An indictment returned June 5 brings new charges against former Buncombe County Manager Wanda Greene and alleges that she used $2.3 million of county money to purchase life insurance policies in her name as well as the names of her son Michael Greene, who worked for the county, and eight other county employees. An annuity was purchased for an additional employee.
“None of these county employees had any knowledge or access to information that would have informed them that these policies were not approved nor of the actual cost involved,” the Buncombe County Board of Commissioners wrote in a statement released on the evening of June 5. “It is believed the Dr. Greene misled them as a vehicle for her own financial gain and that of her son.”
The board also announced that a civil lawsuit would be filed against Wanda Greene and Michael Greene in an effort to seek restitution for losses caused by their actions “as well as any other persons or entities that have participated in or profited from the unlawful actions of Wanda Greene and Michael Greene.”
The statement says Greene used an appropriation from an unrelated budget amendment, which slid through on the board’s consent agenda, to pay for the policies. The Board of Commissioners never approved the appropriation or purchase of the life insurance policies for certain employees, according to its statement.
All employees except Wanda and Michael Greene came forward and assigned the policies to Buncombe County after learning that Greene did not follow the legal requirements for issuing these benefits and that the board did not approve the purchase of these policies, the board said.
The county employees who were named the owners of life insurance policies were Staff Attorney Michael Frue, Chief Financial Officer Tim Flora, Budget Director Diane Price, County Manager Mandy Stone, Director of Permits and Inspections Matt Stone, former General Services Director Greg Isreal, retired Planning Director Jon Creighton and city and county Identification Director Pat Freeman; the county purchased an annuity for Emergency Services Director Jerry VeHaun.
The indictment says Wanda Greene cashed in two whole-life policies issued in her name shortly after she retired, obtaining about $396,000. According to the Board of Commissioners, two policies with a value of about $143,000 are still outstanding in Michael Greene’s name.
“If proven true, this will be another example of Wanda Greene misleading the Board of Commissioners, a number of current and former county employees and county taxpayers, with the goal to use public funds for personal benefit while involving other county employees in an attempt to hide her actions,” the board said in the statement.
News of the indictment broke during a regular meeting of the county Board of Commissioners on June 5, prompting the board to add the item to its agenda for a previously scheduled closed session. Commission members returned to open session to issue the statement.
Before the new indictment was announced, the board wrote, federal investigators had asked Buncombe County to refrain from taking any action that would impede the investigation.
“From this investigation, it was determined that an unknown number of whole-life insurance policies were purchased for known and unknown current and former county employees,” the statement reads. “It has taken the last 10 months of external and internal investigation to uncover the details regarding what was purchased and the amount of public funds involved.”
In clarifications released June 6, the county said Wanda Greene instructed some employees not to tell other senior staff they were receiving this benefit. When asked by state and federal investigators if they ever received a benefit from Greene they questioned, Frue and Mandy Stone noted the life insurance policies.
The county began a yearlong internal investigation in mid-July 2017 to trace the amount of money spent and the recipients of the policies. No master list contained all the names of the recipients. The county received assistance from outside legal counsel to help investigate and recoup funds it says had inappropriately been used to pay the premiums for the policies. The county says that aside from Wanda Greene and Michael Greene, no other county employee received any financial benefit from the policies purchased on their behalf.
The new indictment adds 12 new counts of wire fraud, eight counts of federal program fraud and three counts of money laundering to the tally of charges filed against Wanda Greene in the first indictment. The first indictment levied one count of conspiracy and 50 counts of wire fraud against Wanda Greene and Michael Greene as well as an additional five counts of program fraud against Wanda Greene.
The maximum penalties for the charges are:
- 5 years in prison and a $250,000 fine for the conspiracy charge.
- 20 years in prison and a $250,000 fine for each count of wire fraud.
- 10 years in prison and a $250,000 fine for each count of program fraud.
- 10 years in prison and a $250,000 fine for each count of money laundering.
How the scheme unfolded
The June 5 indictment says Wanda Greene began communicating with a Charlotte insurance agent in April 2015 about obtaining life insurance policies for herself and other Buncombe County employees. The agent represented Guardian Life Insurance Co. of America, which is based in New York.
In April and May, the indictment says, Greene began falsely telling the employees selected to receive the policies that she had been working with the Board of Commissioners on a new benefit program that would provide the policies at no expense to them.
The indictment says Greene took advantage of two federal civil rights lawsuits against the county that were in settlement negotiations to purchase the policies. She drafted a proposed budget amendment for the board to vote on during its Aug. 4, 2015, meeting that would authorize the transfer of $8.59 million from the county general fund to a fund set aside for “Claims/Benefit Pmts/Insurance & Bonds.”
The board went into closed session during that meeting to discuss the proposed settlement for the lawsuits. Greene told commissioners that on the advice of county attorneys and insurance carriers, the county had agreed to settle for $7.14 million, which she said was included in the proposed budget amendment. The indictment says Greene did not tell commissioners about the existence of the life insurance program she was creating for herself and certain county employees.
The indictment says the budget amendment appropriated far more money than was necessary for the settlement payment, which totaled $8.2 million, including $1.06 million for the wrongfully convicted individuals’ attorney fees. The county had indemnity insurance with three carriers that paid $3.91 million for the settlements and attorney fees, leaving a net expense to the county of $4.3 million. From the surplus of $4.3 million in the fund, Greene used $2.3 million to purchase the life insurance policies, citing the budget amendment as her authority to do so, according to the indictment.