incorporated "Living the Dream/Independent Living for Seniors, Inc." (Living the Dream). While "Living the Dream" had the appearance of being a project approved by CRDC, it was in fact owned and operated by defendant Webb and codefendant Wendy Askins. A portion of the property was intended to be used as an independent living facility, while another portion was used as a luxury home for codefendant Askins.
"In order to partially fund the purchase of the "Living the Dream" facility, defendant Webb and codefendant Askins obtained a loan from the Bank of Putnam County. To obtain this loan, Webb made false statements to loan officers relating to the true nature of "Living the Dream". Specifically, defendant Webb told the loan officers that "Living the Dream" was an approved UCDD/CRDC project. Additionally, Webb presented false documents, including CRDC resolutions dated May 7, 2010 purportedly authorizing a loan application for "Living the Dream" in the amount of $750,000. As defendant very well knew, the CRDC had not approved the "Living the Dream" project, and had not authorized a $750,000 loan application.
"In reliance upon these false statements and representations, the Bank of Putnam County on May 27, 2010 approved a loan in the amount of $250,000 for "Living the Dream". Defendant Webb and codefendant Askins applied the loan proceeds to the purchase of "Living the Dream". The bank would not have approved the loan or disbursed funds had it known UCDD and/or CRDC did not approve of the project or the loan application.
"The bank eventually foreclosed on the property and subsequently recovered all of its loan proceeds.
"At all times relevant to Count Eight of the indictment, the Bank of Putnam County was insured by the Federal Depository Insurance Corporation (FDIC)."
Askins case is scheduled to go to trial next month.