JoAnn Davis, accused in a federal indictment of taking more than $200,000 in kickbacks in her role as the executive director of the Chatham County Housing Authority, pleaded not guilty last Thursday to charges of wire fraud, identity theft and obstruction.
Davis made the plea during her arraignment at the U.S. Middle District of North Carolina Court in Durham. She was arrested the previous Friday, Feb. 24, after being named in a 19-count federal indictment filed on Feb. 13.
Natasha J. Elliott, the executive director of Central Piedmont Community Action and a CCHA board member, told the News + Record that Davis is “innocent until proven guilty,” and said Davis was still on the job, working from home.
She referred additional questions to Brian L. Crawford, an attorney with Michael Best & Friedrich LLP in Durham, who serves as counsel for the CCHA. Crawford, reached by telephone on Monday afternoon, indicated he would respond to a list of written questions provided by the News + Record later in the week.
Meanwhile, doors at the CCHA’s offices off U.S. Hwy. 64 in Siler City have been locked to the public. A sign on the door indicated the office would see clients by appointment only effective March 7. A person answering the door on Monday told a News + Record reporter “No comment” before closing and re-locking the door.
Aside from Elliott, other CCHA board members include Sheryl Andrews, Mary Moore, Shamilla Godfrey and Jackie Thompson. Elliott said the board is scheduled to meet next on March 21.
The News + Record has requested minutes of CCHA meetings from the last two years and other information from Crawford and board members in an effort to review board activity, but they’ve not been provided. Davis, in her capacity as executive director, also acts as the board secretary.
The Chatham County Housing Authority oversees the distribution of 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 five-year plans to become fiscally self-sufficient and help others in the program become homeowners through subsidized mortgages, according to the CCHA website.
Criminal defense attorney Alvin Hudson represented Davis at last Thursday’s arraignment. Davis didn’t speak to reporters following the arraignment.
“We’ll wait and see how this plays out,” Hudson said.
Hudson said Davis had not seen the affidavit prior to her court appearance.
Karen Howard, the chairperson of the Chatham County Board of Commissioners, told the News + Record she’s asking County Manager Dan LaMontagne and County Attorney Bob Hagemann “to further assess our position and options with respect to CCHA.”
The county’s commitment, she said, was to ensure that services clients need and expect from the authority remain available and accessible to them despite the ongoing litigation.
“As you can imagine, the allegations of disrespect and thwarted requests for support from clients are very disturbing to us, but, as an outside agency, we did not oversee staff nor can we directly supervise through the current situation,” Howard said. “However, we are committed to ensuring continuity of service and will work with our local partners to that end.”
Chatham’s Housing Authority, created in 1970, operates as a public corporation created through federal and state legislation, making it a quasi-governmental agency — supported by the government but managed privately. It’s governed by a five-member board whose members are appointed by the Chatham County Board of Commissioners. The Housing Authority uses no local tax revenue in its operations, but rather federal funds as vouchers, or subsidies, to help secure housing.
The CCHA is responsible for the day-to-day administration and management of the program, including selecting households, determining eligibility for the program, issuing Housing Choice Vouchers, inspecting housing units and making rental payments to owners.
Davis, who has run CCHA since July 2012, is accused of using her position to fraudulently award contracts for services — including housing inspections, staff training and client workshops — to friends and family members (see the full timeline). In return, the federal government says Davis received “kickbacks” from those friends and family members — allowing them to keep small percentages of the payments after they returned most of the cash to her — even though the services were never performed for the housing authority.
Four other people — Clintess Roberta Barrett-Johnson, Michele Necole Bell-Johnson, Robert Johnson Jr. and Candace Agatha Brunson-Poole — were also named as family members and friends in the indictment and arrested.
Davis, Barrett-Johnson and Brunson-Poole are former employees of the Durham Housing Authority, according to the Raleigh News & Observer.
Davis potentially faces decades in federal prison. Additionally, Davis also faces the loss of some of her pension benefits under a provision of state law applying to felonies directly related to employment as a local government employee.
N.C. Treasurer Dale Folwell told the News + Record that North Carolina’s Local Governmental Employees’ Retirement System (LGERS) has statutory provisions defining the impact on pension benefits when individuals are convicted of felonies directly related to their employment. The provision for employees other than elected officials became effective Dec. 1, 2012, and applies to offenses committed on or after that date.
For employees who had at least five years of service as of that date, Folwell said, they would lose any part of their pension benefit derived from service or compensation on or after that date. They would, however, be entitled to a refund of their own contributions to LGERS on or after Dec. 1, 2012, plus interest. For employees who did not have at least five years of service as of that date, they would receive a mandatory refund of all their contributions to LGERS plus interest, and would not be entitled to any pension from LGERS in the future.
A guilty verdict triggers the provision, Folwell said, adding that in the past he’s made a decision to “lock down” an employee’s pension when he felt they might abscond with fund, “especially in embezzlement situations.”
“I will tell you, most of the time, the criminals know they’re getting ready to be indicted before we do, and a lot of the time that money has been withdrawn,” he said.
Chatham residents who were in the CCHA program have told the News + Record in the past week that some Authority employees were complicit in taking housing vouchers away from program participants who tried to leave the program because of conflicts with Davis. The claims could not be verified with CCHA employees, who would not return calls seeking comment.
Taylor Heeden, Seamus Hughes and Ben Rappaport contributed to this story.