A Mississippi preacher deprived poor people of government money because he preferred to use it to enrich himself, federal prosecutors said.
Rev. Kenneth Fairley, pastor of Mt. Carmel Baptist Church in Hattiesburg, Mississippi, allegedly profited after the federal Department of Housing and Urban Development gave $47,000 to the local government, which gave it, in turn, to a nonprofit called Pinebelt Community Services to renovate houses.
HUD has relationships with many such nonprofits that often function as expensive middlemen between government aid programs and those in need of help.
In Fairley’s case, Pinebelt had no capacity to do construction and told the city it had handed off the money yet again via a contract with a New Orleans company called Interurban Development. But Fairley had arranged with Interurban’s owner to make the hand-off an on-paper-only arrangement at an inflated price.
In reality, local people did the work for far less money, and Fairley kept the rest for himself, according to an investigation by the HUD inspector general.
Prosecutors charged Fairley with conspiracy to defraud the United States and money laundering. He pleaded not guilty.
HUD does little vetting of the middleman nonprofits to which it awards millions of tax dollars annually.
In Baltimore, for example, it has funneled millions through a nonprofit called Enterprise Community Partners to pass it on to neighborhoods. But instead, its CEO makes $577,000 and it has 48 officers who were paid $267,000 on overage.
Only half of its money actually made it to neighborhoods that needed it and no positive results have been demonstrated.
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