‘Deplorable’: Ex-Stonecrest mayor gets 57 months in COVID fund fraud case

Jason Lary admitted to fraud scheme involving city’s COVID relief funds

Jason Lary, founding mayor of Stonecrest, will serve nearly five years in prison for pocketing COVID-19 relief money meant for the businesses, churches and people of the city he helped create.

Lary was also ordered to pay nearly $120,000 in restitution.

The former mayor will not report to prison until at least Dec. 15, an allowance made so he can continue treatment for his ongoing battle with prostate cancer and a more recent diagnosis of lymphedema.

“What he did was deplorable. Absolutely deplorable,” United States District Court Judge Thomas W. Thrash Jr. said. “At the time of the greatest medical and economic catastrophe in generations, Mr. Lary, instead of being the honest and respectable mayor that he was elected to be ... used that as an opportunity to steal.”

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Thrash handed down his sentence Wednesday morning. The three-hour hearing in his courtroom on the 21st floor of the federal building in downtown Atlanta marked the culmination of an unsavory saga that’s unspooled for more than a year.

Rumors of financial misdeeds and questionable contracts swirled around Lary — the now-60-year-old, former mayor of the fledgling south DeKalb city — for weeks in the spring of 2021. A state senator called for his removal. An internal investigation commissioned by his City Council colleagues raised even more questions.

By mid-April, Lary announced he was taking medical leave.

And come November, the United States Department of Justice, the FBI and the IRS dropped their collective hammer.

Credit: LUCY LUCKOVICH

Credit: LUCY LUCKOVICH

Lary was charged with wire fraud, conspiracy and federal program theft, accused of orchestrating a detailed scheme to pocket portions of Stonecrest’s $6.2 million in federal CARES Act funds — money meant to help the public weather the pandemic.

The mayor initially denied the allegations but had announced his resignation by Jan. 4 of this year. And a day later, he pleaded guilty to it all: Creating shell companies and using personal connections to funnel to himself more than $924,000 in relief funds meant for small businesses and churches. He told those folks a portion of the funds they received needed to be given to an entity he created, which would help them market their businesses.

He enlisted Lania Boone, the wife of a former city official, to keep the books in exchange for a cut. She will be sentenced next month on a single count of conspiracy.

With the money, Lary paid off his own lake house near Macon and covered outstanding tax debts. He paid for roof and car repairs. He attempted to steal $100,000 directly from the Stonecrest Housing Authority.

All of those actions shot his community — a city he helped birth just a few years prior — into chaos.

Wearing a black suit, leaning on a cane with walking boots on both feet in court Wednesday, Lary apologized to his family, his friends and the residents of Stonecrest.

“I let us down,” he said.

After the hearing, Lary hugged emotional supporters, including his crying wife. He declined to speak to a reporter.

About half a dozen people also spoke on Lary’s behalf Wednesday, including siblings, friends and his pastor (who leads Union Missionary Baptist Church, which despite being in the city of Lithonia received a COVID grant from the city of Stonecrest).

“That’s not the Jason I know,” brother Julius Lary said.

Credit: HYOSUB SHIN / AJC

Credit: HYOSUB SHIN / AJC

Lary and attorney Dwight Thomas had asked Judge Thrash to consider a lenient sentence without prison time, citing his health and his previous service to the community. Thomas wrote in a recent court filing that the former mayor had already been “humbled, humiliated, isolated and treated like a leper.”

Thomas also stressed that much of the ill-gotten money had already been paid back and Lary had cooperated with the investigation. But Thrash pointed out that federal authorities recovered most of the money themselves and Assistant U.S. Attorney Trevor Wilmot characterized Lary as “not forthcoming” in his conversations with investigators.

Wilmot said the residents of Stonecrest had deserved an honest and dependable mayor.

“What they got instead, unfortunately, was a crook,” he said.

Faye Coffield, a Stonecrest resident and longtime Lary critic, said the former mayor’s sentence wasn’t nearly enough.

“I don’t care what he says about cancer. He had cancer when he did that mess,” Coffield said. “We don’t know how many small businesses that could’ve used this money had to go out of business because they didn’t get it.”

Officials said restitution will be made payable to the city of Stonecrest. City officials, who would be tasked with distributing it, declined to comment on the sentence.


OUR REPORTING

The Atlanta Journal-Constitution has reported on possible inconsistencies in Stonecrest Mayor Jason Lary’s guidance of the city’s COVID-19 relief spending since early 2021. The paper was the first to report on the internal investigation that raised concerns about abuse of the funds meant to help residents and businesses in a time of great need, and has continued to doggedly follow the case in the many months since.


A timeline of the Stonecrest CARES spending scandal

July 2020: DeKalb County allocates portions of the COVID-19 CARES Act relief funds it received from the federal government to local cities. Stonecrest receives $6.2 million.

April 1, 2021: State Senate Bill 21, a piece of legislation changing Stonecrest’s city charter and largely stripping Mayor Jason Lary of power, is signed by Gov. Brian Kemp. Stonecrest City Council members had supported the bill, which surfaced amid rumors of murky contracts and other financial issues surrounding Lary.

April 12, 2021: The Stonecrest City Council votes to release the findings of an internal investigation that found the city’s program for CARES Act relief funds was “plagued by mismanagement” and had the “overwhelming” appearance of a kickback scheme. Jason Lary, the city’s founding mayor, is named in parts of the report.

April 15, 2021: In a press conference, Lary denies any wrongdoing but announces he’s taking medical leave to receive cancer treatment.

April 20, 2021: The Stonecrest City Council authorizes City Attorney Winston Denmark to take further steps in the CARES Act investigation, including requesting the involvement of law enforcement.

Nov. 10, 2021: A criminal information filed in the U.S. District Court in Atlanta charges Lary with wire fraud, conspiracy and federal program theft. Lania Boone, a bookkeeper for the shell company allegedly used to embezzle funds and the wife of a former city official, is also charged with a single count of conspiracy. Both plead not guilty.

Jan. 4, 2022: Lary announces his resignation as Stonecrest’s mayor.

Jan 5, 2022: Lary changes course and enters a guilty plea, agreeing to cooperates with federal investigators in exchange for the possibility of a lighter sentence. His sentencing is originally scheduled for May but later postponed to July.

Feb. 11, 2022: Lania Boone enters her own guilty plea. She is scheduled to be sentenced in August.

July 13, 2022: Lary is sentenced to 57 months in prison. He will report no sooner than Dec. 15 due to ongoing medical treatment.