Thursday, Mar. 22, 2007

Tax lien placed on Five Rivers

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.

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Interest fees will continue to be charged until the tax lien is paid, Brazell said. It is not clear what, if any, assets the defunct nonprofit agency has to pay the debt.

Brazell said the state could seize the money from Five Rivers' executives if the nonprofit doesn't have any assets.

Beulah White, the nonprofit's former executive director, could not be reached for comment.

The tax lien is not expected to affect foreclosure proceedings already under way against Five Rivers, which closed in November after a series of stories in The Sun News questioned the nonprofit's financial and management practices.

A Georgetown County judge is scheduled to sign an order today allowing BB&T to sell at auction 3.03 acres of land where Five Rivers said it wanted to build a community center.

Five Rivers never built a community center and failed to pay a $30,000 mortgage on the property, located near the intersection of U.S. 17-A. and U.S. 521, commonly known as Nine Mile Curve.

The land could be sold in a foreclosure auction at the county courthouse as early as May 7, said Richard Smith, a lawyer for BB&T.

Meanwhile, criminal investigations against Five Rivers' officers still are in the early stages.

The Office of Inspector General at the U.S. Department of Housing and Urban Development has ordered Five Rivers to repay $418,180 in federal grants that were misspent. HUD also might pursue criminal charges against White and her daughter, Dayo Smith, who was the nonprofit's financial director.

Each woman could face up to five years in prison and $250,000 fines if they are convicted of fraudulently using the HUD grant money. Each woman also could face civil fines of up to $10,000 and restitution of three times the amount of money the government says it lost.

Mike Zerega, a spokesman for HUD's inspector general, would not comment on Five Rivers. Zerega said the only time HUD comments on criminal investigations is when an indictment is issued.

A state criminal investigation of Five Rivers focuses on whether White, Smith and others misspent public money. The 15th Judicial Circuit Solicitor's Office still is gathering evidence in that investigation, according to Solicitor Greg Hembree.

The Sun News' reports showed that most of the $5 million Five Rivers received between 1995 and 2005 went to pay salaries, health and life insurance, travel, meals and other expenses that benefited White and her children.

The nonprofit, which got about two-thirds of its money from state and federal grants, was supposed to help low-income residents of Georgetown County find jobs and affordable homes.

Five Rivers went out of business in November, and state law calls for the nonprofit's assets to be distributed to similar agencies. However, Five Rivers' executives have failed to file the necessary dissolution papers with the S.C. Attorney General's office.

On the Web

Visit MyrtleBeachOnline.com to read the "Investigating Five Rivers" series.