The FBI accused Mayor Jason Lary of stealing more than $650K in federal COVID-19 relief funds by using a kickback scheme
Hours after being arraigned on three federal charges, Stonecrest Mayor Jason Lary broke his silence, but not to address his alleged crimes.
Instead, Lary harshly criticized city staff and councilmembers during a Stonecrest Housing Authority (SHA) meeting on Wednesday afternoon. Lary, who the FBI said stole more than $650,000 in federal pandemic relief funds to pay off personal tax liabilities and a lakehouse mortgage, called city staff members incompetent and lazy.
The five-minute rant was prompted by the housing authority’s attorney questioning whether Lary would still be around as mayor in 2022 to reappoint the authority’s current members.
“I’m the mayor of the City of Stonecrest and will be until the people say I’m not or until some other entity says that I’m not,” Lary said during the meeting.“ I still get to confirm (members to the housing authority’s board). I still get to pick… until my powers have been removed, which they have not.”
Lary is among two people charged in an alleged kickback scheme to steal coronavirus relief funds from small business and nonprofit recipients.
Lary, 59, was charged with wire fraud; conspiracy to commit federal program theft; and federal program theft. Lania Boone, 60, a bookkeeper for the company hired by Stonecrest to distribute the federal funds, faces a conspiracy charge. She’s the wife of Clarence Boone, the city’s former economic development director who was among several city employees to be fired in the fallout of the alleged scheme.
In court Wednesday morning, Lary pleaded not guilty but waived his right for the case to go before a grand jury. Instead, the case will proceed using a “criminal information” as the charging document, which typically means a plea deal is coming. Dwight Thomas, Lary’s attorney, said as much in court.
“He accepts full responsibility,” Thomas said, " and there won’t be a jury trial.”
However, Lary’s tone was different on the 4 p.m. virtual meeting of the SHA. He went after city staff and councilmembers who he claims are withholding funds from the housing authority and missing rent payments.
“You can’t just be that inept, irresponsible about covering someone else’s bills, especially since the money is legally the housing authority’s anyway,” Lary said. “So yes, the mean Jason Lary said that they’re not doing their job. And they’re not. So with that, there has to be some resolution and restitution to this instead of them dragging their rear ends on making things the right way. And that’s why I’m in trouble today, because I can’t hold it in.”
Lary encouraged the housing authority members to opt into an intergovernmental agreement (IGA) with the DeKalb County Housing Authority rather than the City of Stonecrest. In September 2020, the council approved an IGA with the SHA, but due to a paperwork filing error, it never went into effect.
He claimed the other city leaders have “no interest in helping this housing authority.”
In a statement to The Atlanta Journal-Constitution, the city said it is still making payments on behalf of the housing authority. The statement added that the City Council “is aware of the comments (Lary) made and (the council) will address the topic at the appropriate time.”
Lary has not responded to the AJC’s requests for comment since his arraignment Wednesday. Thomas declined to comment about Lary’s statements during the housing authority meeting.
The city obtained the SHA’s funds after Lary attempted to write checks worth nearly $235,000 without anyone else’s knowledge. Lary, who was on medical leave at the time, obtained cashier’s checks worth $234,900 on May 13 from the authority’s bank account and returned them the next day.
The incident raised alarm bells for city staff and SHA members. The authority, which typically works with developers to finance affordable housing projects through bond deals, has since implemented several financial checks, audits and procedural overhauls, matching recent initiatives by the city.
Bill Bruckner, the authority’s chairman, told the AJC that he was disappointed by the mayor’s tone during Wednesday’s meeting.
“I can’t help but think our problems are due to the mayor’s involvement with the SHA,” Bruckner said in an email. “... Naturally there are a number of commissioners on the authority, including myself, who had supported the Mayor in the past. Since the CARES Act (COVID-19 relief fund) investigation, however, everything the mayor has touched and everyone he has been associated with is being treated with suspicion. His withdrawing and then re-depositing all the SHA’s funds did not help matters.”
Acting City Manager Janice Allen Jackson previously said the authority’s bank account, which was set up as a city account, should have been created separately from the city.
On Wednesday, the housing authority members said their funds remain under city control, but they plan to meet with the City Council to figure out how to reacquire the funds. Bruckner said he’s working to set up a meeting with the City Council to work it out.
He added that the SHA “has been very clear about its desire to have a close and mutually beneficial relationship with the city.”
Zachary Hansen, a Georgia native, covers economic development and commercial real estate for the AJC. He's been with the newspaper since 2018 and enjoys diving into complex stories that affect people's lives.