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Former Buncombe County officials conspired to divert funds intended to create local jobs to horse-related ventures in Polk County and in Florida, drawing a federal grand jury indictment against one official, the U.S. Attorney’s Office for the Western District of North Carolina announced late Tuesday.
A federal grand jury in Asheville indicted former Buncombe County Commissioner Ellen Frost Tuesday on 11 charges related to the alleged scheme to sponsor equestrian activities with Buncombe County funds between 2014 and 2017, according to a federal statement.
With former County Manager Wanda Greene and several other high-level county employees already in trouble with federal authorities over a pattern of alleged financial misconduct, the indictment of a former commissioner includes an elected official in the federal dragnet publicly for the first time.
And it may not be the last.
Asked late Tuesday by Carolina Public Press whether Frost’s indictment brings the federal probe of Buncombe County to a conclusion and whether other current or former officials may be prosecuted for related activities, Lia Bantavani, a U.S. Attorney’s Office spokesperson, responded that the “investigation is ongoing.”
The statement announcing the indictment noted the connection to previous charges against Greene: “Wanda Greene previously pleaded guilty to public corruption and to other charges for unrelated schemes involving the misuse of county funds and is awaiting sentencing.”
Asked by CPP whether Greene’s cooperation with authorities had contributed to the information used to indict Frost, Bantavani said, “As reflected in the standard language of our plea agreements to which defendants agreed to, the (defendants) agree to cooperate fully. Unfortunately, I cannot comment beyond that.”
The grand jury indictment charges Frost with one count of conspiracy to commit federal program fraud, five counts of federal program fraud and five counts of mail fraud. U.S. Attorney Andrew Murray described her role in a scheme to “use more than $575,000 in Buncombe County funds to sponsor equestrian activities in North Carolina and Florida,” according to the statement from Murray’s office.
Frost’s attorney, Anthony Scheer of Charlotte, was quoted by WLOS of Asheville on Tuesday, saying that his client had been duped by Greene and did not intend to defraud taxpayers. “Looking backward and saying now that Ellen knew the sponsorship was illegal and conspired with Wanda to steal is 20/20 hindsight,” Scheer told WLOS. “It’s almost like turning a political beef over the sponsorship into a crime.”
The alleged scheme
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The funds in question had been allocated for economic development — to create jobs and increase the tax base in Buncombe County. Instead, “Frost conspired with (Greene) to execute a scheme to defraud the county,” the federal statement said.
Frost, a horse owner and equestrian enthusiast, thus stood to benefit personally, according to the federal statement.
The federal statement emphasized that the two facilities in question, the Tryon Equestrian Center in Polk County and the Palm Beach International Equestrian Center in South Florida, “were unaware of the criminal nature of the scheme.”
The scheme was concealed in part by associating the county-backed equestrian sponsorships with Asheville Regional Airport, despite the airport’s independence from the county, according to the federal statement. The alleged conspirators kept other commissioners in the dark about this particular scheme.
As a result of the scheme, Frost gained VIP access to the Tryon Center, including its buffet, alcohol selection and premium parking, the federal statement said.
According to the grand jury indictment, Frost repeatedly took advantage of this VIP access and invited guests along to events. The indictment also accuses Frost and Greene of traveling to Florida and enjoying similar VIP access there.
The indictment also accuses the pair of taking part in a trip to New York, ostensibly to tour an equine quarantine facility similar to one that could potentially be established in the Asheville area. Instead of seeing the facility, the two attended races at Saratoga Springs. Frost’s own horse was also stabled there during the trip, according to the federal statement.
The out-of-state trips cost nearly $9,000, for which the county reimbursed the officials, according to the federal statement.
If convicted on the fraud conspiracy charge, Frost could face up to five years in federal prison. Each federal program fraud charge would carry a 10-year maximum sentence, and the mail fraud charges could each result in 20 years in prison. If convicted on all charges and assigned to serve nonconcurrent sentences, Frost would face 155 years behind bars.
Some of the allegations in the indictment add up to a pattern of illegal and deceptive behavior aside from any possible criminal violations. According to the indictment, the alleged conspirators acted to spend economic development incentive funds without the public notice required by the state since a law change in 2015 and outside of proper open sessions of the county commissioners.
The indictment also noted that this appeared to violate a local ordinance in place since 1993 requiring full public notice and hearings before spending these funds.
Federal officials credited the State Bureau of Investigation as a co-investigative agency, along with the FBI and IRS, on the case.
It’s unclear whether the SBI could also be looking at additional state charges against Frost and others in the matter. The SBI did not respond to a request for comment from CPP prior to publication of this article.
While a federal indictment cannot address state charges, it noted that the alleged conspirators apparently also violated North Carolina and Buncombe County law, including improper receipt of gifts or favors.
The indictment text from the grand jury
Frost Indictment as Filed (PDF)
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