Three people indicted as part of a Lilburn scheme that defrauded local government appear to have netted more than $640,000 through land deals, much of it at the city’s expense.
Lilburn’s former assistant city manager, Doug Stacks, the former head of the city’s Downtown Development Authority, Norman Nash, and a broker the pair worked with, David Clenton Kennedy, were charged last month with 16 counts of bribery among them.
The indictment lays out nine bribes between November 2014 and December 2018 that total more than $228,000. But contracts and other documents recently obtained by The Atlanta Journal-Constitution show the figures to be much higher.
Not all the incidents described in the indictment have dollar figures attached. And The Atlanta Journal-Constitution could only ascertain specific dollar amounts for four of the projects in question. But in each, the figures dwarf what was previously known.
“There was more to this than meets the eye,” Lilburn city manager Bill Johnsa said of the scheme.
Among the four projects, the men profited in two different ways: in one set, they purchased property the city or the Downtown Development Authority planned to buy, selling it to the government the same day for a profit. In the other, they installed Kennedy as the broker on a project, sometimes ensuring he received his full fee before it would have normally been due.
Kennedy Land Investment Co. collected at least $225,250 in commissions by acting as the broker for the Lilburn Township and Noble Village projects, according to contracts. Johnsa said questions about the Lilburn Township project had initially raised his concerns, causing him to go to authorities about the potential crimes in 2018.
“The commission was paid 100% to them, and it was not closed entirely,” Johnsa said. “We still haven’t had the second closing. He was made whole entirely; that’s what made me so upset.”
Johnsa said it was unusual for a broker to receive the entire commission before closing is complete.
Kennedy acted as the broker for the buyer, Ber-Bank and Lilburn Township Partners. Representatives from both did not respond to messages left Thursday about how Kennedy was selected as the broker.
In the Noble Village deal, Kennedy was the development authority’s broker. In both cases, the developers paid Kennedy’s fees.
Johnsa said the fact that Kennedy was involved on two sides of different development authority deals “raises an eyebrow to me.”
Members of the development board couldn’t explain why he was involved at all.
“There was no relationship ever between the DDA and Kennedy that was known by the DDA,” said Elmer Nash, the current board chair, referring to the Downtown Development Authority. Elmer Nash’s wife is the sister of Norman Nash’s mother.
He added that he was aware of a longstanding relationship between Kennedy and Norman Nash.
‘We did overpay’
Elmer Nash said the board had no need to know the identity of the broker tasked with helping the group buy and sell property in the city. It only became relevant, he said, when it became clear that there was an issue.
Hugh Wilkerson, another member of the development authority, said the group had never voted on a broker, and that Kennedy had been selected by Norman Nash and Stacks.
“We assumed it was being done right,” Wilkerson said. “At the time, everybody was trusting each other, but it didn’t work out so well.”
The developer of Noble Village is Mark Gary. Gary, who was jailed for bribing a Gwinnett County commissioner more than a decade ago, said he didn’t know Kennedy, had nothing to do with negotiating the commission, and had only dealt with Stacks on a professional basis.
“We’re innocent bystanders in this,” Gary said. “It’s a terrible situation for Lilburn. We don’t have anything to do with it.”
In addition to collecting commissions, the group in two instances purchased land Lilburn was eyeing, only to sell it to the city at a profit. Between the two, Lilburn and the development authority spent $385,000 more to purchase land than it sold for earlier that day.
“We did overpay,” Johnsa said.
Bedrock Investments, formed by Norman Nash in March 2015, paid $815,000 on Sept. 8, 2015 for land that became the city’s new police headquarters, according to property records. The same day, Bedrock Investments sold it to the city for $1 million.
On April 12, 2016 a group called Cross Road Investment Services — formed by Kennedy March 23 of that year — paid $180,000 for land at 147 and 157 Main St. The same day, property records show, Cross Road sold it to the Lilburn DDA for $380,000.
“Looking back on it, it’s obvious the prices we were paying were not market prices,” Wilkerson said. “Looking back on it, I should have asked more questions. We all should have.”
Johnsa said he is asking for restitution because of the additional cost to taxpayers.
Matt Crosby, an attorney for Stacks, said he couldn’t comment on the case. Attorneys for Kennedy and Norman Nash couldn’t be reached for comment.
Johnsa said he still doesn’t know how the trio profited off other projects, and records didn’t make it clear. He said he believes a charge related to an Indian Trail distribution center was tied to a $30,000 so-called finder’s fee. The indictment says Kennedy paid Stacks and Nash more than $5,000 for that project.
It lists nearly $90,000 in bribes that aren’t specifically tied to those four projects.
Nine projects were allegedly subject to bribes according to the indictment.
Nov. 14, 2014 — 190 Parkview Trace and Arcado Road. Norman Nash allegedly paid Doug Stacks $8,833.33
Sept. 25, 2015 — 9.7 acres 4572 Lawrenceville Hwy. This is the city’s new police station. The indictment says Stacks received $56,538.33 and Nash paid more than $40,000. City Manager Bill Johnsa said the two of them, plus David Kennedy, bought the land for $815,000 using a shell company before selling it to the city for $1 million.
April 13, 2016 — 147 and 157 Main St. Kennedy allegedly paid Stacks and Nash each $8,372.44. Johnsa said the group also bought this land through a shell company before selling it to the city.
July 8, 2016 — 4.76 acres known as the Enclave Townhomes. Nash and Kennedy allegedly paid Stacks $31,051.13
July 28, 2017 — 5.2 acres at Luxomni Point. Details of the transactions were not available.
July - December 2017 — Noble Village. Kennedy allegedly paid both Stacks and Nash more than $65,000.
June 19, 2018 — Indian Trail Distribution Center. Kennedy allegedly paid Stacks and Nash more than $5,000. Additional details were not available.
Dec. 5, 2018 — 3 acres known as The Preserve at Killian Hill. Details of the transactions were not available.
How we got the story
After the former city manager of Lilburn, the former head of the city’s Downtown Development Authority and a broker were indicted on bribery charges, AJC reporter Arielle Kass requested contracts and other documents related to nine projects that were listed in the indictment. She also looked up property records and business registration information to learn more about the timeline of events. Her reporting showed hundreds of thousands of dollars more are at stake than what was included in the indictment.
