Pastor arrested in bogus billing scheme

An Apalachicola pastor and former sheriff’s deputy was arrested Monday on 43 grand theft charges related to an alleged bogus billing scheme during construction of the consolidated school.

Leonard Martin, 48, turned himself in to the Franklin County Jail and was released on a $2,500 bond issued with the warrant by Circuit Judge James Hankinson.

State investigators allege Martin’s security and temporary employment companies engineered the theft of nearly $1 million as a subcontractor during construction in 2007 and 2008 of the $45 million consolidated Franklin County School.

Martin, who retired from the sheriff’s office on Dec. 31, 2005, serves as co-pastor, together with his wife, of the Love & Worship Center, one of Apalachicola’s largest and most active churches.

The state Department of Law Enforcement also charged Martin’s former office manager, Lane Nicole Wood, 28, of Tallahassee, and her ex-husband, Casey Kelley, 32, of Wewahitchka.

Kelley was project manager for Peter R. Brown Construction (PRBC) on the consolidated school from Sept. 2006 until he was fired in April 2008.

Both Wood and Kelley were booked into the Leon County Jail and released Tuesday.

Martin, Wood and Kelley each have been charged with 12 second-degree felonies and 30 third-degree felonies in connection with what the Florida Department of Law Enforcement said were $817,000 in work on the new school billed to PRBC but never completed.

The billings relied on falsified timesheets submitted by Purity Temporary Employment, another of Martin’s companies, according to the FDLE.

In addition, Martin and Kelley have each been charged with a single first-degree felony count, in connection with the billing of a $130,000 security system that was never installed by Martin Security.

First signs of trouble

Problems with overcharges first surfaced in April 2008, when PRBC repaid the Franklin County school district $130,583 in overcharges company officials said came from an unnamed employee “who intentionally falsified billing documents.”

A subsequent forensic audit concluded that the school district had suffered no further financial losses, and these findings were turned over to the state attorney, and then to FDLE, in Feb. 2009.

According to the FDLE’s probable cause affidavit, PRBC began investigating possible misappropriation of funds on March 24, 2008, when Scott Brewer, PRBC’S vice president of operations, examined invoices for temporary labor being paid to Purity.

On March 31, 2008, Kelley told Brewer he had been arrested on drunk driving charges in Wakulla County a few weeks prior, and feared losing his driving privileges. In a later Sept 2009 interview with FDLE agents, Kelley said he had become an alcoholic and addicted to Xanax during these months.

As PRBC officials weighed Kelley’s possible dismissal, a suspicious check issued to Purity surfaced, leading to a company investigation that indicated timesheets for Purity employees appeared falsified.

FDLE investigators said that on April 7, 2008, Kelley told John Stewart, executive vice president of PRBC’s Tallahassee office, that he had created fraudulent timesheets and backup documentation, and forged signatures, for Purity employees. Kelley said that he had split the money with Martin for what PRBC deemed “self-perform” work, and that no funds were stolen from the consolidated school account, FDLE reported.

“No one other than he and I are involved,” Kelley told investigators.

Kelley said Purity was picked in March 2007 to replace Action Labor as a source for temporary employees because it looked good to have local employees working on the job site. While some employees from Action Labor then moved over to Purity, Kelley said that within a month they switched back because Purity lacked the proper insurance.

According to the FDLE affidavit, Kelley said Wood, his then-girlfriend whom he later married in July 2007, told him Martin came up with the idea to create fictitious invoices. Kelley said he weighed the plan for about two weeks, and then met with Martin in his office at the church to discuss the details. The two decided on an even split of the proceeds, “but that on occasions the split was 60-40 or even 80-20 depending who needed the money at the time,” Kelley told investigators.

Kelley told investigators on numerous occasions the checks he received from Purity for his share were returned due to insufficient funds, but that Martin ultimately made good on them.

District assured all financial losses made good

After subpoenaing the companies’ bank statements, investigators determined Purity received 42 checks from PRBC for 63 invoices, totaling $817,772, and that Martin Security received a check for $130,584. Martin’s two companies in turn issued Kelley 32 checks, totaling $541,268, according to the FDLE.

In his Jan. 12, 2010 interview with FDLE agents, Martin said Kelley asked him to employ Wood, who at the time worked for PRBC, because they had been caught together by one of the company’s vice presidents. She was hired as office manager at $9 an hour.

Martin said his security firm placed a $2,200 security system on the PRBC construction trailer, but got no further work from the construction project until Kelley suggested that billings for temporary employees go through Purity.

FDLE investigators said Martin claimed Kelley told him he would supply the employees through a Tallahassee company of which Kelley was part owner. PRBC was then billed by Purity at $18 per hour for each employee.

“Martin tried to stress that because he had met with Peter Brown, and that Brown’s company wanted to use local labor that everything they were doing was legitimate,” wrote the investigators, noting that Martin advised that he never signed the fictitious invoices.

Martin told investigators he estimated he made between $380,000 and $390,000 for “work that his company didn’t provide over a 10- or 11-month period which was mostly in 2007.

Investigators wrote that “Martin advised that he constantly asked Kelley if this was legitimate and that Kelley always assured him that it was,”

School Board Chairman Jimmy Gander said the district believes PRBC has fully satisfied any losses sustained by the district in the matter.

“That was my main concern, “How far could this go?” said Gander. “After we did a forensic audit, instead of depending on Peter Brown, we were breaking down invoices. We couldn’t find anything else and I have to think if there were others involved, these people would be blowing whistles, and be making accusations.

“They had the wrong guy on the job, that’s about all you can say,” said Gander.