County releases more details about alleged Greene insurance scheme

AND THERE’S MORE: A new indictment levies additional charges against former county manager Wanda Greene and states she misappropriated $2.3 million in county funds to set up life insurance policies in her name, her son’s name, and the names of eight other county employees. Image courtesy of Buncombe County

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.

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About David Floyd
David Floyd is the Buncombe County reporter for the Mountain Xpress. He previously worked as a general-assignment reporter for the Johnson City Press. Email him at dfloyd@mountainx.com.

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9 thoughts on “County releases more details about alleged Greene insurance scheme

  1. Robin Canuck

    If Buncombe County doesn’t even notice $2.3 million missing, and Wanda’s lavish spending didn’t even register with staff; then Buncombe County taxes are too high. Citizens should be taxed at the bare minimum, and government boards should have to scrutinize and justify every expenditure made. If they can’t, then they need to roll back taxes and make the managers and department directors do the work we pay them a quarter million dollars a year to do.

  2. Concerned Citizen

    They don’t notice because they’re paid not to. They don’t notice the expenditures because they hire friends and family members who don’t hold even the bare minimum educational requirements for the jobs they are in. Frue has held a job for quite a time rumored because of his friendship with Greene. Same with Flora. You won’t ever see the Citizen-Times report on it because they get the green light on whether to run a story or not from the County. As far as taxes ever getting cut….will never happen. The directors all think of the tax money as their personal bank accounts. There’s laws on how to back bill you and bills against giving you refunds. The deck is stacked against you.

  3. Enlightened Enigma

    This is what you have when evil democrackkks have run the show for decades … protectionism, cronyism coupled with ‘progressivism’ is why SO many US cities and counties under historic democrackkks control are OUT of control and BROKE.

  4. Stan Hawkins

    Let me see if I have this straight in a fairytale sense, of course………

    “Once upon a time………” – – A county employee is told “I have a really good deal for you”; the county will pay $six figures in a lump sum to purchase a $six figure life insurance policy for you. This occurs in 2015. But, you are told “you must not tell anyone” as this is special for you. A life insurance application is then completed and “signed” by the county employee. A policy is then received by the employee in 2015. But, “remember you cannot tell anyone or discuss this as this is highly confidential approved for a select few.” You then accept this policy as property for two years.

    Now, the summer of 2017 comes along, and your boss resigns with a federal investigation announced. But, you the employee, receive a promotion (with no competing applicants) and are now running or partially running the show. However, you begin to feel that acceptance of that life insurance policy, “only after being questioned “ may be a little concerning. Woulda, coulda, shoulda…………….sets in.

    This fairytale reminds me of some training I received in my twenty five plus years of service in the financial services industry. One of those lessons was; “if it sounds to good to be true, then it is probably to good to be true.” The other lesson was “inspect what you expect.” But, I guess that is too much to expect for someone or a group of folks managing a budget in excess of $300 million dollars.

    There is much mandatory training required of employees who work in the private sector in the topics of “fraud, waste, and abuse.” Much of this required training is implemented by government regulations at federal, state, and local levels. The training regimens typically give you numerous examples of what to look out for including examples of individuals at a higher risk and circumstances. Political figures and those close to them are noted over and over again. Common sense and “gut feeling” are underscored repeatedly.

    Now, there are some who are looking to point the finger of “you should have known better”, or “didn’t you know”, or even better “we didn’t know”. Or we could just reflect on the cartoon characters of “see no evil – hear no evil – speak no evil.”

    I wonder how this fairytale will end? I also wonder what the true “tax burden” of county citizens should be? And, of course I wonder when us taxpayers will get fed up and implement the “throw them all out strategy?” How embarrassing for a government community that has espoused a “higher plane” of individual human rights to violate the humane fiduciary responsibilities owed to it’s citizens.

    But, “this of course is only a fairytale.”

    • Robin Canuck

      I’m at the “throw them all out now” stage. How can any person in Buncombe County, in good conscience, vote for any currently sitting Board member?

      In my eyes, it’s one of two things: either the Commissioners and senior managers were complicit and knew what Wanda was doing, or they are professionally ignorant (basically too stupid) to know what they were looking at in the budgets they were adopting. In either scenario, I don’t want crooked and/or stupid people representing me or depending on them to be frugal with my money.

      • Stan Hawkins

        Just to continue the “fairy tale”; we are told by the Citizens Times that County Budget and Finance staff have stated, “no employees (recipients) of the whole life insurance policies were aware of the cost of said policies.”Huh? Let’s say you are one of these employees who received this mega benefit. You would have had to sign a life insurance application. The life insurance application would have had to stipulate the face amount ( total death benefit ) of the policies. The application would have also had to stipulate the planned premium. Note: you cannot buy a $600,000 life insurance policy for $15,000 in total lump sum premium. To continue; now when the policy is approved by the insurance company, the company sends the policy to the policy owner. In this case, we are to believe from all reports, these policies were sent to the employees.Now, here is where the County Budget & Finance Staff May have to eat crow. If in fact all policies were sent to the employees, and if in fact none of them opened the policy then maybe not. But, who does that?

        What we need is under oath testimony to get the real story out. A taxpayer revolt may be necessary to clean this county of this unsavory behavior.

        To be continued….

        • Robin Canuck

          And… They received numerous “clean” audits stating that everything was on the “up and up”. Let’s say you’re a junior auditor with Gould Killian CPA, and you stumble on half million dollar individual policies, or an individual annuity for Mr. Vehaun, that adds up to millions. They’re saying it didn’t even show up? I call B.S. Any halfway decent auditor can find something with two freaking commas in it.
          Also, Buncombe County has an Audit Committee that includes current commissioners, so Mr. Pressley and Mr. Whitesides has ringside seats to ask all of the questions they wanted and direct the auditor to any page in the budget book, but they did nothing but blindly do what staff told them to do. (AKA, that’s not leadership)
          While we’re at it, what about Brownie Newman? If he’s so gung ho about “being transparent” and “getting the facts out there”; why has he stonewalled the media? WLOS, AC-T and others all have active, yet unfulfilled, information requests. My guess is, he knows something and when the poo hits the fan he knows he’ll go down with it.
          It also hinders us taxpayers knowing stuff that the dude giving them legal advice was a recipient of Wanda’s gratitude (and a future big ole check). How can he continue to give legal advice when he’s now named in parts of the investigation (as a recipient)?
          That’s why I say, you were either in on it, or you’re too stupid to keep your job. The let’s just promote Mandy Stone decision makes me think it’s the latter.
          I wish we could hold a recall election right now.

  5. jason

    Is there no oversight at all? Why am I paying so much in taxes for this BS to happen?

    • Stan Hawkins

      “We the people are the oversight.”

      We failed some eight years ago, when at the heights of the Great Recession and 10% unemployment in Western North Carolina. Just as many of us were paying our property taxes, we found out that this same out of touch attitude was in play when we discovered some of these same folks and former commissioners were in Hawaii at some swanky airport authority meet up. This was our wake up call, but we failed to act. Their fiduciary responsibility was off the rails already. The warning signs were flashing.

      What we see now is that same attitude of, out of touch, arrogant, disrespectful disregard for fiduciary responsibility. We the people have the power to change all of this. IT BEGINS WITH CHALLENGING EVERY DOLLAR THIS COUNTY SPENDS. It should no longer be acceptable to formulate a budget on the premise of, “well we spent this much last year, let’s increase that by 5%.”

      Until we challenge every dollar this county spends, we will continue to get the government we have today. They simply do not care how much of YOUR money they spend.

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