MyrtleBeachOnline.com: Investigating Five Rivers

New woe for Five Rivers

Sun, 30 Sep 2007 05:58 EDT

Five Rivers Community Development Corp. might have violated a federal law when it signed a contract promising to pay consultant Charles Clyburn a percentage of public money given to the nonprofit agency.

The contract between Five Rivers and Clyburn, the brother of U.S. Rep. James Clyburn, D-S.C., might have violated The Byrd Amendment, a law that prohibits using federal budget appropriations - also known as earmarks - to pay for lobbying efforts, said James Hudson, program director for the Center for Lobbying in the Public Interest.

The contract states that Charles Clyburn was expected to secure $1 million worth of earmarks for Five Rivers during an 18-month period by working with federal officials.

15 felony counts filed

Tue, 11 Sep 2007 17:11 EDT

GEORGETOWN | Beulah White and Dayo Smith, the mother and daughter who ran the Five Rivers Community Development Corp. nonprofit agency, were charged Wednesday with 15 felony counts of embezzlement, criminal conspiracy and breach of trust with fraudulent intent.

The 15th Circuit Solicitor's Office, which filed the charges, allowed White and Smith to turn themselves in to the Georgetown County Sheriff's Office shortly before noon Wednesday.

White and Smith were released from the Georgetown County Detention Center hours later after posting bonds totaling $150,000. White, the chief executive of Five Rivers, was charged with six felonies which carry a maximum prison sentence of 35 years. Her bond was set at $50,000.

Second lien filed against Five Rivers

Tue, 11 Sep 2007 17:14 EDT

The S.C. Department of Revenue filed a tax lien this week against Five Rivers Community Development Corp. in Georgetown, claiming the nonprofit agency failed to pay withholding taxes for its employees during the third quarter of 2006.

The tax lien, filed at the Georgetown County courthouse, is for $4,992.13. It covers the July through September 2006 period. It is the second tax lien filed against Five Rivers, which closed in November amid allegations of financial wrongdoing by its directors. The first tax lien, filed in March, is for $1,401.96 in employee withholding taxes the nonprofit failed to pay for the second quarter of 2006, according to Adrienne Fairwell, spokeswoman for the state's Department of Revenue.

Beulah White, executive director at Five Rivers, could not be reached for comment Thursday. The telephone number at her Georgetown home has been disconnected and there is no record of a new number.

Investigation of Five Rivers winding down

Tue, 11 Sep 2007 17:15 EDT

State and federal authorities say they are in the final stages of investigations into possible criminal activity at Five Rivers Community Development Corp. in Georgetown.

"We've essentially finished all of our document research and collection and we're down to the last few interviews,'' said Greg Hembree, solicitor for the state's 15th judicial district, which includes Horry and Georgetown counties. Five Rivers, a nonprofit agency that was supposed to help low-income people find jobs and buy homes, closed in November amid allegations of possible financial wrongdoing.

Beulah White, the agency's executive director, could not be reached for comment Monday. The telephone number at her Georgetown home has been disconnected.

5 Rivers officer defaults on loan

Wed, 11 Apr 2007 10:09 EDT

GEORGETOWN | Deutsche Bank has filed a foreclosure lawsuit against Ayoluwa Dayo Smith, former chief financial officer for Five Rivers Community Development Corp., saying Smith never made a payment on a $252,000 loan she received Nov. 8.

The Deutsche Bank loan is one of three refinance loans Smith took out against her home in The Arbors subdivision in the months before the Five Rivers nonprofit agency closed amid a financial scandal.

Tax lien placed on Five Rivers

Wed, 11 Apr 2007 10:09 EDT

The S.C. Department of Revenue has filed a tax lien against Five Rivers Community Development Corp. because the Georgetown-based nonprofit agency failed to pay employee withholding taxes last year.

The $1,401.96 tax lien is for employee withholding taxes that should have been paid in June, according to state Department of Revenue spokesman Danny Brazell.

Five Rivers losing land

Wed, 11 Apr 2007 10:09 EDT

The bank that gave Five Rivers Community Development Corp. money to buy land for a proposed community center is foreclosing on the property because the defunct nonprofit agency isn't making the mortgage payments.

BB&T filed a lawsuit last week in Georgetown County to foreclose on 3.03 acres of land Five Rivers bought in August 2003 near the intersection of U.S. 521 and U.S. 17 Alternate, commonly known as Nine Mile Curve.

Five Rivers misses deadline

Wed, 11 Apr 2007 10:09 EDT

Five Rivers Community Development Corp. has ignored the federal government's demand that it repay $418,180 in grant money the nonprofit agency misappropriated, forcing the U.S. Department of Housing and Urban Development to take tougher action to reclaim the funds.

"Despite our best efforts, Five Rivers has not responded to our request for repayment," HUD spokesman Brian Sullivan said Friday. "It has now become apparent that the department will explore other enforcement avenues to resolve this matter."

Board quit, but trouble persists

Wed, 11 Apr 2007 10:09 EDT

Five Rivers Community Development Corp.'s board of directors walked away from the troubled nonprofit agency with their resignations in October, but experts say their legal and financial responsibilities might not be over.

Those board members could face fines by the Internal Revenue Service if the tax agency holds them responsible for excessive salaries and misspent money at Five Rivers, a nonprofit agency that was supposed to provide job training and affordable housing for Georgetown County's low- to moderate-income residents.

Five Rivers' lobbyists unreported

Wed, 11 Apr 2007 10:09 EDT

Five Rivers Community Development Corp. spent $105,950 on two consultants who lobbied federal legislators for money and influence, but the nonprofit agency did not report those activities on its federal tax returns, according to a review of Georgetown-based Five Rivers' financial records by The Sun News.

Five Rivers paid $16,600 over 16 months in 2004 and 2005 to Charles Clyburn, the brother of U.S. Rep. James Clyburn, for consulting work.

Board not consulted on wages

Wed, 11 Apr 2007 10:09 EDT

One of Beulah White's daughters was on the payroll at Five Rivers Community Development Corp. for three years without the knowledge of the nonprofit's board of directors, according to interviews and a review of the agency's financial documents by The Sun News.

White, the nonprofit's executive director, and her children - Dayo Smith, Five Rivers' chief financial officer, Yegide Boyd and Atu White - received salaries, bonuses and other payments totaling $796,111 between 2001 and July, the most recent month for which financial documents are available.

Five Rivers must repay HUD funds

Wed, 11 Apr 2007 10:09 EDT

The U.S. Department of Housing and Urban Development has told Five Rivers Community Development Corp. that it must repay $418,180 from a grant the Georgetown-based nonprofit agency was supposed to use to help build a community center for low-income residents.

The community center never was built and Five Rivers now has until the end of this year to repay the money, according to a letter HUD sent on Nov. 30 to Dayo Smith, the nonprofit's chief financial officer.

Five Rivers closes down amid scandal

Wed, 11 Apr 2007 10:09 EDT

Five Rivers Community Development Corp. has closed its office and gone out of business, and it is not certain what will happen to the nonprofit agency's assets as the corporation is dissolved in the wake of a financial scandal.

Five Rivers' closing will not affect a criminal investigation of the agency by 15th Circuit Solicitor Greg Hembree. That investigation focuses on whether the nonprofit's executives misspent public money.

Five Rivers fails to supply spending log

Wed, 11 Apr 2007 10:09 EDT

Five Rivers Community Development Corp. missed the federal government's Sunday deadline to explain how it spent nearly $1 million in public money, and the U.S. Department of Housing and Urban Development wants to know why.

"We haven't received the requested source documentation yet," said HUD spokesman Brian Sullivan. "We're asking for an explanation."

Five Rivers barred from using HUD fund

Wed, 11 Apr 2007 10:09 EDT

Five Rivers Community Development Corp. no longer has access to $377,100 in federal grant money while the U.S. Department of Housing and Urban Development investigates the Georgetown nonprofit agency's finances.

Meanwhile, Five Rivers Executive Director Beulah White has sold at least two of the agency's four lots in the Lincolnshire subdivision. Those lots were supposed to be used for an affordable housing program.

3 Five Rivers board members leave posts

Wed, 11 Apr 2007 10:09 EDT

Three members of Five Rivers Community Development Corp.'s board of directors resigned from the agency Wednesday, saying the nonprofit's staff is spending public money and selling land without the board's approval.

It is not clear whether the agency's fourth board member, Marjorie Hemingway, has resigned. Hemingway could not be reached for comment Wednesday.

Five Rivers told to justify expenses

Wed, 11 Apr 2007 10:09 EDT

The federal government has given Five Rivers Community Development Corp. until the end of this month to explain how it spent nearly $1 million in public money, much of it set aside for construction of a community center in Georgetown County.

Five Rivers has told the U.S. Department of Housing and Urban Development that it is making progress toward building the community center, according to documents obtained by The Sun News.

Conflicts of interest at Five Rivers

Wed, 11 Apr 2007 10:09 EDT

A former board member for Five Rivers Community Development Corp. got her home financed through the nonprofit agency, another former board member received a personal tax break for selling land to the group and a third former board member is the executive director's son, according to a review of the agency's financial and property records by The Sun News.

Thirty-seven people have served on Five Rivers' board since 1997. Most of them were hand-picked by Beulah White, the agency's executive director.

Nonprofit's board requests audit

Wed, 11 Apr 2007 10:09 EDT

The board of directors for Five Rivers Community Development Corp. has asked an accountant and lawyer to help investigate the nonprofit agency's finances and operations, according to a statement the board released Friday.

The board also said it will reduce by half the salaries of Chief Executive Beulah White and Chief Financial Officer Dayo Smith, pending the results of the board's review.

Senator to seek criminal inquiry of nonprofit agency

Wed, 11 Apr 2007 10:09 EDT

State Sen. Ray Cleary said he will request a criminal investigation of Five Rivers Community Development Corp. to see whether public money has been misspent.

Cleary, R-Murrells Inlet, said his staff has drafted a letter requesting such an investigation and he plans to sign the letter and deliver it to 15th Circuit Solicitor Greg Hembree later this week.

Nonprofit withdraws land swap proposal

Wed, 11 Apr 2007 10:09 EDT

GEORGETOWN | Five Rivers Community Development Corp. has withdrawn its request to swap land with Georgetown County for a proposed training and retail center the nonprofit agency wants to build. Georgetown County Council on Tuesday unanimously tabled the land swap, which had been up for final approval. If the proposal is not revived at the council's Sept. 26 meeting, Five Rivers would have to go through the entire approval process again for any future plan involving the county. Beulah White, executive director of Five Rivers, requested the withdrawal in a Sept. 7 letter to council members. ``Thank you for your considerate support of our request relating to the property swap for our community/office facility,'' White wrote to the council members. ``We believe this would have been mutually beneficial to both parties and to our constituents. Respectfully, we are withdrawing our request.'' White's request came the same day The Sun News reported that some council members question whether Five Rivers has enough money to build the center. White did not attend Tuesday's meeting and could not be reached for comment. It now is uncertain what Five Rivers will do with 3.03 acres of land it owns near the intersection of U.S. 521 and U.S. 17 Alternate, commonly known as Nine Mile Curve. Five Rivers had wanted to swap that property for three acres of county-owned land adjacent to the Choppee Regional Resource Center on Choppee Road. Five Rivers also wanted to buy two acres of county-owned land at the Choppee site for about $18,000, giving the agency a total of five acres for its training and retail center. Five Rivers can't use the Nine Mile Curve site because the S.C. Department of Transportation will not give the agency an encroachment permit for construction. DOT officials plan to build a cloverleaf intersection near the Five Rivers land. The county could have used the Nine Mile Curve land because it would have access to the property from an adjacent fire station. County Councilman Johnny Morant made the motion Tuesday to table the proposal and County Councilwoman Helen Rudolph seconded. The council voted unanimously without any further discussion. Council members said last week they started questioning the project following an investigation by The Sun News that shows Five Rivers has spent most of the federal money the agency said it planned to use for the training and retail center. Furthermore, grants that the agency said would help pay for the project were never approved. In addition, the Federal Home Loan Bank in Atlanta has been wavering on its commitment to give a $600,000 loan to Five Rivers for the project, according to minutes of the Five Rivers board meetings. The bank wanted Five Rivers to nail down a specific site for the center, according to those minutes. It is not certain what will happen with that loan now that Five Rivers has withdrawn its proposal for the Choppee site. The U.S. Department of Housing and Urban Development confirmed last week that Five Rivers has withdrawn between $30,000 and $55,000 from its federal appropriations almost every month since December. Five Rivers' operating expenses average about $30,000 a month, according to the agency's financial statements. Those financial statements show Five Rivers is in a cash crunch, with $5,818 in grants and contributions through the first six months of 2006 compared with $187,453 in expenses for the period. As of June 16, the most recent date for which information is available, there was $377,100 left from $1.35 million the agency received from federal appropriations in 2003 and 2004. Five Rivers had said it planned to use those appropriations, also known as earmarks, to help build its training and retail center and pay for some of the agency's programs. A third appropriation, for $145,500, was approved in 2005, but that money can only be used to buy land for the center. Five Rivers has not spent that money. Five Rivers had planned to build a 14,000-square-foot center that would have office and classroom space for Five Rivers and four retail spaces for people who take part in the agency's business program. Five Rivers would make money by renting those spaces to business owners and by renting larger meeting space to community groups. Five Rivers is being investigated by the S.C. secretary of state's office for possible financial wrongdoing. Secretary of State Mark Hammond said that investigation is in the early stages and his office might forward information to the Internal Revenue Service for further review. Fifteenth Circuit Solicitor Greg Hembree said last week he thinks a criminal investigation of Five Rivers is imminent, although no agency has requested that his office check to see how the nonprofit agency has spent public money. About two-thirds of the $3.8 million Five Rivers has received since 1996 has come from local, state and federal grants funded by taxpayers. Nearly half of the agency's expenses since 1996 have been for salaries, fringe benefits, travel, health and automobile insurance for staff members, a Volvo automobile for White and other employee-related costs. Contact DAVID WREN at 626-0281 or dwren@thesunnews.com.

Prosecutor: Five Rivers probe likely

Wed, 11 Apr 2007 10:09 EDT

Fifteenth Circuit Solicitor Greg Hembree said Thursday he thinks a criminal investigation of Five Rivers Community Development Corp. is imminent, although no agency has requested that his office check to see how the nonprofit agency has spent public money.

"Quite frankly, I've been waiting on the call," Hembree said. "Any time the use of public money is questionable, there's a good chance it will lead to an investigation."

Nonprofit's project in jeopardy

Wed, 11 Apr 2007 10:09 EDT

Five Rivers' withdrawals Investigating Five Rivers: Read the complete series

Members of Georgetown County's council and school board said Wednesday they question whether Five Rivers Community Development Corp. has the money to build a proposed training and retail center in Choppee, and that insufficient funding could derail the nonprofit agency's project. The U.S. Department of Housing and Urban Development confirmed Wednesday that Five Rivers has withdrawn between $30,000 and $55,000 from its federal budget appropriations almost every month since December. There is $377,100 left from $1.35 million the agency received.

Spending muddled, lavish at nonprofit

Wed, 11 Apr 2007 10:09 EDT

Five Rivers Community Development Corp. over the past 20 months has spent nearly half of the $1.35 million in federal budget appropriations the nonprofit agency received in 2003 and 2004.

That public money has been used to cover salaries, travel and other costs, according to a review of the agency's financial documents by The Sun News.

Agency's staff receives board's support

Wed, 11 Apr 2007 10:09 EDT

GEORGETOWN | The board of directors for Five Rivers Community Development Corp. gave its staff a unanimous vote of confidence on Tuesday following a 1½-hour closed meeting.

The meeting may have been in violation of the S.C. Freedom of Information Act.

Tax records omit Gullah tour income

Wed, 11 Apr 2007 10:09 EDT

Beulah White, executive director of Five Rivers Community Development Corp., used the nonprofit agency's money to help pay for a tour she operates that promotes Gullah culture although she did not claim revenue from that tour on Five Rivers' federal tax returns, according to a review of the agency's documents by The Sun News.

Nonprofit experts said Monday that might be a violation of federal tax laws.

Nonprofit leaders: Boards oft out of sync

Wed, 11 Apr 2007 10:09 EDT

FLORENCE - People who serve on the boards of nonprofit agencies often don't realize the financial responsibility and legal liability that goes with their positions, according to agency executives who met here Wednesday to talk about restoring the public's trust in nonprofits.

"If there's a problem within an organization, it's a board problem," said Neal Zimmerman, executive director of the Boys and Girls Clubs of the Pee Dee Area Inc. "Whether an organization lives or dies, it's not going to be the executive director or chief executive officer who's accountable. It's the board."

State to launch Five Rivers probe

Wed, 11 Apr 2007 10:09 EDT

The S.C. Secretary of State's office said Thursday it will investigate possible financial wrongdoing at Five Rivers Community Development Corp.

Also on Thursday, the president of the nonprofit agency's board of directors promised a complete review of the CDC's salaries, expenses and operating procedures.

Agency given $1.5 million in federal funds

Wed, 11 Apr 2007 10:09 EDT

U.S. Congressman James Clyburn set aside $145,500 in the federal budget in 2005 for a building his nephew's architecture firm planned to design for the Five Rivers Community Development Corp.

The building was never completed, although Five Rivers paid the architecture firm $69,653 for initial design work, according to Five Rivers' federal tax returns.

Nonprofit pay rises under little oversight

Wed, 11 Apr 2007 10:09 EDT

GEORGETOWN - Five Rivers Community Development Corp., a nonprofit agency in Georgetown County, has operated with little apparent board oversight while the executive director's salary nearly doubled in four years, according to a review of the agency's records by The Sun News.

Beulah White, who helped found Five Rivers and has served as its only executive director, received a 91 percent salary increase - to $83,039 from $43,500 - between 2000 and 2004, the most recent year for which data is available.