MORGANTON, NC — Two former employees of Foothills Regional Airport have agreed to plead guilty in federal court after a months-long FBI investigation into theft and embezzlement of airport funds.
According to a release Friday from the US Department of Justice, Alex Dean Nelson, 49, of Lenoir, who was the airport administrator, and Bradley Dale Adkins, 36, of Hickory, who was the operations manager for the airport, have been charged with one count each of engaging in a public corruption conspiracy.
The release said, “Nelson schemed to use his access and public authority to steal and embezzle over $130,000 from the Airport and its customers in order to fund his personal lifestyle, including purchases of a Key West vacation timeshare, a “Party Barge” pontoon boat, the building of a new in-ground pool at Nelson’s residence, and cars.”
In addition, the release said Nelson and Adkins diverted checks made out to the airport into accounts Nelson controlled. Court documents filed in the western district of US Federal Court say Nelson conspired with Adkins to run some of the stolen money through a bank account controlled by Adkins in exchange for Adkins being able to keep some of the money.
Nelson and Adkins also have been charged with embezzlement from the airport, an organization receiving benefits in excess of $10,000 in federal assistance. Nelson also has been charged with money laundering, according to the release.
The court documents say Nelson and Adkins used various methods, including Nelson pretending to “pay supposed airport expenses by making out airport checks to bogus entities and listing such payments in the Airport’s books and records as though they were for legitimate expenses.”
For instance, the court documents say, checks were made out to “Foothills Maintenance” and those checks were either cashed or deposited into an account controlled by Adkins under the name of “Foothills Cleaning, Maintenance, and Repair, LLC.” The money would then be divvied up between the two men.
Other checks were made out to “Tri County Grounds and Maintenance” and deposited into an account set up under that name that was controlled by Nelson, the documents say. The documents say Nelson deposited an airport check for $2,400 with “2 mowings/1 bush hogging[sic]” in the memo line of the check into his “Tri County Grounds and Maintenance” account, which was set up at BB&T.
The two men also stole money customers thought they were paying to the airport, the court documents say. If a customer paid by check for things such as maintenance or hangar or airplane rentals, checks were deposited into the bogus Foothills account Adkins set up. If a customer paid by credit card for the expenses, Nelson would swipe that card through his personal credit card machine that linked to a bogus company that would divert the payments to an account Nelson controlled, the documents say.
The documents say Nelson also stole from the airport by using an airport credit card to pay for personal things such as food, nutritional supplements, construction materials and tools.
“Nelson and Adkins also defrauded the airport and the Foothills Regional Airport Authority by awarding no-work contracts and contracts for services at grossly inflated prices,” the release said. “Among other things, Nelson also stole approximately 1,000 gallons of fuel from the Airport to heat a personal martial arts studio that Nelson owned.”
The timeframe for the crimes was between June 2009 and June 2012, court documents say.
On June 5, when FBI agents raided the airport they took computers, logs and records, as well as any records related to Morganton businessman and former chair of the airport authority board Randy Hullette, Hullette Aviation, Burkemont Service Center in Morganton, RANMAC Inc., Jeffrey Rose, Grady Rose Tree Service, Jimmy “Ron” Gilbert, Gilbert Grading and Construction, Simon Roofing and Parton Lumber.
The warrants were for records of airport customers and vendors, computer hard drives, electronic media, all bank accounts, checks, credit card bills, account information and other financial records. The warrants also called for any logs, registry entries, saved user names, passwords and even browser history to be turned over.
The airport authority board voted July 25 to fire Nelson and Adkins.
Nelson and Adkins have agreed to plead guilty to the charges. According to information from the US Department of Justice, the public corruption conspiracy charge carries a statutory maximum sentence of five years in prison and a $250,000 fine. The embezzlement charge carries a statutory maximum sentence of 10 years in prison and a $250,000. The money laundering charge carries a statutory sentence of 20 years in prison, a $250,000 fine or twice the amount of criminally derived proceeds, the information said.
Court documents say Jack W. Stewart, Jr. in Asheville is representing Nelson, while Albert M. Messer in Asheville is representing Adkins. Kurt W. Meyers in Charlotte is representing the US Attorney`s Office in the case.
An initial appearance and arraignment has been set for 10:30 a.m. on Sept. 24 in Courtroom 2, 100 Otis St, Asheville, before Magistrate Judge Dennis Howell, according to court filings.
In addition, the government can take approximately $130,000 it believes was derived from the violations, along with a 2006 Ford Expedition, 2008 Mercedes C300, a Sun Tracker Party Barge 25 pontoon boat with a Mercury 115 motor and a 2001 Chevrolet Corvette convertible.
Whether Nelson and Adkins are the only ones that will end up being charged in the case remains to be seen. Court documents say Nelson and Adkins “did knowingly combine, conspire, confederate, and agree with each other and others known and unknown to the United States Attorney, to commit offenses against the United States.” Those offenses include “embezzlement by agents of federally funded organizations,” the court documents say.
Board members, staff say it’s time to move on
“I just hate it for the airport really,” authority Chairman Wayne Abele said. “It’s something that nobody would have known about…It’s a shame. I put a lot of trust in both of those young men, especially Alex.”
Abele, who is also chairman of the Burke County Board of Commissioners, said he felt “duped” and may have trusted Nelson too much.
“It’s hard for me to take that they’ve embezzled from the airport,” Abele said. “…I guess I don’t feel completely sorry for them. Again, I feel my friendship with them has been betrayed.”
He’s also upset the conspiracy happened on his watch as chairman, Abele said, but he’s confident in the current staff at the airport.
“If your accountant is being fed bad information, you don’t pick up on it,” Abele said. “You don’t pick up on these things overnight.
“It takes awhile for your cash flow to go down to such a point where you start saying, there’s got to be something going on...They get too greedy and you finally catch them.”
Authority Attorney Louis Vinay said, “Until today (Friday), all we’ve known is rumors basically…By no means were we able to sort this out because some of these things are matters we didn’t have access to.”
The charges and plea agreements are a “big step forward” for the airport, Vinay said.
He had not seen the plea agreements as of Friday, Vinay said, but hopes to have a copy in hand on Monday.
“It’s plainly an unfortunate thing, but we’re glad some closure is being reached on some part of this,” Vinay said.
Authority member and Lenoir Mayor Joe Gibbons said he was glad the FBI investigation has come to a conclusion and that more information is now available.
Gibbons said he was disappointed in Nelson and Adkins, as they were entrusted with leading the airport, but he focused on the future of the airport.
“Even during this time during the investigation we have continued to operate as best we can,” Gibbons said. “We hope that when this cloud is lifted from here that we’ll look for brighter things.”
Foothills Regional Airport has benefitted the four entities – Morganton, Lenoir, Burke and Caldwell – economically and will strive to continue doing so, Gibbons said.
“We want it to grow in every way it can and continue to be the economic engine it was designed to be,” Gibbons said. “…Maybe people who have left the airport for whatever reasons will continue to come back to the airport.”
Echoing Abele, Gibbons praised the current airport staff and expressed his confidence in those employees.
But even as the airport looks to its future, it will also try to regain what was lost.
“Money was stolen from the airport,” Vinay said. “The airport is certainly going to assert a claim for restitution.”
How much the airport can recover is unknown, Vinay said. He refrained from commenting further as he has not seen the plea agreements.
The airport has procedures in place such as having checks signed by two people, Abele said.
Vinay said the authority will look further into other safeguards.
“Going forward, the airport is going to focus on, among other things, on making sure this kind of situation couldn’t happen again,” Vinay said.
The investigation has also had an effect on the airport authority, as one of its members was named in an attachment to the FBI’s search and seizure warrant. Randy Hullette and his businesses, Burkemont Service Center, Hullette Aviation and RANMAC, Inc. were listed in the attachment.
Others named in the attachment were Jeffrey Rose, Grady Rose Tree Service (now called Rose Lot Clearing), Jimmy “Ron” Gilbert, Gilbert Grading and Construction, Simon Roofing and Parton Lumber.
The Department of Justice announcement Friday did not include charges for any of the individuals or businesses listed in that attachment.
The authority has already asked the Burke County Board of Commissioners to remove and replace Hullette because he missed three scheduled meetings. The Burke board is scheduled to vote on the item at its regular meeting Tuesday.
Hullette also missed two special called meetings. He has not attended an authority meeting since June 6 when the board suspended Nelson and Adkins with pay.
Abele said the authority only asked for Hullette’s removal because authority members cannot miss three meetings.
“It wasn’t based on anything else,” Abele said. “It was strictly because he missed three meetings.”
At the Burke board’s pre-agenda meeting Tuesday, Commissioner Maynard Taylor said the board would need to make clear that Hullette’s removal was due to his absences and that he was not at fault for anything.
Taylor said Hullette told him he never received a notice about the two special called meetings.
“(Hullette) has said because of the situation he’s in that he did decide he didn’t want to combat it,” Taylor said. “But I think that it is important for this board to understand, he is not guilty of anything.”
Abele, on Friday, said, “There weren’t any charges. If he wants to come back we have an opening. That’s fine, too.”
The airport authority’s next scheduled meeting is Sept. 26.
Source: http://www2.hickoryrecord.com
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