Deconstructing the Denardo Payroll Fraud: The Mechanics Require Collusion

So who are we to believe folks, the 2016 Auditors or the Outgoing City Attorney? This is what the draft 2016 audit report says:

Excerpt from City of Bay St Louis draft 2016 audit.
Excerpt from City of Bay St Louis draft 2016 audit.

And per Cassandra Favre this what Board Attorney Trent Favre said the FBI said at the last City Council meeting:

Their findings were that fraud had occurred, that the fraud was committed by Chief De Nardo through the processes of payroll to his personal account. They cleared Patricia De Nardo in their investigation, she was not complicit in the fraud. They determined that there was no other person involved in the fraud.

Did the FBI truly tell Trent Favre that Denardo acted alone with “no other person involved in the fraud”? My informed opinion is no way folks as Favre was whitewashing what happened and blamed the dead man, which is easy to do considering the circumstances plus he is contradicted by the City’s own audit firm who used the term “collusion” to describe the events.

Slabbed New Media is conducting its own investigation into the events leading to the suicide of Mike Denardo as a police department that was seething with corruption imploded under the weight of years of lies and deceit. I have interviewed sources close to the investigation as well as several former City employees that have requested anonymity due to the sensitive nature of the subject matter and fear of reprisal. I also spent the better part of Wednesday at the Bay St Louis Council chambers combing through years of official Council minutes. I’d like to personally thank Mayor Mike Favre, who ultimately declined to be interviewed about this topic but who ensured the complete and total cooperation of the City and Deputy Council Clerk Caitlin Thompson, who assisted on Wednesday fetching the 8 or 9 minute books. The City Council has two keepers in Council Clerk Tilley and her Deputy Clerk Ms. Thompson.

Ultimately I scheduled payroll transactions that were done in Ms. Patricia Denardo’s name stretching back to 2014 and it was very clear from the annual salary ordinances that she was being paid back to the previous City Council in 2013. Those early records were fragmentary but I still managed to schedule 65 paychecks totaling $78,209.71 gross payroll that were issued in her name. We also obtained Ms. Denardo’s salary history from FEMA dating to 2008 which indicate she started with FEMA in late 2007 at GS-11 on the federal salary scale. Notably Ms. Denardo’s own LinkedIn page contains work dates that correspond to the salary information Slabbed obtained via FOIA.

There is much work that remains to duplicate the FBI investigation within the constraints of not being able to obtain warrants so this project is ongoing but we will not stop until the Citizens of the Bay St Louis get some much needed transparency on how the City ran under former Mayor Les Fillingame.

To understand how the auditors came to their conclusion the Payroll Fraud involved collusion is to understand how the City processes its bi-weekly payroll. It is also clear that certain personnel actions taken by new Mayor Mike Favre directly relate to what I think the FBI really told him and the City Attorney a couple of months ago. Continue reading “Deconstructing the Denardo Payroll Fraud: The Mechanics Require Collusion”

All eyes on DoJ Internals

Judging from the following links Slabbed just put out on Twitter coupled with more recent news about the Clinton emails showing up on Anthony Weiner’s computers has me convinced the internals at the DoJ are as toxic in Washington DC as they are in New Orleans. The last tweet contains a clue into the trip down memory lane I’m taking as it regards local New Orleans DoJ toxicity:

Continue reading “All eyes on DoJ Internals”

I forgot to mention

Over the past 5 months I’ve collected a massive amount of information as it relates to the Chris Epps investigation including the construction of the new jail in Jackson County along with certain service contracts that cut across a wider geographic region. To catch everyone back up former MDOC Executive Director Chris Epps along with his self-admitted partner-in-crime Cecil McCrory had their own sentences delayed indefinitely by Judge Wingate while the Feds sort everything at MDOC out, ostensibly with Epps and McCrory’s full cooperation. I’m going to hate myself for disclosing this but I have reason to believe the FBI has visited every Sheriff in the State in regards to the Epps/MDOC investigation. This in turn sheds more color on the significant ramp up in Federal investigative resources in Jackson last summer that Slabbed previously disclosed. [link] [link].

By August two more indictments were unsealed that was accompanied by  one more guilty plea and another indefinite delay in sentencing with Irb Benjamin’s trial set for April of this year.

The reason I’ll hate myself for disclosing the Sheriff visits is because it came from a source that I can’t use which means I’m asking you folks to make a small leap of faith.  The bottom line here is that by now it stands to reason the federal investigation has greatly narrowed in scope.

Meantime here on the coast rumors of continued FBI interest surrounding the construction of the Jackson County Adult Detention Center persist.  Those rumors center on Chris Epps, one of the primary jail contractors and a former Jackson County Supervisor. Continue reading “I forgot to mention”

An early Easter Egg for Charlene…..

HurricaneWarning800
Hurricane Warning Flags

Slabbed is not quite ready to declare and hoist the Hurricane Warning flags but there has been a discernible increase in chatter related to the MDOC scandal that began on a low level in June after former MDOC Commish Chris Epps’ sentencing was delayed indefinitely steadily increasing since.  I’ve mentioned this once before though I’m not predicting anything but the MDOC scandal has the potential to greatly exceed Operation Pretense in its scope and breadth. On a timeline the Epps sentencing postponement happened in June and by that time, I had received a tip that the FBI was significantly ramping up its manpower resources in Jackson. By mid-August indictments related to MDOC were unsealed against Irb Benjamin and Sam Waggoner. Here is the salient verbiage from the US Attorney Press Release that is generating some of the chatter:

Waggoner was charged by Criminal Information with one count of bribery related to his payments of bribes and kickbacks to Epps from sometime in 2012 until at least August 26, 2014. According to the Criminal Information, Waggoner was a consultant for Global Tel-Link (GTL), which provided telephone services at MDOC facilities. The Criminal Information cites two specific instances in 2014 where Waggoner paid Epps kickbacks from money Waggoner received from GTL as a consultant.

The use of local CONsultants (aka Buffers) by the business community as a conduit for bribery schemes to get government business is nothing new folks. And when you couple the doings in Jackson with Sean Anthony’s sentence being delayed twice in successive months (September delay linkOctober delay link) with Anthony’s sentencing essentially postponed indefinitely one is very safe in assuming there is much more to come as rumors continue to swirl surrounding Anthony’s former company and a former state wide public official.

I guess all this is long winded way of saying the Feds are not done poking around in local doings including the construction of the recently named Jackson County Jail which according to water cooler talk in the investigative community has the FBI looking closely at an elected official along with one of the jail’s contractors.

None of this will completely unfold by the end of the year but the my crystal ball tells me the odds are very good we will see additional news hit the cycle on at least one of the three items mentioned above before year end.

The Irony of Avid Life Media passing legal threats on the internet is delicious

If Avid Life Media aka Ashley Madison used fake female profiles to lure men to paying for the service, such customers guaranteed to keep their mouths shut if they were not satisfied with the results who also had to pay $19.99 to leave Ashley Madison with a “full delete” service that itself appears to be a scam, at what point does the following come into play since Avid Life used the wires to conduct the business enterprise:

(1)“racketeering activity” means (A) any act or threat involving murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene matter, or dealing in a controlled substance or listed chemical (as defined in section 102 of the Controlled Substances Act), which is chargeable under State law and punishable by imprisonment for more than one year; (B) any act which is indictable under any of the following provisions of title 18, United States Code: Section 201 (relating to bribery), section 224 (relating to sports bribery), sections 471, 472, and 473 (relating to counterfeiting), section 659 (relating to theft from interstate shipment) if the act indictable under section 659 is felonious, section 664 (relating to embezzlement from pension and welfare funds), sections 891–894 (relating to extortionate credit transactions), section 1028 (relating to fraud and related activity in connection with identification documents), section 1029 (relating to fraud and related activity in connection with access devices), section 1084 (relating to the transmission of gambling information), section 1341 (relating to mail fraud), section 1343 (relating to wire fraud)………

Following the link to Wire Fraud, a predicate act under this statute reveals the following:

Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both.

You know folks, depending on how you look at the Ashley Madison hack, I could see an argument for the Impact Team being considered whistle blowers if the above is true.  Maybe the FBI needs to divide its Ashley Madison hack investigation in two and explore whether websites like Ashley Madison are a modern day version of a lonely heart scam that used to be perpetrated by old fashioned snail mail back in the day. Continue reading “The Irony of Avid Life Media passing legal threats on the internet is delicious”

Slabbed explores the almost completed Jackson County Adult Detention Center – Introduction

The last time Slabbed began chasing a lead that ended up uncovering a huge number of what I’ll term rabbit trails into the brier patch was the massive political corruption scandal in Jefferson Parish back in 2010. I mention this because earlier this year I received a tip which mentioned a significant ramp up of of FBI agents and resources in Mississippi with Jackson being ground zero. A few months later through a completely unrelated source and by happenstance I was able to confirm the first tip. The question to me then became one of the focus of the FBIs interests and we’ve been treated in the news to several tantalizing clues the most recent being our State Auditor according to the Clarion Ledger. I think we can piece several things together and arrive at a reasonable answer and to begin we start with a story today by Greg Gordon of McClatchy DC that appeared in today’s Sun Herald. Gordon’s presence on the scene is significant because he is the Sun Herald’s parent corp’s best financial fraud reporter and what appeared today makes a nice starting point for the coming Slabbed series on the construction of the Jackson County ADC:

In Waveland, federal auditors unnerved local officials by finding a contractor hired to build a temporary sewer system double-billed the city $811,000 for 379 pumps already covered by the contract and improperly charged $608,000 more for 290 more sewage-storage tanks that weren’t part of the agreement.

And who was this contractor?

Waveland’s predicament, however, underscores a central reality for watchdogs who have sought to ensure the fair and efficient expenditures of tax dollars: In Mississippi, one of the nation’s poorest states, most jurisdictions lack the money to repay questioned costs.

“There’s no way, practically, for (the city) to repay that money,” said Gary Yarborough, Waveland’s city attorney. The city’s population has dropped from 8,000 to about 6,000, and its fiscal year budget is $4.2 million, he said.

City officials told federal examiners they’d alerted state auditors years ago that the firm contracted to build the sewage system, Hemphill Construction Co. of Florence, had overcharged for the project. But FEMA has so far chosen to pursue the city rather than the company, Yarborough said.

Waveland’s appeal for relief from FEMA is pending. Hemphill’s president, Richard Rula, did not respond to a phone message.

Hemphill was ubiquitous in Hancock County in the years after the storm and there are reasons for that. The section of Central Avenue in Waveland between Coleman Avenue and Nicholson occasionally makes me question whether the company should have been in the road and infrastructure rebuilding business at all. At the end of the day the companies that seemingly came out of nowhere after the Hurricane to nab rebuild contracts traces to an old political feud between then Senator Trent Lott and then Prez Geroge Bush. Jeb Bush was Florida’s governor at the time. With the political players set lets hit the way back machine and set the dial for April 2006 and Bloomberg Business Magazine: Continue reading “Slabbed explores the almost completed Jackson County Adult Detention Center – Introduction”

Jackson and Mayberry by the Sea have something in common

Through time I’ve learned to trust my instincts and watch certain indicators when it comes to happenings in the investigative community. I’ve also made several connections that include high quality people that know many other high quality people. I’d be more specific about sourcing but that would destroy the magic.

Several months back I ran a post about the City of Jackson, Siemens and Mayor Tony Yarber which highlighted a Jackson Free Press story on Mayor Yarber being questioned by the FBI, an assertion which Mayor Yarber denied. I can’t say who has spoken with whom in Jackson but I can say I’ve confirmed through my own sources that the FBI is looking at the City and the Siemens contract. The rumors surrounding that investigation are about as numerous as the ones involving HCUA so this is no major revelation but the journalism community likes confirmation, especially when it comes from sources that were not previously aware of the Jackson Free Press story or the identity of the Mayor of Jackson for that matter.

Moving right along to here in Mayberry by the Sea, news of the presence of the FBI is not necessarily a bombshell as there had been previous sightings of the G-men at the County annex within the past three years. I can’t be very specific but I will say the latest rumors here do not involve the FBI visiting the County Annex. I have the possibilities narrowed to two but I’ll decline the chance to publicly speculate on those possibilities as things are not yet completely clear. That said I have reason to believe it is connected to issues previously reported on by Slabbed New Media.

Stay tuned.

Comment bumps from Jackson County. The truth is likely very ugly

Slabbed literally has lifers that go back way far back but there are just a handful that were there for the prequel, Nowdy being in that number. As I watch the Singing River Health System disaster unfold I’m reminded of old business because I’m seeing it connect in certain ways to that which is now before us. And at the bottom are the vested participants in the plan.

I think the commenters are making a case that the Jackson County Board of Supervisors is stalling for time to avoid revealing the truth because the truth in this instance is very ugly. Anyone that can read a financial statement can see how bad it is when it is adjusted for the fraudulent financial reporting related to patient receivables. When you adjust the numbers and run rudimentary financial analysis, the tax increase needed to honor the promises made to the vested plan participants would be staggering.

There are other options. I have colleagues that have suggested to me that privatizing the two hospitals under one operator would be the better option, a process Jefferson Parish Louisiana is currently concluding with the larger of its two public hospitals.

Given the history of the SRHS saga the commenting community here at Slabbed are rightfully skeptical.  Here is a sampling:

Legal Community battles are always down and dirty. Commenter R. Scruggs lays down brass tacks and smack on “Thursday SRHS Miscellany: Public hospital to comply with Open Meetings bill passes the Senate, plus a court hearing.

Simple Man understands the truth is likely to be very ugly on “SRHS Retirees Protest through the Mardi Gras Holiday plus Judge Harris is on the case to stay (Updated)” after Observer worked the math.

Liars and Crooks are easily spotted……

It is a long interview and there is copious amounts of BS early on when SRHS CEO Kevin Holland tries covering for his predecessor but overall Doug and Dave did a good job honing in the real issues at play on News Watch This Week. Most interesting is Holland tacitly admits that SRHS chose construction projects over honoring its promises to its retirees.

WLOX.com – The News for South Mississippi
Continue reading “Liars and Crooks are easily spotted……”

Comment bump: SRHS Board Trustee Allen Cronier claims Homestead exemption in both Mississippi and Alabama

Figuring out where these cats live and vote is the ultimate game of whack a mole. Commenter Pravda once again has the skinny.  I have since seen pictures of Cronier’s Grand Bay Alabama residence.  Nice digs.

If they’re not already out of the station-house and onsite, my personal opinion is Colleen and the rest of the bean squad could have a field day doing some forensic accounting over Pascagoula way.