USA Sees Problems in Million Women Money

"In fact, the BCC had no dedicated space within the WISOMMM facility. The entire WISOMMM facility was a multi-use property, small portions of which were devoted to BCC activities on occasion, as needed and if available."

Prosecutors say WISOMMM and Bey were "aided" in "misspending and mis-accounting" by defendant Davis, a former director of the East Orange Police Athletic League (EOPAL) and retired police officer.

In April 2006, WISOMMM paid EOPAL $4,050, which in turn compensated Davis, for nine "conflict resolution" workshops Davis was to conduct at BCC, according to the complaint.

It continues: "In fact, however, Davis billed WISOMMM $4,050.00 for a ten-day 'workshops and training' event whose attendees were 26 Bermudans and only about 15 EOPAL youth and staff.

"The Bermudans flew into Newark, and were taken to some cultural and sociological events, as well as to restaurants, the movies, an aquarium, shopping trips, a bowling alley, and a professional basketball game.

"Not only were these activities largely unrelated to the activities described in the BCC grant and provided primarily to non-local participants, but Davis was also separately compensated for conducting them.

"In about October 2006, the Bermuda government paid Davis' private corporation approximately $87,500 for 'consulting' with them on gang issues. This payment was apparently based at least in part on Davis' 'work' on the same 'workshops and training' for which he received compensation from WISOMMM via the BCC grant.

"On the second such occasion, WISOMMM paid Davis $20,000.00. The EOPAL invoiced $20,000 to BCC, but has not justified the payment of the $20,000 to Davis.

"Upon information and belief, Davis used some or all of the BCC funds he received to pay for various gifts and loans to EOPAL, including a June 19, 2006 loan of $13,000; a June 21, 2006 donation of $50,000; a September 28, 2006 loan of $27,900; a December 1, 2006 loan of $2,200; and a December 21, 2006 payment by Davis of a $13,000 tax lien on EOPAL property.

"Defendants WISOMMM and Bey have never explained or provided justification for these payments to Davis, or the exact nature of the relationship between Davis, WISOMMM and the EOPAL at the time of such payments.

"Davis was subsequently hired to be the principal of the WISOMMM charter school."

According to Bey's grant proposal, the BCC was "supposed to have two dedicated employees whose salaries were to be paid using grant funding," the complaint states.

But prosecutors say Bey simply added the titles of "Project Director" and "Program Coordinator" to two full-time employees of WISOMMM, a mother and daughter.

Despite their new titles, the mother and daughter spent most of their time working in the WISOMMM Childcare Center, while being paid salaries of $50,000 and $35,000, plus benefits, with grant funds, according to the complaint.

The mother, whose salary was $50,000, with medical and dental benefits, "continued to work nearly exclusively in her capacity as a WISOMMM childcare staffer," the complaint states.

"[The mother's] full salary was paid out of grant funds even though much of her day was spent working for or at WISOMMM's Childcare Center - typically from about 10:00 a.m. until school dismissal in the afternoon. ...

"[The mother] maintained a single filing cabinet with BCC-related documents, as well as several electronic BCC-related files or documents on her computer. These documents comprised the entirety of the BCC's administrative records."

Prosecutors say the mother left WISOMMM after "an angry confrontation" with Bey, who transferred $40,000 in grant money to cover WISOMMM's payroll and then transferred another $50,000 without informing the mother, who was nominally in control of the money.

The mother "was not replaced, and her functions were absorbed primarily by Bey. The residual of [the mother's] salary and benefits, since she was not replaced, should be accounted for and repaid," according to the complaint.

Prosecutors say WISOMMM also overcharged the BCC more than $3,000 for one year of insurance, and requested grant money for computer software that it never purchased.

Finally, prosecutors say: "Had plaintiffs received the accurate and complete reports required as conditions of the grant, they would have learned of defendants' various misappropriations and misuses of grant funds much earlier, and would have revoked and terminated the grant."

The USA seeks damages for violations of the False Claims Act, common law fraud, unjust enrichment, breach of fiduciary duty, breach of contract, payment by mistake and civil conspiracy.

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