Now, Stonecrest’s entire $6.2 million COVID-19 relief program is in question after an internal investigation led by Denmark found strong evidence of widespread malfeasance and potential kickbacks.
Lary, a central figure in the accusations, denied any wrongdoing and has refused to resign. The mayor recently began a medical leave due to recurring cancer.
“I wasn’t involved in the decision of the COVID funds administration or who received what awards,” Lary said in a text message to The Atlanta Journal-Constitution on Friday.
The investigative report, written by Denmark, details an alleged scheme where city employees used Stonecrest’s allotment of federal CARES Act funds to enrich themselves and business associates.
In addition, the investigation found businesses and charities were required to pay 25% of their award to one of three pre-selected marketing companies — all created by city officials or people with “deep ties to city staff.”
A supplemental investigative report, made public this week, details what Denmark was able to learn since his initial bombshell investigation went public earlier in April. The unsolicited grant awarded to Union Missionary Baptist Church was among the supplemental report’s findings.
The mayor’s church
Alma Perdue-Byrd, treasurer and administrator at Union Missionary Baptist Church, told Denmark that Lary announced the $150,000 grant award at a trustee board meeting. She added that the church “never actually applied” to receive financial assistance from the city, according to the report.
At the board meeting, Lary allegedly told the trustees that a third of the grant, $50,000, should go to Real Estate Management Consultants, Inc. for “community home repairs.” Perdue-Byrd said those services were never performed. The AJC reached out to the church and did not hear back before publication.
Real Estate Management Consultants, founded in October by private attorney Robert Burroughs, is one of three companies accused of receiving kickbacks as part of Stonecrest’s CARES Act program. Burroughs previously declined to comment about the allegations.
The other two companies named as part of the alleged scheme, Visit Us, Inc., and Battleground Media LLC, are both listed in Burroughs name. The address for Battleground Media, like that of Real Estate Management Consultants, is property owned by Lary’s real estate company.
Perdue-Byrd is also connected to Visit Us, listed as the company’s CEO and chief financial officer in Secretary of State documents. Visit Us received at least $100,000 from various grant recipients to perform marketing services — allegedly at the request of Lary and other city leaders.
Denmark found no evidence the company ever performed any services.
In the new report, Perdue-Byrd told Denmark that she was aware grant funds were provided to Visit Us, adding that nothing had been spent. She said those funds remain in the company’s bank accounts.
Like many of the churches and companies that received CARES Act funds from the city, Union Missionary Baptist Church is located outside of the city limits. A church that is in the city limits, Flat Rock Community Church, also received an unsolicited grant of $100,000, according to the report.
“We were unaware that the church had received a grant award, since all information related to community-based awards has not been made available to us,” Denmark wrote in the new report. The program’s shoddy accounting has been questioned in several places by Denmark, who requested further investigation by law enforcement agencies.
Charles Bennafield, pastor at Flat Rock church, told Denmark that he received the unsolicited grant and was instructed by Lary to cut $18,000 worth of checks to three companies. One of them, One Way Management LLC, is run by James Lary, one of the mayor’s sons.
The report cites an email where Lary wrote Bennafield: “You can give them to James when y’all meet.”
The report concludes that additional supplementary reports are likely in the future, and it lists multiple recommendations for further action.
The five-member City Council voted earlier this week to grant Denmark’s multiple requests, which included launching an external audit of the city’s CARES Act program; voiding improper contracts; calling on law enforcement for further investigation; and attempting to recover some of the funds.
The story so far: Stonecrest received $6.2 million in federal pandemic relief funds from DeKalb County. Questions were raised after the city contracted with a newly formed nonprofit to disburse those funds to small businesses. An internal investigation began, and its results were released last week, finding widespread mismanagement and improper contracts that resemble a kickback scheme.
What’s next?: The city attorney and Stonecrest staff will begin taking the recommended actions detailed in the investigative report, which includes an external audit of the program and tracing where the money was spent.
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