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VA wants vet shelter funding returned

After a blistering audit of the nonprofit Tampa-Hillsborough Action Plan, the government demands a refund of $714,131.

By JEFF TESTERMAN
Published March 17, 2006

TAMPA - For six years beginning in 1995, the nonprofit Tampa-Hillsborough Action Plan collected hundreds of thousands of federal dollars to operate a shelter and provide an array of services for homeless veterans.

The ambitious plan was never fulfilled.

Instead, the agency padded its budgets to attract more Veterans Affairs Department money, diverted cash from services for homeless veterans, then concocted phantom expenses as cover. Later, while its top executive enjoyed his expense account and bribed city officials, the nonprofit agency evicted the vets and converted the shelter into a $500-a-month for-profit apartment complex.

Now, the U.S. government wants its money back.

After a blistering audit of financial records for the homeless vets program, the VA intends to seek repayment of $714,131. That's the amount the VA's Office of Inspector General determined was spent in violation of federal standards, according to an audit released March 8.

"All I can say is, it's about time," said Joseph Allen Tuttle, 62, a Navy veteran of the Vietnam War who lived at THAP's Veterans Village shelter for more than three years. "The vets got s------ there.

"We were told when we moved in that it was an award-winning program," Tuttle said. "Yeah, it should get an award - for fraud."

The VA, in adopting the audit findings, seeks to collect $251,560 in grant funds used to acquire and renovate the 12-unit building used as a shelter at 1911 137th Ave. E in north Hillsborough, as well as $462,571 in per diem payments allocated to meet veterans needs.

The repayment could threaten the fiscal integrity of THAP, an agency that now specializes in providing HIV/AIDS case management services for the poor and assisting disabled elderly with weatherizing their homes. It showed $1.6-million in revenue in its federal tax return filed last year, but assets of just $399,532.

Neither executive director Virgia L. Knox nor the agency's attorney, Warren Dawson, returned calls for comment Thursday.

James A. Hammond, a member of the THAP board of directors, said he had not seen the audit, couldn't predict what effect repayment might have on the agency and complained that THAP was again being picked on.

"You guys have been beating up on THAP for years," Hammond said. "I would hope you would leave them alone and let them do the good work they're doing."

The audit, sparked by a St. Petersburg Times investigation of THAP executive Chester M. Luney, found that THAP "grossly inflated" its shelter operating expenses to obtain the most VA money possible. THAP's submissions to the VA totaled $1.38-million, but records show just 28 percent of that amount, or $394,529, actually went to costs associated with the shelter.

Auditors had difficulty examining THAP's books because many accounting records were inaccurate or missing, the audit says. Some expenses proved to be phony, including payments for shelter case managers, security personnel and legal consultants that did not exist.

The VA disqualified other expenses because they violated grant terms, including an $8,483 property tax bill paid when THAP forgot to file an application for a tax exemption and mortgage costs of $11,781 arising from THAP's use of the shelter as collateral for a loan whose proceeds were spent elsewhere.

Luney is serving a term at an Alabama prison camp after being convicted of federal bribery and conspiracy charges in a city of Tampa housing scandal.

Luney was convicted of providing favors to city housing chief Steve LaBrake and LaBrake's then-fiancee, Lynne McCarter, to assist them in the building of a south Tampa luxury home in exchange for lucrative housing contracts at THAP. The three were indicted in 2003, convicted in 2004 and sentenced to prison terms ranging from 33 to 60 months in 2005.

But Luney was also the key man behind the founding and financing of the Veterans Village homeless shelter.

As an $80,279-a-year psychologist at the James A. Haley VA Medical Center, Luney wrote grant applications for the shelter, which funneled tax dollars to THAP, where he also collected a paycheck of $78,000 a year.

At THAP, Luney enjoyed handsome perks, including a liberal expense account, use of a $45,000 sport utility vehicle and authorization to use THAP's money to buy season tickets for the Tampa Bay Bucs, the Tampa Bay Lightning and the Tampa Bay Devil Rays, according to the agency's records.

But vets complained they were being shortchanged on services promised at Veterans Village and even charged rent for what was supposed to be a free shelter.

Amid those complaints, and disclosures of Luney's favors for LaBrake and McCarter, Luney resigned his VA post, then his THAP position.

The VA, after discovering THAP had failed to provide promised clinical services to the vets in 2001, cut off per diem payments that had ranged from $450 to $570 per month for each veteran at the shelter.

Stripped of its federal subsidy, THAP kicked the veterans out of the shelter and began using the 12 units as low-income apartments. But the conversion was accomplished without VA permission, the inspector general found, triggering a repayment of the grant money used to buy the apartment building.

"Everything there was under false pretenses," said Tuttle, the Navy veteran. "We were supposed to get job training and transportation and we didn't. Rent and meals were supposed to be free but they weren't. Then everybody got thrown out.

"It's totally disgusting, the way veterans were treated at this place."

Jeff Testerman can be reached at 813 226-3422 or at testerman@sptimes.com

[Last modified March 17, 2006, 01:54:15]