MURPHY — Cindy Palmer, once the director of Cherokee County’s Department of Social Services, pleaded guilty to one felony count of obstruction of justice on Tuesday as part of a plea agreement in which she will not receive an active sentence.
Palmer led the DSS office for multiple years while social workers used a document called a Custody and Visitation Agreement to remove children from their parents without court oversight.
In 2018, shortly after the courts learned of the forms, a judge said it was “not a valid legal document” while another invalidated all remaining CVAs, calling them “unlawful” and “the product of both actual and constructive fraud.”
Palmer’s guilty plea could also mean Cherokee County taxpayers — not the county’s insurer—must foot the bill for potentially tens of millions of dollars in civil judgments.
Cherokee County’s civil attorney admits the county removed children from parents this way as far back as 2009 in more than 30 instances, sometimes involving more than one child each.
Superior Court Judge William Coward sentenced Palmer to a mitigated sentence of five to 15 months in adult corrections, suspended for 12 months of unsupervised probation.
While this means she will likely not serve any time in state prison, she will have a felony record and be ineligible for future employment with Cherokee County DSS.
Special prosecutor Boz Zellinger from the state attorney general’s office, said in court Tuesday that Palmer’s actions directly harmed children who should have been under the watchful eye of caring DSS workers.
When removed with a CVA, they did not receive services. Parents were also forced to make agonizing choices with little time to consider alternatives, Zellinger said.
A mother to a young son “was told she could temporarily sign her son to her father-in-law,” who had drug charges of his own, Zellinger said.
“The children in the house were being sexually abused by the older children. DSS still did this and used a CVA and sent the child to this house.” The mother later learned her son had been molested there.
Brian Hogan, a father who with his daughter won a $4.6 million judgment against Cherokee County, Palmer and former County Attorney Scott Lindsay in May, “was told he had 24 hours to meet with DSS or his daughter would be placed in foster care,” Zellinger said.
Palmer’s attorney, Hart Miles with Cheshire Parker in Raleigh, noted mitigating factors prior to Palmer’s sentencing. Miles said she accepted responsibility for her crime, has a good reputation in the community, has a good support system in the community and has a positive employment history.
During Palmer’s tenure, the state Department of Health and Human Services “found the DSS office was understaffed and underfunded,” a fact borne out by regular reviews conducted by the state agency,” Miles told the court.
Miles added that there was “no corrupt intent and no financial incentive,” for Palmer.
She will be required to pay court costs, submit a DNA sample and perform 24 hours of community service during the next six months, paying any related costs herself.
As Palmer pleaded guilty Tuesday morning, she raised her right hand in a near-empty courtroom, with two marble tablets bearing the Ten Commandments on the wall in front of her. Shortly after, she began dabbing at tears.
Other lawyers slipped into the courtroom to watch Palmer plead guilty. Among them was David Moore, who viewed the plea from the jury box. Moore served as the DSS attorney for Cherokee County after Palmer fired Lindsay. Moore declined to comment after the sentencing.
The court document for Palmer’s plea shows that she acknowledged her obstruction activity occurred beginning in 2016. Palmer provided a sworn signature acknowledging her guilt of the charges to which she pleaded.
As part of the plea agreement, the state is dismissing other charges against her and will not charge her with any additional offenses arising out of the same investigation. The move does not affect any potential federal charges.
“This is a very sad day for Cindy Palmer,” said Miles after her plea. Had she not pleaded guilty, “we could be in for a long and expensive legal battle.”
Palmer’s plea deal means the state won’t prosecute her for anything else related to her time at Cherokee County DSS; however, she could still be indicted at the federal level.
“She trusted Scott Lindsay and she trusted the previous director,” Miles said. “She spent her career helping members of the community.”
Zellinger asked that Palmer be prevented from holding any position at DSS or a position with “any responsibility for the caretaking of children.”
“Ms. Palmer up until recently was still working in the department. … It was a little bit of a slap in the face,” that she continued to work there,” Zellinger told the court.
After mulling it over, Judge Coward forbade her from working at Cherokee County DSS but not from taking care of children.
Former DSS attorney still faces charges
Lindsay, the former DSS attorney, also faces 20 felony charges in the unlawful child removal cases. The judge Tuesday dropped three misdemeanor charges because the statute of limitations had passed.
Following Palmer’s plea on Tuesday, Lindsay’s attorney, Jerry Townson, asked Judge Coward to dismiss the felony obstruction-of-justice charges against him. The judge rejected this and set a trial date of March 7 for Lindsay.
“The state is intending on going back and doing a superseding indictment on new CVAs that have been found,” Zellinger told the court.
David Hughes, the former Child Protective Unit supervisor for Cherokee County DSS, pleaded guilty in July to two misdemeanor charges in exchange for testifying “in any proceeding,” according to his plea transcript. He faced 10 felony obstruction-of-justice charges.
There may also be an ongoing federal investigation.
Lawyers for the children are also suing in federal court on grounds the DSS office violated parents’ and children’s constitutional rights to due process.
So far, a federal jury awarded father Hogan and his daughter $4.6 million in a lawsuit against the county, Palmer and Lindsay. The parties also settled another lawsuit brought by Heaven Cordell for $450,000.
A long process
Tuesday’s plea ends Palmer’s criminal legal fight with the state. The State Bureau of Investigation opened an investigation into the CVAs in 2018. In May 2020, a Cherokee County grand jury indicted her on two counts of felony obstruction of justice, three misdemeanors and one felony perjury charge for lying during a District Court proceeding in 2018.
She testified then that she heard of a CVA for the first time on Dec. 6, 2017, when Lindsay told her about a similar agreement. “Knowing the statement, which was material, to be false,” the grand jury indicted her for perjury.
Palmer started working at DSS in 1998, first as someone who determined whether people qualified for public assistance and then in a variety of jobs throughout the 2000s, including investigating allegations of child abuse and neglect, her county work history shows. In 2005, she served as interim director.
In 2015, then-DSS Director Donna Crawford was looking to retire and had apparently pegged Palmer for the highest post.
Two weeks before Crawford left the agency, she told the N.C. Office of State Human Resources she had collected more information about Palmer’s “job duties and responsibilities in relation to supervision in much more detail. Would you please look it over and see if she would qualify for the director?”
The then-DSS board chairwoman, Karen Kephart, asked about the status of Crawford’s inquiry on Palmer’s qualifications.
“I did speak to the deputy secretary at the HHS/DSS and unfortunately, Ms. Palmer does not meet the requirements for the Director vacancy as previously discussed,” wrote human resources consultant Dominick D’Erasmo in June 2015.
When contacted last week, Jill Lucas, spokeswoman for OSHR, said the state agency “did not issue any exception or ‘waiver’ to suggest that the County Board of Social Services could hire that candidate.”
Despite this, Palmer became the interim director starting in August 2015. A few months earlier, Cherokee County voters had elected her husband, Derrick Palmer, sheriff.
“When it was time for a new director, she submitted her name,” Miles told the court Tuesday ahead of Cindy Palmer’s sentencing. “When the reality was, she was probably a little underqualified and … she was not completely prepared to take on those responsibilities.”
In March 2016, the Cherokee County DSS board selected Palmer as the permanent director.
Under her leadership, social workers started separating families with CVAs at a quicker pace, social workers and their supervisor testified in a federal civil trial in May.
They described an understaffed DSS office with high turnover. The low-paying jobs were emotionally draining and required on-call shifts, which workers did not like. Many left for neighboring counties that paid more or left the field altogether, according to testimony from Hughes. The use of CVAs ramped up in 2016, he said.
“They were telling us we needed to get our cases turned over more quickly,” Hughes testified.
Cases were languishing in the system, and using a CVA was one way to “close” the case. Social workers testified they didn’t use the CVA all the time, just when they had “stuck cases” that would be difficult to prevail in front of a judge.
Social workers testified they received a copy of the CVA form from DSS attorney Lindsay, and he testified he had received one during a continuing legal education conference in either 2007 or 2010.
The county has admitted to 30 CVAs from 2009-18, said Sean Perrin, the attorney representing Cherokee County in its civil trials said in May. Attorneys for the children and parents dispute this, saying the county used a variety of documents to separate children from families as far back as 1999.
In June 2018, as the SBI actively investigated crimes related to her leadership, Palmer abruptly resigned as director, and DSS immediately rehired her in a financial role at the same DSS office.
The move allowed Palmer to keep working at DSS even as the office conducted a massive shredding operation under the nose of state officials, who had taken up residence in the office’s child welfare division in a temporary takeover, a statewide first.
After her indictment, County Attorney Darryl Brown said he would investigate her conduct. Less than two days later, the county said she was allowed to keep her job because she had done nothing wrong in her then-current position as business officer.
Palmer resigned from that post earlier this month and “is not going back to work anywhere in county government,” Human Resources Director Melody Johnson said.
Throughout her criminal defense, Palmer’s lawyers have said she’s not the architect of the scheme, laying blame instead with Lindsay, the former longtime attorney.
“Cindy relied on the department’s longtime lawyer, whom she believed was following the law with regard to these agreements,” Miles said last year after a grand jury indicted Palmer, Lindsay and Hughes on dozens of felony and misdemeanor charges. Miles added that Palmer did not intend to break the law.
This wasn’t the first time Palmer’s allies tried to pin all the blame on Lindsay.
During an April 2018 closed session of the DSS board, Cherokee County Commissioner Dr. Dan Eichenbaum asked whether Lindsay’s approval of the use of the CVAs “would provide some cover for Ms. Palmer in terms of her legal jeopardy.”
The reply from then-interim DSS attorney Moore and then-DHHS Assistant Secretary Michael Becketts was an unequivocal no: “Mr. Becketts and Mr. Moore indicated that her training in 2016 had covered the appropriate department procedures that should have been followed regarding custody removals. The 2016 training was clear and direct and taught procedures and rules regarding maintaining parental rights.”
Lindsay started working on contract for the DSS office in 2007 and became a county employee in 2014.
Social workers testified Lindsay furnished the CVA to them and sometimes filled out the form. Former social worker Katie Brown said when she first heard of the CVA, she had questions.
“I questioned the legality of it. Where did it come from? If we can use it, why haven’t we been using it this whole time? Why do we go to court every single time?” she said in Hogan’s civil trial in May.
She testified that she asked both Lindsay and Palmer about it and was told it was a legal document.
“I don’t remember his exact quote, but he told us that we could use them, and it was legally binding,” Brown said.
Palmer fired Lindsay from his DSS duties in January 2018, and commissioners fired him the following month, meeting minutes say.
Lindsay’s Murphy-based attorney, Jerry Townson, sought to get charges against Lindsay dropped in August, saying nothing Lindsay did was illegal.
The contracts “can always be changed by a District Court judge,” he said. “So, nothing really changes. So, what the hell are these people — what are they really complaining about?”
What happened in Cherokee County
Social workers are supposed to follow certain steps when removing children to preserve a parent’s and child’s constitutional rights. Removing a child without due process — wherein the child and parent are represented by separate lawyers — violates a parent’s and child’s constitutional rights.
Any final decision about what happens to a child should occur in a courtroom before a judge.
When DSS takes a child away, the child is supposed to get services like medical care and mental health care. The people caring for the child also get a few hundred dollars a month to care for the child, and social workers are supposed to run background checks on their new caretakers.
But by 2009, Cherokee County DSS workers had begun asking parents to sign agreements that placed their children somewhere else, without any court involvement.
A lot of the time, parents signed a Custody and Visitation Agreement. The documents had the illusion of legality due to their formatting and presentation. It said all parties agree the placement “is in the best interest of said children,” and the custody lasts until each child “shall become 18 years of age or is otherwise emancipated.”
Some county DSS workers told parents that if they did not sign the CVA, their children would be placed far away from them, with foster parents the children did not know, according to court testimony. The children were often placed with a family member or someone else they knew.
Some parents signed the document because they feared what would happen if they did not.
Tienda Rose Phillips told CPP in 2019 that she resisted signing the CVA as it related to her son, then 7 years old, for as long as she could, but then DSS threatened to place her son in foster care.
“It did seem sketchy, but when you have someone who you think is over you and is threatening foster care, who you know can take your kid, you kind of do what they say,” Phillips said. “You kind of feel you have no choice.”
When removed in this way, the children received no services from Cherokee County DSS. Their caretakers were not paid to feed and house them. The parents and children weren’t represented by lawyers, and no judge ever ruled on the new placement.
County workers separated more than two dozen children from families in a variety of ways — including using documents like powers of attorney, family safety agreements, safety plans and “substantially similar agreements” — to dupe parents and avoid court oversight, according to lawyers representing children in civil federal lawsuits.
In September, Cherokee County’s insurer agreed to its first settlement for these cases with Heaven Cordell, a young Florida woman taken from her father as a child after her mother died. The county’s insurer will pay the $450,000 settlement.
The first federal civil case went to trial in May. After four days of testimony and less than four hours of deliberation, the jury awarded the father, Hogan, and his now-teenage daughter $4.6 million.
Hogan’s attorneys are preparing dozens more cases like his in the federal Western District Court in Asheville.
What plea means for insurer, Palmer’s retirement
Since Palmer pleaded guilty to a felony related to the conduct of her duties as the DSS director, the county’s insurer may not have to pay any of the county’s expenses — including lawyer fees, settlements or jury awards.
Cherokee County’s contract with its insurer, the N.C. Counties Liability Property Joint Risk Management Agency, does not cover “fraudulent, dishonest or criminal behavior of any Covered Persons,” according to the N.C. Counties Liability Property Joint Risk Management Agency, which sued Cherokee County in June.
Each of the more than two dozen lawsuits filed in federal courts involves the same constitutional violations as the Hogan matter — and each successful case or settlement could net hundreds of thousands or even millions of dollars.
Cherokee County commissioners have had numerous closed sessions over more than a year to talk about Hogan’s and other civil cases. Commissioner Gary “Hippie” Westmoreland said during a recent public meeting that lawyers estimated they would cost $50 million.
“Not if we settle,” Westmoreland said earlier this year. “Right? I hope not, if we settle.”
Even if the county settles, it could still be looking at tens of millions of dollars — an astronomical sum for a poor Western North Carolina county. Cherokee County collects around $16.8 million in property taxes per year, according to the county’s most recent financial audit.
“The liability of the County seems likely and the magnitude of the losses may exceed the verdict of the first judgment against the County,” the audit states in its section about liabilities.
The Monday after the federal jury verdict in May, the Cherokee County finance director talked with the state Treasurer’s Office for advice on ways to pay the cost, according to office spokesman Frank Lester.
Sharon Edmundson, the secretary of the Local Government Commission, advised placing a referendum on the ballot and asking voters for their approval.
“Thank you so much for your help,” wrote Cherokee County Finance Director Candy Anderson. “I am pretty sure our voters would not pass a referendum. We could try, but I would be shocked if it passed.”
Cherokee County could be on the hook for lawsuits filed through around 2035. Some of the children were very young when social workers removed them from families, and the statute of limitations to file lawsuits for those children lasts until they turn age 20.
The Local Government Commission can take over governments with runaway costs and no plans to pay debts.
“LGC staff is aware of and is monitoring the situation in Cherokee County,” according to a statement from the Local Government Commission in July.
Because Palmer pleaded guilty to a felony, she may forfeit years of eligibility in the local government retirement system, according to a state handbook on retirement benefits, which says people convicted of felonies directly related to their employment cannot get credit for years worked after 2012.
Palmer had worked in county government for 25 years when she resigned earlier this month.
She may still be entitled to receive a portion of those benefits as they relate to her service starting in the mid-1990s through 2012. Palmer is currently 47 years old.
Mother snared in CVA scheme speaks out
Hannah Allen, a 26-year-old mother, is among the dozens of people suing Cherokee County, Lindsay and Palmer.
Cherokee County DSS removed her 2-year-old son and placed him with her mother using a CVA.
“They wanted to put my (son) into custody, or they would put him into foster care, and I wouldn’t see him,” Allen said on Tuesday after Palmer’s sentencing.
If Allen refused to sign, she said DSS staff told her they would pull out her juvenile criminal records and use them against her to strip custody for good.
During the hearing, Allen crossed her arms and scowled when Miles said Palmer had a good reputation in the community.
“I’m part of the community,” Allen said afterward. “I’m part of Cherokee County.”