Pandemic relief meant for Stonecrest businesses lost in city hall turmoil

210415-Stonecrest-Stonecrest Mayor Jason Lary holds a press conference at city hall on Thursday, April 15, 2021. Ben Gray for the Atlanta Journal-Constitution
210415-Stonecrest-Stonecrest Mayor Jason Lary holds a press conference at city hall on Thursday, April 15, 2021. Ben Gray for the Atlanta Journal-Constitution

Credit: Ben Gray

Credit: Ben Gray

A shopping mall in south DeKalb County was forced to close down for months last year due to the pandemic. Many businesses had to cut staff or limit hours. Others didn’t make it past the summer.

The small business owners in Stonecrest Mall were among the hundreds to apply for a piece of the $6.2 million in coronavirus relief money Stonecrest offered to help people weather the pandemic.

But a bombshell investigative report released this past week revealed the relief money disappeared into a complicated tangle of Stonecrest city employees, agencies and third-party companies. The report says there is strong evidence of a kick-back scheme in which city employees and their cronies enriched themselves with money intended to help the community through the pandemic’s economic fallout.

The city is now working to trace where the money went and to stop any further payouts.

“It was rough being closed for two months,” Ron Washington, owner of AJ’s Italian Ice, said. “We all could have used that money.” His application was among some 300 requests for help that were turned down.

Based on the findings of the city’s investigator, at best, the city’s relief program wasted a large portion of funds that could have helped preserve jobs and businesses. At worst, it was a calculated criminal scheme.

“It was meant for us, small business people. And ... nothing,” said Nadine Clarke, who runs C&N Jamaican Restaurant. Her application for financial help also went unfulfilled.

The Stonecrest City Council, frustrated by a lack of answers about how the relief program was being run, requested the city attorney conduct the investigation in February.

Alarmed by what he found, City Attorney Winston Denmark recommended federal authorities get involved to figure out whether actions were malicious. A state senator has also called for federal agencies to investigate.

ExploreInvestigation: Stonecrest’s relief program ‘plagued by mismanagement’

All eight city employees implicated in the report were fired by Jacobs Engineering, the Dallas-based private company contracted to provide city staff. A statement from the company says the employees, “demonstrated complete disregard for the company’s compliance programs and protocols.”

The former employees either declined to comment, denied any allegations of wrongdoing or could not be reached.

Paid to write checks

Stonecrest, formed in 2017, has always paid an outside agency for staff who provide basic city services. The mayor, City Council and newly appointed city manager are the only non-contracted employees in Stonecrest.

Several Jacobs employees were put in charge of designing an application program to distribute the $6.2 million in federal pandemic relief funds to small businesses and charities.

On Nov. 6, Deputy City Manager Plez Joyner signed a contract with Municipal Resource Partners, a nonprofit founded last May, to pick CARES recipients and write checks. Joyner agreed to pay the organization a hefty 8.5% fee — $510,000, for disbursing funds.

Denmark said in the report that the contract paid Municipal Resource Partners more than $2,000 for every check written.

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The report also said Joyner didn’t have the authority to sign the contract, because he needed the approval of mayor and council. A councilmember had to file an open records request to obtain the contract in February after city staff wouldn’t provide it.

Clarence Boone, the city’s economic development director, signed four checks to Municipal Resource Partners totaling $6 million by December. He didn’t disclose that his wife was an official with the company and that she would write most of the checks.

A 12-person board, which included two council members, provide oversite for the program. But Denmark’s investigation found Boone, Joyner and Stonecrest Chief of Staff Iris Settle were the primary people who doled out funds and signed contracts without proper approval.

On Oct. 30, Boone paid $5,000 to C.B. Keener LLC, which Secretary of State records show wasn’t founded until days later, to review and validate grant applications from small businesses.

ExploreOPINION: It’s raining money in Stonecrest. Some went down the sewer

Marketing relief

About 450 businesses applied to receive financial help through the program. However, the application form included a few questions that puzzled some business owners.

They were asked whether they’d be willing to allocate 25% of the grant to market their business through one of three companies: Visit Us, Inc., Battleground Media LLC and Real Estate Management Consultants, Inc.

Visit Us was founded last July by Thompson Kurrie Jr., the founder of Municipal Resource Partners and Stonecrest’s first city attorney. He stepped down from the city attorney job in 2019 but continued as an assistant city attorney until February, when the city called for Denmark to investigate.

That same month, Visit Us was transferred to attorney Robert Burroughs, who would go on to found Battleground Media and Real Estate Management Consultants in October. The listed addresses for those two companies is property owned by Mayor Jason Lary’s real estate company.

Burroughs declined to comment, and Kurrie denied all accusations of wrongdoing. Lary has praised the city’s CARES efforts, denied any wrongdoing and claimed his detractors have a political vendetta against him.

ExploreSenator calls on Gov. Kemp to remove Stonecrest mayor from office

Many of the companies who received money, and even some whose requests were ultimately denied, said Boone and Lary pushed them to write checks to the marketing companies.

Denmark spoke to nine of the 138 grant recipients for his investigation. Five of them wrote checks to the companies totaling $65,000. The Atlanta Journal-Constitution spoke to the owner of a company, which was awarded $150,000 and paid 25% to Visit Us — $37,500.

Several businesses told Denmark they were misled into thinking Visit Us was the designated marketing organization for the city.

“There is no evidence that the so-called ‘marketing’ services have ever been provided, and it is unknown where the money actually went,” the investigative report concluded.

The owner of a juice bar, whose request was denied, said he remembers receiving a call from Boone, who tried to talk him into cutting a check to one of the companies.

“They told me that they ran out,” the owner said, adding that he thought the most anyone was given was $15,000.

The largest recipient, Arizona’s Steak House, was awarded $250,000.

Grants awarded by Municipal Resource Partners
After receiving 450 applications, the organization approved grants to these 138 small businesses. Roughly $4.3 million was disbursed.
City of Stonecrest

Others involved

While most of the money was doled out by Municipal Resource Partners, city staff cut a few lingering checks to use up the rest of the funds.

A company formed in September, OCC Consulting Group, LLC, also received about $31,000 for stand-up temperature scanners. Tee Foxx, whose name pops up all throughout Denmark’s report, is the company’s manager.

Foxx held positions within Municipal Resource Partners and founded Foxx Entertainment Services, a company that received $12,000 from the city for COVID-19 face masks. Her company, which also employs Settle and her brother William, is also currently used by Lary for his personal marketing and public relations needs.

Denmark said Foxx was among the people who contacted grant recipients on behalf of the three marketing companies as well, attempting to sell them on the deal. The owner of Wrap City Vinyl, which received a $60,000 grant, said Foxx asked them to perform a “vinyl wrap” on two vehicles owned by Lary’s sons in addition to the 25% check they wrote to Battleground Media.

Foxx’s attorney said she “vehemently denied any wrongdoing” and looks “forward to all the facts coming out.”

The last entity to touch a large portion of these funds was Stonecrest Cares, a philanthropic program within the city that was supposed to distribute $855,000 to nonprofits and churches. Iris Settle is a co-founder, and the company is not a registered nonprofit.

Denmark said any checks written by the entity were improper. His investigation only found receipts for about $344,000 to 13 churches.

Money disbursed by Stonecrest Cares
This is every church and nonprofit that received funds from Stonecrest Cares. It adds up to $343,600, which is less than half of what Municipal Resource Partners said was given to the entity.
City Attorney Winston Denmark

Denmark also said Settle used COVID-19 relief money to separately pay nine consultants for some bewildering services, including tens of thousands of dollars for stress-release programs, stress packages that included candles and tea, financial education services and massages or city staff members.

Contracts with special services consultants
These contracts were approved by Iris Settle, Stonecrest's former chief of staff, using coronavirus relief money.
City Attorney Winston Denmark

What comes next?

DeKalb County Commissioner Lorraine Cochran-Johnson lives in Stonecrest and helps her aunt run Annie’s Crab Kingdom, a local restaurant that received $25,000 in relief funds from the city. Cochran-Johnson confirmed there was a question on the relief application about using funds for marketing, but said neither she nor her aunt were asked to send that money to a specific company.

“At the end of the day,” Cochran-Johnson said, “I trust the investigators to determine the facts ... and set in order anything that may be contrary to what’s right.”

ExploreProbes into Stonecrest's COVID relief program may just be beginning

The investigative report recommends the city perform an audit of the relief program spending, and ask federal authorities to launch a formal probe. While the FBI and the U.S. Attorney’s Office have declined to comment on a potential investigation, former federal prosecutor Byung J. “BJay” Pak has said he would fully expect those entities and the relatively new “special inspector general for pandemic recovery” to get involved.

“When you have a paper trail like this, it’s not very hard to track down,” Pak said. “Sometimes it shocks me that people think they can get away with something like this.”

In the meantime, city leaders are trying to move forward.

Mayor Lary announced Thursday that he planned to take medical leave. A city charter change recently stripped him of any real authority.

ExploreStonecrest mayor responds to allegations; will take medical leave

Jacobs said it cooperated with the internal investigation and said it will do the same with any forthcoming probes, “including by law enforcement.”

There’s a lot of uncertainty about what’s to come. But the controversy has already jaded many people who believed in the fledgling city of Stonecrest.

“Some folks lost that idea that we’re all one, in regards to what’s going on,” resident Aikeem Cooper said. “I think a lot of folks let their ambition and their greed got ahead of them and they forgot about the folks who need that money.”

Key players in Stonecrest

  • Mayor Jason Lary

    • Owner of Jason Lary Management LLC, a real estate company.

    • Hires Foxx Entertainment Services for personal marketing and public relations.

  • Clarence Boone

    • Former Jacobs Engineering Employee.

    • Former economic development director of Stonecrest.

    • His wife works for Municipal Resource Partners.

  • Plez Joyner

    • Former Jacobs Engineering Employee.

    • Former deputy city manager of Stonecrest.

  • Robert Burroughs

    • A private attorney.

    • Registered agent for Visit Us, Inc., Real Estate Management Consultants, Inc., and Battleground Media, LLC.

    • Drafted the contract between Municipal Resource Partners and Stonecrest.

  • Thompson Kurrie Jr.

    • Former city attorney and assistant city attorney for Stonecrest.

    • Founded Municipal Resource Partners and Visit Us, Inc.

  • Tee Fox

    • Founder of Foxx Entertainment Services.

    • Manager at OCC Consulting Group, LLC.

    • Former CFO and secretary at Municipal Resource Partners.

  • Iris Settle

    • Former Jacobs Engineering Employee.

    • Former chief of staff of Stonecrest.

    • Secretary at Foxx Entertainment Services.

  • William Settle

    • Former Jacobs Engineering Employee.

    • Former director of business development of Stonecrest.

    • Director of business development/corporate community relations at Foxx Entertainment Services.

Here is a breakdown of how Stonecrest spent its federal coronavirus relief funds. The money was a portion of funds sent to DeKalb County from the federal government through the CARES Act.

How Stonecrest spent its CARES Act funds
The city received $6,227,098 from DeKalb County. Every dollar is accounted for in the city's accounts.
How Municipal Resource Partners spent its $6M
After receiving the vast majority of Stonecrest's CARES Act funds, Municipal Resource Partners can't document how they spent part of the money.
*Municipal Resource Partners said this consists of bank charges & fees, contractors, legal & professional services, office supplies & software, rent & lease, relief supplies and teacher/student learning assistance. The internal investigation couldn't find records for all of these transactions.

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