Fairbanks Alaska 3 Term Mayor Found Guilty – Conspiracy, Theft, Money Laundering and False Tax Returns – The Rest of His Life In Prison?

After deliberating five days a Fairbanks, Alaska jury gave James C. Hayes, age 62, a valentines day gift he won’t forget – A GUILTY VERDICT – on 16 counts of Conspiracy, Theft from a Program Receiving Federal Funds, Money Laundering and Filing False Tax Returns.

Hayes and his wife, Murilda “Chris” Hayes were indicted on charges that they illegally diverted government funds awarded to a Fairbanks charitable organization created to aid disadvantaged Fairbanks youth. The funds were diverted for their personal use and to pay for the construction and furnishing of a Fairbanks church with which they were associated. The indictment further alleged that they committed numerous acts of money laundering to conceal the source of the diverted funds.

According to evidence presented in court, Chris Hayes was the executive director of Love Social Services Center (LSSC), a charitable organization, set up to provide social and educational services to low income and disadvantaged youth in the Fairbanks community. Jim Hayes, her husband and the pastor of Lily of the Valley Church of God in Christ (LOVCOGIC), was also a board member of LSSC. Between 2001 and 2005, LSSC received over 2.7 million dollars in government grants from the Department of Housing and Urban Development and the Department of Justice Office of Juvenile Programs. LSSC used the original grant money to purchase the old LOVCOGIC church building. LOVCOGIC then built a new and larger church across the street from its old location.

When the cost of construction for LOVCOGIC’s new church exceeded its sources of funding, Chris Hayes and Jim Hayes illegally diverted LSSC government grant funds to pay construction bills and provide furnishings and operating expenses for the new church. The Hayes used the government funds to pay for personal bills and expenditures such as a plasma t.v. for their home, a family wedding reception, credit card bills and old debts, and other personal items. Chris Hayes concealed the source of the above payments by causing the charity to write checks to cash that she then converted to money orders and cashier’s checks to make the illegal payments.

The law provides the maximum penalty for each count of misapplication of government funds is ten years and a $250,000 fine, and the maximum penalty for the each of the money laundering charges is 20 years imprisonment and a fine of either $500,000 or twice the amount of the laundered funds. The maximum penalty for conspiracy is five years imprisonment, a $250,000 fine, or both and the maximum penalty for filing a false tax return is three years imprisonment and a $250,000 fine.

It says in the Bible – You reap what you sow. Now you would think that a church pastor would know that! But, speaking from experience, it seems that even those of us who are sane and competent, sometimes lose our minds when it comes to fraud. Three things need to exist for true fraud to take place – need, opportunity and rationalization. Those elements create the perfect storm. But with every storm there is destruction that follows. It seems here that Jim Hayes is just now facing the destruction of his actions.

Every choice has a consequence and as a business ethics speaker, (www.chuckgallagher.com) I speak nationally on the topics of ethics, choices and consequence. In fact, I share the truth about consequences. If you would like to know more or have a comment on this story – I would welcome your input.

Business ethics and white collar crime speaker – Chuck Gallagher – signing off…

Former College President Charged with Obstruction of Justice – It Just Doesn’t Pay To Lie Says Ethics Speaker Chuck Gallagher

In practically every presentation I make I remind the audience that every choice has a consequence. (www.chuckgallagher.com) In this case, Joanne Jordan, age 66, recently interim President from 2002 through 2006 for Southern Union State Community College, Alabama, has been charged with obstruction of justice due to false testimony she gave to a grand jury.

Unless I’m missing it, this is almost the same thing Martha Stewart went to prison for – lying! As stated in the US Attorney’s news release – “Lesson for the day – do not lie to a federal grand jury.” The release indicates the following:

While JORDAN served as the interim President of SUSCC, then Chancellor Roy Johnson devised a plan to facilitate the retirement of SUSCC’s Dean of Nursing (Dean). Johnson had promoted the Dean to that position when he was President of SUSCC and he had a close relationship with her.

When JORDAN became interim President, the Dean approached JORDAN and stated that she would be willing to retire immediately, but could not do so unless “some service time” was bought from a previous job. The Dean told JORDAN, and JORDAN told Chancellor Johnson, that, if SUSCC would pay the cost of purchasing the time, she would retire and leave the campus. The cost of the Dean’s service time was approximately $24,000.

In order to facilitate the Dean’s retirement and exit from SUSCC, Johnson instructed Winston Hayes, the owner of ACCESS – a computer software vendor, to pay for the Dean’s service time. Johnson instructed Hayes submit a false invoice to SUSCC to cover the costs, and then Johnson instructed JORDAN to pay the false invoice.

When JORDAN received the fraudulent invoice from ACCESS, it was more than twice as much as the Dean’s service time had cost, so she contacted Johnson. He instructed Jordan to pay the fraudulent invoice, and to certify that software had been delivered. ACCESS Group Software, LLC received a check for $48,000 from SUSCC. Hayes used the excess money paid his company, ACCESS, to benefit himself and Johnson, with whom he was engaged in a bribery-kickback scheme. When asked in the grand jury whether the Chancellor had told her to pay a fraudulent invoice, JORDAN testified, falsely, that he had not.

Winston Hayes, owner of ACCESS Group Software, LLC has previously been charged in connection with this investigation, and has agreed to plead guilty to bribery and conspiracy to launder money. ACCESS will forfeit $5 million received as profit over the course of four years of illegal activity relating to the Postsecondary colleges.

Johnson has previously been charged with 15 counts of conspiracy to commit bribery, bribery, obstruction, witness tampering and conspiracy to commit money laundering. He has agreed to plead guilty and to forfeit approximately $18 million for his illegal activity relating to the Postsecondary colleges.

JORDAN also admits, in her Plea Agreement, that from April 2004 until November 2005, while she served as interim President of SUSCC, she received free architectural services from an architect who did business with SUSCC. After learning of the federal investigation, JORDAN paid the architect approximately $3500 for services rendered to her.

JORDAN further admits that at Johnson’s direction, from December 2003 through May 2006, she hired Johnson’s son-in-law, an attorney, and paid him approximately $2000 per month for a total of $58,000. When questioned before the grand jury about why she had hired Chancellor Johnson’s son-in-law, Jordan testified falsely that she had done so own her own initiative without direction from the Chancellor.

My, what a tangled web we weave. Now, so there is no confusion – I am not passing judgment here. I, too, wove a tangled web and the consequences that followed – federal prison. I am not proud of that fact, but one can make lemonade out of lemons. Just like bad choices have a negative consequence – every time – good choices can have positive results. Unfortunately, in this case, the negative consequences of Jordan’s choices are just now beginning to surface.

The penalty for obstruction of justice in federal court is not more than ten years in prison, fines of $250,000, or both. “Investigations of this type are extremely difficult and complicated, and are made even more so when individuals deliberately attempt to hide the truth,” stated Richard Minor, Acting Alabama Attorney General. “Nobody is above the law including Ms. Jordan, a former college president.”