Fairley Trial: 5 witnesses take the stand, audio recordings played

Fairley Trial: 5 witnesses take the stand, audio recordings played
The trial of a Hub City pastor entered day two, and the government put on five witnesses all related to the investigation of defrauding the federal government through the Housing and Urban Development in Hattiesburg./Photo credit: WDAM

HATTIESBURG, MS (WDAM) - The trial of a Hub City pastor entered day two, and the government put on five witnesses all related to the investigation of defrauding the federal government through the Housing and Urban Development in Hattiesburg.

First Witness:

Andrew Ellard, a former city of Hattiesburg employee who worked in the city's state and federal program's office, continued his testimony Wednesday.

He testified about checks from the city of Hattiesburg to Kenneth Fairley's organization, Pinebelt Community Services (Pinebelt), which included checks for $46,703.50 and $51,296.50.

Ellard said he was made aware that HUD was requesting information in the case in the spring of 2012.

Ellard also testified to the failure to cooperate from Pinebelt officials when it came to handing over documents.

"It would take long to get things together, not immediately, but routine things would take time or other requests," Ellard said. "I don't know that we thought money was being stolen."

According to Ellard, the city got one lump sum request once Pinebelt said all the work was done.

Second Witness:

Frank Mason, a former HUD employee who retired after 27 years with the government, testified about HUD dealings with Pinebelt.

Mason said that Pinebelt was designated by the city of Hattiesburg as a Community Housing Development Organizations (CHDO).

"The city is responsible for overseeing it… that burden falls on the city, none of HUD," Mason said.

Mason said the contract signed between Artie Fletcher's Interurban Development and Pinebelt Community Services, a nonprofit led by Fairley, was unlike nothing he had seen in 27 years.

"When I got the documents it raised a lot of questions, the documents were incomplete," Mason said.

Mason explained things were missing like bids, forms and multiple items that should all be listed were nowhere to be found.

"I made a series of inquiries for the bids, when I got the documents, there were no bid documents, who did you let the bid to, it seemed it was a conversation between two parties," Mason said. "It just seemed like a handshake, like this is what I want you to do."

Mason said he continued to request documentation, and ultimately sent the request up the chain to his supervisors, and then was given the approval to contact Mayor Johnny DuPree directly.

"Based on the documents, I have to get them to pay the money back," Mason said. "We needed to get our money back and we needed to ensure we had it on record that the money was misspent."

HUD officials later ruled they had enough documents and did not demand repayment. Fairley's legal counsel pointed out a 2014 letter that he claims is the most important document in the case.

Mason said the letter does not prove the houses were built properly and said the investigation by the HUD Office of Inspector General continued after that.

"I'm still not satisfied today," Mason said.

Third Witness:

Randy Jordan, 69, of Hattiesburg retired in 2015 as an inspector for state and federal programs with the Hub City.

Jordan said he tried to help Pinebelt but they did not use his input regarding the homes at 127 E. 5th Street and 202 South Street.

Jordan testified to dozens of items that were wrong with both homes during an inspection.

He was questioned if Fairley ever asked him to pass the home inspection.

"Fairley never asked me to pass the inspection," Jordan said.

Jordan said he had trouble getting the East 5th Street home to pass due to the amount of issues, some including the heating and air system and the hand rails on the front porch.

"Mayor DuPree called a meeting with me and two or three other people and put me on the hot seat, Jordan said. "He told me in so many words to file the project out."

Jordan continued to describe the meeting.

"It really irritated me, I was worried about my job," Jordan said.

Jordan spoke of another property that was handled by Pinebelt and the city, but never disclosed the address; just that it was located by Mt. Carmel Baptist Church.

"It was 2014 when I recall that Ellard went with me to inspect the properties…, I felt intimidated from the first property, so I wanted a witness there," Jordan said. "I heard Mr. Fairley say I should retire…"

Fourth Witness:

The fourth witness to take the stand was Cassandra Davis, who works for HUD out of the Jackson, MS, office.

Over the past 14 years, she has been a financial analyst and has been employed by HUD for 25 years.

"I was asked to gather source documentation from Pinebelt and the city of Hattiesburg," Davis said.

She said multiple requests were made and then she was asked by her director, Donnetta McAdoo, to stop by Pinebelt since no documents were being provided.

Davis testified about a meeting that took place at Mt. Carmel where the missing documents were addressed.

"The city of Hattiesburg requested HUDs assistance in getting documents," Davis said. "It was not a good meeting, I got angry."

Davis said she asked one question and never got an answer.

"You can change my mind not with words, but with paper," Davis said to Fairley.

Davis testified that Fairley told her and then other people at the meeting that Pinebelt had no source documents.

Davis said roughly a month later, HUD got documents mostly made up of undated receipts and one or two invoices.

"Those documents were minimally acceptable," Davis said. "Every dollar of HUD money has to be accounted for."

On June 11, 2012, Davis went by the property at 127 East 5th Street, which was after the project should have been completed.

"When we approached the home (McAdoo) was extremely unhappy, and she called the city," Davis said. "It didn't look like any money had been spent on the home."

Fifth Witness:

The government's fifth witness called to the stand was Robert Weeks, an investigator for the HUD Office of Inspector General.

Weeks said he was made aware of the case when he was contacted by the FBI in reference to possible fraud that included Pinebelt.

The investigation showed up on agents' radar when Fletcher filed a civil complaint in Sept. 2013 in Forrest County against Fairley and Pinebelt.

"(From 2010 to 2012)...As part of the conspiracy, Fairley and Fletcher agreed for Fletcher to provide 'seed money' to Pine Belt Community Services (a HUD certified Community Housing Development Organization for the purpose of rehabilitating three Hattiesburg residences), given that the HUD agreement was a reimbursement contract and thus required Pine Belt to incur the costs of the project prior to receiving money from HUD. It was further a part of the conspiracy that Fletcher directed an individual known to the grand jury and associated with the Neighborhood Improvement and Community Education (NICE) Foundation, a non-profit organization based in New Orleans, to transfer the 'seed money' from a financial institution account under the control of NICE to entities controlled by Fairley," according to court records.

Weeks mentioned NICE Wednesday during his testimony clarifying that NICE was sending money to Fairley and Mt. Carmel Baptist Church.

In 2014, Weeks interviewed Fletcher, and on April 22, 2014, he met with his legal counsel and received a thumb drive with emails, audio recordings and other documents pertaining to the case.

Two of the audio recordings between Fairley and Fletcher were played during the trial Wednesday.

"At this time I have run out of patience," Fletcher said. "I don't want to fight with anyone, with a 25-year friendship"

Fletcher and Fairley continued to discuss the spending of $150,000 of Fletcher's money and multiple amounts that Fairley owed to Fletcher through the HUD houses, in which he was the assigned contractor.

"We were praying in September that the funds would come through," Fairley said. "I did whatever I needed to do to raise some funds."

The recording listed $60,000 that Fairley owes.

"Until you and I reach a deal, I am going to proceed relentlessly with this," Fletcher said in reference to moving forward with protecting his family's money. "If Pinebelt is not willing to give me the documents that they owe me $150,000, I have to get it one way or the other, from you, Johnny, the city, HUD or someplace."

From Fairley to Fletcher, Fairley claims he asked God if there is some sin in all of this.

"We have to find a way to clean this up," Fairley said. "I've been shuffling so much stuff around; I'm not in trickery with you Fletch."

Fairley could be heard breaking down on the recorded phone call.

"I don't want to get in the adversary with you, I can't afford to fight with you, I fight with everyone," Fairley said.

Fletcher said, "I have no choice but to take a strong blow at you."

The audio recordings will continue Thursday morning at 8:30 when the trial resumes.