Magnolia Group sues over Bay Tech Building Swindle

And I am already hearing rumors additional defendants will be added to the suit. The Bay Waveland School Board, in my opinion, has wholly failed to properly discharge their fiduciary duty to the taxpayers and voters of Hancock County and if this litigation begins consuming tax dollars meant for education, Slabbed New Media will not be kind to the perpetrators. Click the pic to nab the PDF:

Magnolia Group v O'Dwyer et al Doc 1

I see from Pacer Magistrate Roper has recused himself from this case. It took me a few seconds to figure out the likely reason, which I will not share, but I will say Magistrate Roper is known as a straight shooter that calls his cases down the middle and he was absolutely right to stand down here IMHO. Continue reading “Magnolia Group sues over Bay Tech Building Swindle”

DMR Scandal Day 88: Screwing the pooch starring Billy Walker, the FBI and the Chipper

Yesterday Karen Nelson added some color to the unfolding federal investigation into the DMR friends and family program disclosing a few things, one of which we knew in a general sense and one that we did not know. First off is the factoid we did not know:

The Director of the Land Trust for the Coastal Plain, Judy Steckler, appears to have a problem telling the truth about the Land Trust’s involvement as a financial intermediary in the DMR purchase of Former DMR Executive Director Bill Walker’s son Scott’s piece of land on Bayou Porteaux.  Once known as a nonprofit with a sterling reputation the Land Trust has taking a major and well deserved beating for their role in what strongly appears to be a sophisticated, criminal enterprise.  After yesterday’s story I do not see how the Land Trust can keep Ms. Steckler as its executive director but as we saw with the CMR it is possible the Board of Trustees of the Land Trust remains firmly in denial, in the process breaching their fiduciary duty to the organization.

Finally Nelson tells us in detail the FBI’s role in the investigation and one of the leads they are chasing using the same investigative technique the FBI used in the neighborhood canvas.  It appears Bill Walker’s son Scott may need fabled beltway criminal defense attorney Bernie Grimm’s services again as the FBI has taken an interest in the DMR’s purchase of Walker’s lot.  It is not much of a stretch to extrapolate that CIAP director Tina Shumate and her purchase of her parent’s property is also under the same scrutiny.  How Shumate remains at DMR drawing a paycheck defies the imagination.

Next up Michael Newsom takes a stab at the DMR purchase of the old Winn Dixie property in the Pass.  A couple of things stuck out at me the first being that the story photo appears to be the property across the street from the parcel purchased by DMR. Following is an aerial photo of the location with the slab and parking lot of the old Winn Dixie still visible.

Harrison Co Tax Map DMR Winn Dixie Property
Arial photo of the old Pass Winn Dixie property and the lot across Henderson Ave. Source: Harrison County Tax Assessor Online Tax Maps

We’ve been here and done this property on Slabbed way back on November 5 of last year. The Sun Herald protected the identity of the beneficiary of this DMR friends and family program purchase, Jackson based developer Gary Cress in their story. I well remember when the Pass Winn Dixie closed a month or so before Katrina. Cress was planning to develop the parcel into condos. The parcel across Henderson Avenue sold the summer before Hurricane Katrina for $800,000 with an eye toward the same purpose.

The $800,000 parcel on the right, over 3 acres of land, is lower in elevation than the Cress parcel and had never been developed since Hurricane Camille for that reason.  It would seem to fit the DMR criteria for land purchases better than the old Winn Dixie site. It should also be lost on no one that land values on the Mississippi Coast reached their zenith that summer before Katrina as condomania swept the land.  Today the parcel on the right is for sale by owner and I’m guessing the reason it has not sold, despite being on the market close to 7 years, is due to overvaluation associated with the original purchase in the summer of 2005. Continue reading “DMR Scandal Day 88: Screwing the pooch starring Billy Walker, the FBI and the Chipper”

Let’s drill down on the OIG report on DMR’s friends and family program to expose fatal flaws in the appraisals obtained by the Bay Waveland School District in the Bay Tech Building Scandal

Let’s use some excerpts of the OIG report on DMR’s land acquisitions to illustrate why the taxpayer paid appraisals obtained by the Bay Waveland School Board as cover for their friends and family program are not worth the paper they are written on. First up we need to know what the OIG auditors did and they well explain it:

You see folks, the auditors may have had specific information that DMR Director Bill Walker and his assistant Tina Shumate were looting the program for their personal gain but going in blank they would have noticed a ton of red flags. Preliminary procedures would include comparing the real estate valuations (appraisals) against tax roll appraised values. Drilling down into the appraisal report themselves for those transactions that had large variances would include evaluating the appraiser’s work product against professional standards in the field. The OIG was kind enough to identify for us 15 requirements and best practices and summarize how each DMR transaction failed at least 4 of those 15 best practices/requirements: Continue reading “Let’s drill down on the OIG report on DMR’s friends and family program to expose fatal flaws in the appraisals obtained by the Bay Waveland School District in the Bay Tech Building Scandal”

Office of Inspector General report on the DMR friends and family program lends insight into the flawed appraisals obtained in the Bay Tech Building Scandal

I have a series of posts coming on the family and friends programs at both the DMR and the Bay-Waveland School District so today I begin with that preliminary US Department of the Interior Office of the Inspector General report on the problems at DMR.  The twist is that I’m going to use that report to highlight the inherently flawed purchase of the Bay Tech Building by the Bay-Waveland School Board. In this series of posts I’m completely in my field of expertise as an auditor and hopefully I’ll set off a few light bulbs.  First let’s do a quick review on the OIG report on the DMR family and friends program aka CIAP.

The DMR scandal broke on October 25 with reporting by the Sun Herald the Investigative Division of the Office of the State Auditor were at the Bolton Building in Biloxi going through Director Bill Walker’s office.  The story that came from officialdom was that investigators were following up on a somewhat routine US DOI OIG audit of the Coastal Impact Assistance Program that found major problems in how DMR was running the program.  The OIG audit, an unusual occurrence absent a major wasting of tax dollars or suspected criminal activity, was described in different terms by the folks at State Auditor’s office that claimed it was because the federal agency administering the program was changing.  I do not believe that for a second personally as I firmly believe a dime was dropped. (I’ll explain more on that next week)

In any event the folks at the various OIG offices are auditors and since I’m an auditor by trade with a bit of practical experience let’s recreate some of the events through the eyes of an auditor.

First thing we have to do is figure out exactly what in the heck were looking at because the folks at OIG are not walking encyclopedias of compliance requirements related to the thousands of federal programs out there but luckily for us we have the internet so my first stop would be “The Catalog” aka the Catalog of Federal Domestic Assistance, specifically CFDA #15.426 Coastal Impact Assistance Program and a close second would be the enabling legislation, which contains this: Continue reading “Office of Inspector General report on the DMR friends and family program lends insight into the flawed appraisals obtained in the Bay Tech Building Scandal”