GREENSBORO — The executive director of the Chatham County Housing Authority was arrested Friday as part of a wide-ranging federal investigation into more than $200,000 in kickbacks and payoffs from bogus projects initiated from her Department of Housing and Urban Development (HUD) office responsible for providing housing to low-income families, the elderly, and disabled.
Prosecutors say JoAnn Johnson Davis, who has run CCHA since July 2012, used her position and her Siler City office to fraudulently award contracts for services — including housing inspections, staff training and client workshops — to friends and family members in exchange for kickbacks, even though the services were never performed for the housing authority.
Four others were also charged related to crimes linked to Davis and an additional 14 individuals were cited as unindicted co-conspirators in the charging documents.
The 19-count indictment, which was filed on Feb. 13 in U.S. District Court in Greensboro but unsealed Friday, paints a picture of widespread and persistent corruption within the agency tasked with securing affordable housing for Chatham County residents in need. The charges include wire fraud, program fraud and identity theft, and involved Davis’ friends and family members and at least two other former employees of Durham County Housing Authority and one other current HUD employee.
Also named in the indictment were Clintess Roberta Barrett-Johnson, Michele Necole Bell-Johnson, Robert Johnson Jr. and Candace Agatha Brunson-Poole. It was not immediately known the nature of Davis’ relationship with those four people.
All told, the Justice Department says Davis — who’s still listed as CCHA’s executive director on the housing authority's website — awarded illegal contracts to at least 13 friends and relatives. According to charging documents, those friends and relatives would submit no-work contracts to Davis, who would ultimately award them. The co-conspirators filed both their own bids and also competing bids in the false names of other individuals, knowing that the dummy bids would not win the contracts.
According to the indictment, between 2017 and 2020, the CCHA received more than $10,000 a year from HUD’s Housing Choice Voucher Program — also known as "Section 8" — which assists low-income families, the elderly and the disabled with housing in the private market. As the executive director of the CCHA, Davis had the authority to select winning bids from among proposals received for contracts for services that would be paid for with the HUD funds, the indictment stated
Court records say the contracts cited in the indictment were largely a pass-through back to Davis. For example, in late June 2016, the CCHA, under the direction of Davis, allegedly awarded a bogus contract to one individual for $800 dollars. The federal indictment states that person transferred $700 dollars back to Davis. Prosecutors provided multiple additional examples in the court records of similar fraudulent efforts. In some cases, the contracts were allegedly awarded to individuals with no background in housing issues, such as a friend and cosmetologist of Davis.
In one instance, the contract was so hastily put together with little federal oversight that a friend of Davis was awarded money, even though his own name was misspelled on the invoice. Authorities say Davis received a kickback of $3,700 on that contract out of the $4,000 that was awarded to the typographical error-filled bill.
Investigators pulled the cell phone location records of at least one individual to help build the case that they were not present in Siler City at the time of work that was purportedly performed under the contracts. All told, the Justice Department says Davis reaped more than $200,000 in the illegal scheme over the course of more than eight years.
According to the U.S. Attorney's Office for the Middle District of North Carolina, investigators from the Federal Bureau of Investigation and the HUD Office of Inspector General conducted the investigation.
The charging documents state that, at some point, Davis became aware of the HUD/FBI interest and made efforts to stymie the investigation. Her relatives were concerned about the federal pressure and allegedly communicated with each other that, “we family…don’t mess with that.” In a text message with a co-conspirator, charging documents say Davis told them, “you can tell them I'm the big fat aunt you don't f*** with." Prosecutors used that evidence to also indict Davis on charges of obstruction of justice, in addition to the wire fraud and identity theft.
The U.S. Attorney's Office for the Middle District of North Carolina, which is prosecuting the case, late Saturday referred News + Record to information laid out in charging documents.
Chatham County Manager Dan LaMontagne told the News + Record that although Chatham County government supports the mission of the Chatham County Housing Authority, and members of the Chatham County Board of Commissioners appoint board members to the Authority, the Authority is not part of Chatham County government — but instead is a separate legal entity. As such, Davis is not a Chatham County employee.
"The Chatham County Housing Authority’s mission in providing assistance for affordable and safe housing to residents of Chatham County fills a critical need," LaMontagne said. "We trust that the Authority will continue this important work while these internal issues are resolved."
Officials from HUD, which employs two of the defendants named in the indictment, did not respond to requests for comment. A lawyer for Davis was contacted but did not respond.
According to its website, CCHA’s purpose is to “(oversee) federal funds to help qualified low-income residents with their rental payments. The authority also works with some families in the rental subsidy program to develop a five-year plans (sic) to become self-sufficient and help others in the program become homeowners through subsidized mortgages.”
The CCHA homepage prominently features a quote from Davis: “When we all work together to give residents the tools they need to become safe, healthy, and self-sufficient — the entire community wins.”
A short biography of Davis on the CCHA website states as executive director, she is responsible for “ensuring that the housing authority complies with all applicable Federal, State, and local laws.”
Prior to working for CCHA, Davis worked at the Durham County Housing Authority and the Gaston County Housing Authority.
Davis had her first appearance in front of a federal judge at a Greensboro courthouse on Friday and was ordered released pending her arraignment Thursday in Durham. Her criminal trial is tentatively set for April 10.
Shannon Keith and Bill Horner III contributed to this report.