Sunday, October 13, 2013

Foothills Regional Airport (KMRN), Morganton, North Carolina: Answers in holding pattern

MORGANTON, NC — Three men pleaded guilty to taking money from the Foothills Regional Airport that sits between Morganton and Lenoir.

Randy Hullette, former chairman of the board of Foothills Regional Airport, pleaded guilty Aug. 21 in federal court in Asheville to embezzlement and witness tampering. Alex Nelson, former airport manager, pleaded guilty in September 2012 for conspiracy, embezzling, and money laundering. Brad Adkins, the operations manager, pleaded guilty on the same day to conspiracy and embezzlement. The three men have yet to be sentenced.

That’s important because it was tax money, culled from federal, state and local allotments, that is at the heart of the charges. In short, they stole from you, the taxpayers.

A presentence investigation report for Nelson and Adkins was filed Sept. 11 but the reports are sealed documents available only to the attorneys on the case. The reports aren’t accessible even after the case is over, according to federal officials. Reports contain a lot of information beyond the particulars of the case such as personal/private information. For example, reports can include information about a person's medical or mental health condition, federal officials say.

Each side in a case gets to file any objections to a presentence investigation report. Both Nelson and Adkins have filed for and been granted an extension to answer the presentence investigation.

Once the final presentence report is filed, the date for sentencing will be scheduled, federal officials say.

Will others be charged in the case? Let’s look at some of the unanswered questions that remain.

Were two fuel trucks sold?

When the FBI was tracking down possible crimes related to the airport, the sale of two fuel trucks were found to be part of the case. But the revelation went nowhere.

Airport and local government representatives clammed up when talk turned to the sale of the fuel trucks — one jet fuel truck and one aviation fuel truck.

The FBI instructed officials not to talk about the trucks or what could have happened to the money from the sale, Louis Vinay, attorney for the airport, said at the time.

In 2010, the airport replaced two fuel trucks it owned with two new trucks. The new ones are leased.

There was never a bill of sale for the original two trucks, and the money from the sale never ended up in the airport’s bank account.

Hullette, Nelson and Adkins, pleaded guilty but the two fuel trucks were not mentioned.

Louis Vinay, attorney for the airport board and Morganton city attorney, said he has heard nothing about the fuel trucks during the plea agreements with Hullette, Nelson and Adkins.

One of the charges Hullette pleaded to — witness tampering — indicated other people were involved, Vinay said.

And Vinay said the airport has not closed its books on the matter.

“No one has forgotten the fuel truck sales, certainly,” Vinay said.

Is there money missing from timber sales?

Questions last year also arose around timber that was cut from airport property and sold.

When the FBI raided the airport in June 2012, the warrant included records from the airport involving Nelson and Adkins and Hullette, Hullette Aviation, Burkemont Service Center, RANMAC, Inc., Jeffrey Rose, Grady Rose Tree Service, Jimmy “Ron” Gilbert, Gilbert Grading and Construction, Simon Roofing and Parton Lumber.

At times, timber on the property was cut and sold to inject money into the airport budget. Last year, airport officials said there was no record of the board voting on more than cuttings in 2012 and around 2008.

A deed appears to have been drawn up March 11 2008 but wasn’t signed until March 11, 2011. Cutting a 28-acre portion of a larger tract on Old Amherst Road brought in $28,000, with any additional timber cut beyond that amount bringing more money.

There are three contracts for Parton Lumber, named in the timber deed as Parton Forest Product in Rutherfordton, to cut timber on airport property. Each one is a timber deed that was never filed with Burke County Register of Deeds, but that’s not unusual, Vinay said last year.

One is dated Dec. 27, 2010 for $59,107 for cutting timber from a 32-acre portion of a larger tract and signed by former airport manager Alex Nelson.

Another one was dated May 11, 2010 but wasn’t signed until May 11, 2011. The deed was for $39,000 to cut a 40-acre portion of a larger tract of land.

Last year, Vinay talked to several board members who said they were aware of the timber cuttings. But, Vinay said, the meeting minutes didn’t show the board ever voted on it.

At the time, Vinay said the airport received all the payments required under all the timber contracts since 2010, which is as far back as he has documents.

In 2012, the airport entered into two contracts with Parton Lumber Company in Rutherfordton to cut timber from 70 acres of airport property. One contract was dated March 9 for $10,000 and the other was for March 27 for $50,900, Vinay said at the time. The $2,700 difference between revenues from the timber sales and the contract amounts was what was paid as commission to an independent timber broker, he said.

Recently, Vinay said, however, that he’s not aware of any money the airport didn’t receive from the sale of timber from its property.

 Restitution for what was stolen

The federal government’s prosecution of Hullette, Nelson and Adkins isn’t just about punishing wrongdoing but also about restitution.

And airport officials would also like to get back money the trio, and any others that may be involved, stole from the airport and, ultimately, taxpayers.

Nelson’s assets include his home in Lenoir. The federal government put a lien on the house when it raided the airport. The lien document said, in part, that the property, “May be subject to forfeiture and as substitute property…” Nelson’s home and property in Lenoir is valued at $182,700, according to Caldwell County land records.

In recent federal documents, the government said Nelson was subject to a forfeiture of $130,000 cash. As partial satisfaction of the money judgment, the preliminary judgment includes Nelson’s property at 4640 Celia Creek Road, Lenoir, a 2006 Ford Expedition, a Sun Tracker Party Barge 25 pontoon boat with motor and a 2001 Chevrolet Corvette convertible.

However, the federal government is going to have to fight Nelson’s wife, Tammy Nelson, and his ex-wife, Joy Nelson Brooks.

Tammy claims money to install a pool and to buy the vehicles was money she received from a retirement account, a severance package and investments.

Joy Nelson Brooks said, in a claim, the property the house sits on in Lenoir was given to her by her parents and she wants $25,000 for the property.

In addition, Hullette claims a Mercedes the government seized from Nelson was his and he wants it back. He claims Nelson drove the car but never paid for it. That case has been temporarily on hold, according to court documents.

Vinay said he knows Nelson and Adkins have assets, and he figures the court will have to hold a hearing on the claims against Nelson’s property. It’s also clear Hullette has assets, he said. A property search in Burke County shows Hullette owns 16 properties.

Burke put Hullette on board

The airport authority board members are appointed by commissioners from Burke and Caldwell counties and the councils of the cities of Morganton and Lenoir.

Hullette was appointed in 2006, along with Commissioner Wayne Abele, to the airport authority board as part of the consent agenda of the Republican-controlled Burke County Board of Commissioners. The consent agenda consists of different items that are considered non-controversial and are voted on in one motion. Commissioner Maynard Taylor made the motion to approve the consent agenda.

The two-year appointment to the airport board came up for a vote again in 2008 as an item for decision. The Democrat-controlled board of commissioners voted to appoint Jesse Searcy over a Hullette reappointment. The two Republican commissioners, Abele and Taylor, voted to once again appoint Hullette.

The appointment came up again in 2010 and Republicans were back in control of the board of commissioners. It was Taylor who nominated Hullette to be appointed to the airport authority board. But it was two Republicans and two Democrats, including Steve Smith and Bruce Hawkins, who appointed Hullette to serve on the airport authority board again. One Republican commissioner, Gene Huffman, was absent for the vote, according to minutes from the meetings.

It was Hullette, chairman of the airport authority at the time, who had an employment contract for Nelson drawn up. Hullette signed it. The contract was dated Dec. 12, 2008.

It was determined after the FBI raid that the employment contract for Nelson, which paid him $75,000 a year and paid for his insurance and cell phone, was not valid because the board never voted on it.

Soon after the FBI raid on June 5, 2012, the airport board voted to suspend Nelson and Adkins without pay. The board voted on July 25 to fire Nelson and Adkins.

Hullette stopped attending airport board meetings after the FBI raid. Citing Hullette missing too many meetings, Burke County commissioners voted to replace Hullette in September 2012.


The cities of Morganton and Lenoir and the counties of Burke and Caldwell help fund the airport. Tax money collected on airplanes by Burke and Caldwell counties transport that money, or a portion of it, back to the airport, Sandy said.

For instance:

In 2010-11, the local government funding was $42,505.

2011-12, local government funding was $44,320

2012-13, local government funding was $27,491

2013-14, the budgeted funding is $25,546.

(Funding from the cities of Morganton and Lenoir and the counties of Burke and Caldwell vary depending on capital projects and airport costs.)

Randy Hullette

Pleaded guilty Aug. 21, 2013 to: Embezzlement – maximum sentence is 10 years; witness tampering – maximum sentence is 20 years. Each charge carries a maximum payment of $250,000. As part of his plea deal, Hullette’s restitution is yet to be determined.

Alex Nelson

Pleaded guilty Sept. 24, 2012 to: Public corruption conspiracy, embezzlement and money laundering. He is facing a maximum sentence of 35 years.

Received: A $130,000 forfeiture money judgment. As part of a partial satisfaction of the $130,000 forfeiture money judgment, Nelson would forfeit his home, a pontoon boat, an SUV and a Corvette.

Bradley Adkins

Pleaded guilty Sept. 24, 2012 to: Public corruption conspiracy and embezzlement. Adkins faces a maximum sentence of 15 years.

Received: An $85,000 forfeiture money judgment.

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