Guilty pleas likely in 5 Rivers: Court date in July suggests deal in nonprofit scandal

By David Wren

Jun. 11, 2008 (McClatchy-Tribune Regional News delivered by Newstex) -- The mother and daughter who ran the Five Rivers Community Development Corp. nonprofit agency here apparently have agreed to plead guilty to charges that they stole agency money that was supposed to be used to help low-income residents find jobs and buy homes.

That is because their next court appearance will take place on July 28, the first day of a new term of criminal court at the Georgetown County Courthouse.

The first day of a new term always is reserved to hear guilty pleas.

A jury for that term also is not scheduled to report until July 29, which means trials will not be held on the day Beulah White and her daughter, Dayo White, make their court appearance.

The guilty pleas would be part of a deal in which prosecutors will seek no more than a five-year prison term for Beulah White, the agency's executive director, and no more than a 10-year prison term for Dayo White, formerly Dayo Smith, who was the agency's chief financial officer.

The two women and their lawyers met with Greg Hembree, solicitor for the state's 15th judicial circuit, on Monday, the final day they could accept the plea bargains.

Neither Hembree nor lawyers representing the Whites would say this week whether the women accepted the plea agreements.

Hembree said the two women would be back in court on July 28, but he would not elaborate on the type of hearing that will be held.

The Whites were supposed to tell a judge on Monday whether they would accept the plea bargains. A new lawyer has been hired to help represent the women, however, and legal experts say additional time often is given to defendants in such situations.

Charlie Condon, a former S.C. attorney general, was hired last week to assist the Whites in their defense. His role in a plea bargain case likely would be to mitigate any sentence the Whites might receive.

The Whites also are represented by public defenders.

Condon did not return telephone messages left at his office this week. Lawyers are supposed to file court documents showing who they represent when they are added to a case, but Condon had not done that as of Tuesday.

Condon is being paid by American International Group Inc. (NYSE:AIG) , the company that provided a liability insurance policy for Five Rivers, Hembree said.

Such insurance policies typically cover nonprofit directors and officers in the event of civil litigation, but criminal acts usually are excluded.

"It would be very unusual for a policy to provide coverage in a case that involves fraud," said Andy Cooley, whose company provides insurance to nonprofits through the S.C. Association of Nonprofit Organizations. "Those policies aren't going to provide any kind of criminal defense."

It is not clear why AIG is paying Condon to help defend the Whites in a criminal matter. AIG spokesman Chris Winans did not return a telephone message Tuesday.

Under the plea bargains, a judge would have wide latitude to impose punishment that could include a suspended sentence, probation or prison.

The Whites also would be given an opportunity to provide mitigating evidence, such as witnesses testifying on their behalf, before a sentence is imposed.

Neither woman has a previous criminal record and their lawyers are expected to ask for leniency because Beulah White is the primary caregiver for her elderly father and Dayo White is the mother of two young children.

In addition to Condon's help, Beulah White is represented by public defender Reuben Goude and Dayo White is represented by public defender Eric Fox.

Goude declined to comment Tuesday and Fox did not return a telephone message left at his office.

Those lawyers were appointed last year after the Whites filed court documents stating that they could not afford legal help.

Beulah White said on her financial report that she has income of $303 per month from unemployment benefits and debts of $504 per month for her Lexus automobile.

Dayo White said on her financial report that she earns $14 an hour working part time for a temporary-help agency in Norcross, Ga. She reported debts of $500 per month for her Acura automobile.

Beulah White paid herself a salary of $84,223 and paid her daughter a salary of $52,955 in 2006, the last year they operated Five Rivers.

An investigation by The Sun News showed those salaries far exceeded salaries paid to executives at similar nonprofits in the state.

That investigation also showed most of the $5 million in state and federal grants and other funds Five Rivers received between 1995 and 2006 went to pay salaries, health and life insurance, travel, meals and other expenses that benefited Beulah White and her children.

The criminal charges filed in August stem from allegations that Beulah White used Five Rivers' credit card to buy more than $5,000 of merchandise from Home Depot (NYSE:HD) for her personal use, gave $8,000 of the nonprofit's money to friends as loans that were never repaid and used public money to publish a personal magazine.

Prosecutors say Dayo White took $42,900 from Five Rivers' bank account for personal expenses, used the nonprofit's credit cards to make at least $12,000 worth of personal purchases and used public money to buy a personal computer.

The U.S. Department of Housing and Urban Development also says the Whites misspent $418,180 from a grant that was supposed to be used to build a community center.

Beulah White has been charged with six felonies that carry a maximum prison sentence of 35 years. Dayo White has been charged with nine felonies that carry a maximum prison sentence of 60 years.

In addition to putting a cap on a possible prison sentence, the plea bargains would reduce the number of charges levied against each woman.

Contact DAVID WREN at 626-0281.

Newstex ID: KRTB-0119-25916109