Jackson Attorney Robert Gibbs and the Board of Directors for Downtown Jackson Partners defended Ben Allen in two reports attached to his motion to dismiss that was filed last week in Hinds County Circuit Court. A grand jury indicted the DJP Executive Director in March for ten counts of fraud and embezzlement. The Board hired Mr. Gibbs to conduct an investigation of the allegations made in the indictment. Mr. Gibbs and the Board said Mr. Allen was completely innocent and rebutted each count in the two reports. The reports are posted below. Copy of indictment. Some highlights of the reports are:
*Counts I, II, and III of the indictment charged Mr. Allen with transferring a 1988 Chevy pickup truck from DJP to himself. It is allegedly worth $3,500. The indictment also alleges that Mr. Allen spent $2,724 of DJP funds on repairs to the "embezzled 1989 Chevrolet pickup truck" that was the lawful property of DJP. It further states that Mr. Allen spent $1,810 for insurance and registration.
However, the resolution states that Mr. Allen
acting as President of DJP, transferred title to the 1988 Chevrolet pickup truck from the corporation to his name solely for the benefit and best interests of the DJP to save approximately $1,600 per year in insurance costs. In making such transfer, Mr. Allen did not embezzle or convert property of the corporation, as alleged in the indictment. Members of the Executive Committee, staff, and Block by Block personnel were aware of this transfer at the time it took place and the truck remained in the custody and possession of DJP at all times....Mr. Gibbs states that Ross & Yerger charged an annual premium of $2,000 for the truck. The Executive Committee approved the transfer of title from DJP to employee John Gomez in 2009. (p.18) Mr. Gomez included the truck on his insurance policy at a cost of $25 per month. DJP reimbursed Mr. Gomez through its accountant, BKD. The truck was later transferred to Mr. Allen since he carried a more comprehensive insurance policy. The transfers saved DJP $1,600 per year in insurance premiums. Mr. Gibbs states the truck is housed with all other DJP assets and "has never been kept at Mr. Allen's house..".
That any expenditures of funds of the corporation made or directed by Mr. Allen in connection with the truck.... were completely authorized under the by-laws and budget of the corporation. These expenses and reimbursements were known to the Executive Committee and accountants, and all sure actions by Mr. Allen are hereby ratified and affirmed by the Board...
Mr. Gibbs defends Mr. Allen as he argues Mr. Allen received no personal benefit from the transfer but instead assumed a "significant liability risk to save DJP money."
* The indictment charges in count IV that Mr. Allen converted to his "own use" $1,738 for payment of Mr. Allen and his wife's cell phone bills even though said phones were the "lawful property of Downtown Jackson Partners".
The Board states that the payments Mr. Allen reimbursed DJP for the monthly charges each and every month. The report states that the expenditures were "completely authorized" and that "the accountants for DJP received full reimbursement on a periodic basis from Mr. Allen during his employment." (KFnote: Will the records subpoenaed show the regular payments and did the D.A. subpoena them? Honest question. )
Mr. Gibbs defended this assertion in his report as he stated "DJP approved the line for Susie Allen with the understanding that Mr. Allen reimburse DJP. This was always done and none of othe money alleged in the indictment was converted by Mr. Allen."
* Count V states Mr. Allen converted $6,620 of DJP funds for his personal credit card. Count VI charges the defendant with converting an additional $38,372 of DJP funds for payment on another credit card.
"This simply is not correct" is the Board's reply to these two counts. It stated
the Board of Directors has satisfactory validation for every such charge made. In connection with his employment as President, Mr. Allen has maintained a credit card, identifying himself as the cardholder, used for the purpose of making corporate related charges. The credit card has been used by the entire staff, under Mr. Allen's control and oversight. It has been the responsibility of the corporation's staff to match credit card charges appearing on monthly statements with receipts, invoices, and electronic payments..... which are then submitted to BKD (accounting firm).Mr. Gibbs also claimed that DJP did not have a credit card for many years so Mr. Allen would make DJP-related charges on his credit card and then submit them to the board for reimbursement. Mr. Gibbs also alleged that many of the backup receipts were "stolen".
Based on the thorough investigation conducted and set forth in the memorandum, the Board of Directors hereby determines all such charges were business-related.... Mr. Allen promptly and properly reimbursed the corporation for any non-business charges when those were identified, or that he paid the credit card company directly. The Board has not found any instances where Mr. Allen converted or embezzled money as alleged in Counts 5 and 6 of the indictment....
*Now for the fun part. The indictment charges that Mr. Allen converted $86,000 of DJP funds for payment to Mayor Tony Yarber's inauguration gala. Count X charges Mr. Allen of violating campaign finance laws** by donating $86,000 in DJP funds to Mayor Yarber's inaugural gala. The Board states
none of the money given to the Gala belonged to DJP. The money was donated by third parties for the sole purpose of funding the Gala. This procedure was researched by Board Attorney Robert Gibbs and by accountants for BKD, who both provided the Board of Directors with legal and accounting opinions stating the procedure utilized was appropriate and legal...The resolution further states the $86,000 collected by DJP was spent for a gala, not a candidacy, election, or a political party.
The Board of Directors authorized that any funds given by third party businesses be "earmarked" for Mayor Yarber's gala. Mr. Allen did not devise this procedure; rather he acted on the advice of legal counsel and accountants. .......
Mr. Gibbs states that the Mayor's Inauguration Committee asked DJP to act as a "clearinghouse for donations" for the gala that was held in June 2014. Mr. Gibbs stated he and BKD researched the law and advised Mr. Allen that "such action" was legal (p.21) and thus not subject to the $1,000 campaign donation limit.
*Count VIII alleges Mr. Allen converted $40,136 in DJP funds for unauthorized donations and sponsorships. What does the Board say? The Board says
all monetary donations and sponsorships provided by DJP to various groups were authorized by and made in accordance with those expenditure categories provided in the budget and the audit, adopted by the Board of Directors...
Accordingly, all donations and sponsorships made or directed by Mr. Allen were made in-line with the purpose of DJP and hereby ratified and affirmed by the Board.
*Count IX accuses Mr. Allen of covering up the misuse of $65,745 in DJP funds for a "fraudulent business incubator program". The Board states the charge is "puzzling" as all such expenditures were "completely authorized by Board action".(p.7) It states the indictment wrongfully claims DJP is a governmental agency when it is in face a private non-profit corporation.
Ms. Laura Lamar signed the report in her capacity as Chairman of the Board of Directors for Downtown Jackson Partners.
*Mr. Gibbs also stated in his report: "In August 2014, Ben Allen and John Gomez discovered that Linda Brune had embezzled funds by forging corporate checks totaling more than $40,000. The crime was reported" to JPD and Trustmark. DJP sued Ms. Brune for the funds in Madison County where she resides. The case has not yet gone to trial. The Hinds County grand jury returned a "no bill" for Ms. Brune.
Ben Allen files motion to dismiss.
Indictment of Ben Allen
DJP Board supports Ben Allen
Deputy State Auditor & Investigator indicted.
DJP sues former secretary for alleged embezzlement.
Kingfish note: Will Jerry Mitchell report on the motion to dismiss and the two reports?
** § 97-13-15. Limitations on corporate contributions to political party or candidate.
It shall be unlawful for any corporation, incorporated company or incorporated association, by whatever name it may be known, incorporated or organized under the laws of this state, or doing business in this state, or for any servant, agent, employee or officer thereof, to give, donate, appropriate or furnish directly or indirectly, any money, security, funds or property of said corporation, incorporated company or incorporated association, in excess of One Thousand Dollars ($1,000.00) per calendar year for the purpose of aiding any political party or any candidate for any public office, or any candidate for any nomination for any public office of any political party, or to give, donate, appropriate or furnish, directly or indirectly, any money, security, funds or property of said corporation, incorporated company or association in excess of One Thousand Dollars ($1,000.00) to any committee or person as a contribution to the expense of any political party or any candidate, representative or committee of any political party or candidate for nomination by any political party, or any committee or other person acting in behalf of such candidate. The limit of One Thousand Dollars ($1,000.00) for contributions to political parties, candidates and committees or other persons acting in behalf of such candidates shall be an annual limitation applicable to each calendar year.