by David Floyd and Daniel Walton
Key West, Martha’s Vineyard, Budapest, Vienna and the Napa Valley — those are just a few of the exotic locales a new indictment alleges three former Buncombe County officials visited using kickbacks they received in exchange for local government contracts.
A federal grand jury returned a bill of indictment Aug. 7 bringing charges against three former Buncombe County officials: former County Manager Wanda Greene, former County Manager Mandy Stone and former Planning Director and Assistant County Manager Jon Creighton.
“During the relevant time period, Greene, Creighton and Stone used their official positions to enrich and benefit themselves,” the U.S. Attorney’s Office for the Western District of North Carolina said in a press release issued Tuesday, “and, in doing so, they deprived Buncombe County citizens of their right to the honest services of the defendants.”
According to the indictment, Greene, Creighton and Stone used their positions for personal benefit by asking for and accepting gifts, payments and other items of value from a contractor, who is not named in the indictment, in exchange for county contracts.
In a statement released just after 9 p.m. on Aug. 7, the Buncombe County Board of Commissioners said the county would review any contracts with Joseph Wiseman Jr., as well as “any entities with whom he is or has been associated,” to determine the county’s strategy for moving forward. Commissioners instructed the county’s legal team to take action to “recover any monies that were expended as a part of the fraudulent scheme set forth in the indictment.”
Prior to 2014, county employees, including Greene, Creighton and Stone, went on trips connected in some way to county business. During those trips, the indictment says, the contractor provided expensive meals, wine and tickets to sporting events. By 2014, the trio of county officials allegedly began requesting and accepting trips, gifts and other items of value from the contractor that were unrelated to legitimate county business.
The indictment says some of these trips coincided with official conferences, such as the International City/County Management Association or the National Association of Counties, which the defendants used as an excuse to explain their travels — most of which had no relationship to official business.
The indictment alleges that the contractor paid for trips to Key West, Boston, Martha’s Vineyard, Maine, Phoenix, the Napa Valley, the Grand Canyon, Jackson Hole and Yellowstone National Park, as well as Vienna, Budapest, Cartagena and Vancouver.
According to the indictment, the contractor paid for airline tickets, hotel rooms, meals, beverages, ground transportation, sightseeing trips, spa sessions and gift shop purchases, which included cases of wine from Napa Valley vineyards and health and beauty items from spas that Greene and Stone visited.
The indictment says Greene and Creighton had the authority to award county contracts to the unnamed contractor’s companies. “They and the contractor understood and agreed that providing these trips, gifts and favors was a necessary condition to his companies’ continuing to obtain contracts with the county,” the indictment reads.
The indictment says the contractor provided Greene, Creighton and Stone with his credit card numbers to make the process easier.
The officials typically used the card numbers to make travel reservations for the trips, the indictment says, but they sometimes charged the county directly for airline tickets on trips that coincided with nearby official meetings. The indictment says that on occasions when Creighton’s wife accompanied him on trips, he usually paid for her airfare using his own money.
When the contractor accompanied Greene, Stone and Creighton on trips, the contractor typically put the expenses on his credit card, the indictment says. When the contractor did not accompany the defendants, they used a copy of the contractor’s card to pay for rooms, meals, beverages, gift store purchases and other expenses. At times, the indictment says, Creighton would use his own credit card to pay for lodging in order to earn reward points on his Marriott Rewards account. The contractor would then reimburse him for those expenses.
The indictment says the defendants were also able to sell accrued annual leave hours back to the county by submitting false time records that claimed they had worked eight or more hours during work days and some weekends while they were on non-business vacations. The defendants, according to the indictment, also submitted per diem and expense claims for the cost of meals and other expenses during those trips — even though the contractor was paying for those meals and expenses.
The indictment says the three former county employees also submitted reimbursement claims for parking costs at the Asheville Regional Airport, airline seat upgrades and baggage fees or used county-issued credit cards to pay those fees.
The contractor usually negotiated county contracts through Creighton, obtaining contracts for three companies the contractor was affiliated with — one of which he owned outright. The county contracts often included a condition the indictment noted is unusual: If the contractor “became disassociated” from the company for any reason and no longer served as the project manager for the agreement, the county could terminate the agreement immediately.
According to the indictment, the county government “often unwittingly” funded the bribes and kickbacks paid by the contractor. The contractor kept records of the costs of tickets, lodging, meals and other benefits and sent invoices to the county claiming that the expenses were for the completion of specific portions of a county contract. The county allegedly reimbursed the contractor for the cost of kickbacks given to county officials, which the indictment says the contractor misrepresented as expenses associated with county contracts.
The defendants face 29 counts of wire fraud and aiding and abetting the same; one count of conspiracy to commit an offense against the United States; one count of receiving bribes and kickbacks and aiding and abetting the same; and one count of federal program fraud and aiding and abetting the same.
Greene, Stone and Creighton are scheduled to appear in court on the new charges on Monday, Aug. 20 at 9 a.m. in Asheville.
The taxman cometh
The grand jury also introduced new charges against Greene specifically: six counts of tax fraud tied to falsification of her income tax returns for calendar years 2012-17. For each of those years, the indictment claims that Greene failed to report the additional income she made by embezzling Buncombe County funds. That amount fluctuated from approximately $8,400 in 2012 to $29,256 in 2015.
The new counts flag the whole-life insurance policies Greene purchased in 2015, when she allegedly failed to report $310,000 in Buncombe County funds that were transferred to her money market account for buying those policies. She then omitted an additional $62,000 and $160,000 of insurance purchases in 2016 and 2017, respectively.
Beyond lies of omission, the indictment alleges that Greene falsely claimed business expenses on her Form 1040 for 2012, 2013 and 2017. For that most recent year, she allegedly submitted an additional Schedule C form claiming sole proprietorship of a business named only “Buncombe County.” While Greene claimed that Buncombe County made no income, she did attribute it with expenses of over $32,000, including $25,000 in “legal and professional expenses” and $8,300 in “utilities.”
The actual Buncombe County, for comparison, took in nearly $331 million in taxes, fees and other income for fiscal year 2017. Greene’s own reported income for 2017 was nearly $525,000.
Each of these tax fraud counts carries a maximum penalty of a $100,000 fine and 3 years of prison time. If convicted on all six counts, Greene thus faces up to an additional $600,000 in fines and 18 years of imprisonment.
In an email received at 5:23 p.m. on Aug. 7, Brownie Newman, chair of the Buncombe County Board of Commissioners, wrote to Xpress, “The commission has not prepared a statement as a group at this time. As Chair, I would simply state that, if proven true, these charges against former county employees represent a deep violation of the public trust. We are committed to doing everything we can to cooperate with this ongoing investigation.”
The two indictments can be read in full below.