Veterans' rents diverted, records show

Cash rents were sent to a company set up by THAP head Chester M. Luney, records show.

By JEFF TESTERMAN
© St. Petersburg Times,
published November 17, 2001

TAMPA -- Officials at the U.S. Department of Veterans Affairs thought residents of a homeless shelter run by the Tampa-Hillsborough Action Plan lived rent-free and got an array of services.

Instead, the veterans got no services and were threatened with eviction if they failed to pay $150 in cash as monthly rent, according to records obtained by the St. Petersburg Times. At least some of the cash was funneled to a corporation set up by THAP head Chester M. Luney to make large real estate purchases.

Navy veteran Joseph Allan Tuttle, 58, was threatened with eviction from the Veterans Village shelter after falling behind on rent. Tuttle later discovered his money was going to Coastal Bay Properties, a company that recently bought an east Hillsborough shopping center and property in Tampa's pricey Channelside District.

Tuttle has now taken his concerns to U.S. Sen. Bob Graham and to the VA's Inspector General's Office, which is investigating.

"They took people already in a position of weakness and then took advantage of them," Tuttle said. "It's the lowest thing I can imagine.

"Now that I know that I wasn't supposed to be paying rent, I want to know where my money was going, and I want my money back."

In 1998, Tuttle fell behind in his rent and got a letter from a THAP official telling him to pay up or get out of his Veterans Village apartment at 1911 E 137th Ave. The letter from Lynn Knox reminded Tuttle that paying rent was supposed to help the homeless vets.

Tuttle paid his back rent and avoided eviction.

In May, while paying his rent to resident manager Ken Shackleford, Tuttle became suspicious about where the rent money was going.

Shackleford had bought a money order for Tuttle's $150, and had made it payable to Coastal Bay Properties. Tuttle kept the money order receipt, marking his name, apartment number, the date and "Coastal Bay" on the stub.

Shackleford told Tuttle that Coastal Bay was THAP's "new accounting service." But Tuttle checked the phone book and found no accounting firm by that name.

He only learned the truth about Coastal Bay after reading recent news stories about Luney.

Coastal Bay Properties actually is a corporation Luney set up in 1997 as an asset holding company for THAP. Coastal Bay has spent millions to buy commercial property but does not provide services to veterans. Luney has said Coastal Bay was set up to produce income for the non-profit companies under the THAP umbrella.

"The money was supposed to go to THAP," Tuttle said, "but it was going somewhere it wasn't supposed to be going."

The VA's inspector general's office opened an investigation into Luney last month after the St. Petersburg Times disclosed that Luney had written grants as a VA psychologist, directing $415,337 in federal money to THAP, where he held a part-time position paying $78,000 a year. Luney abruptly resigned his $80,279-a-year job at the James A. Haley VA Medical Center in Tampa in early October after the Times requested grant documents filed on THAP's behalf.

A subsequent inspection of Veterans Village found numerous deficiencies. Under the federal grant it received, THAP was supposed to provide free shelter and an array of services. Despite glowing reports on the facility by Luney, officials found no counseling services, no vocational training, no fiscal controls, no oversight.

The VA also thinks that THAP overbilled the U.S. government for thousands of dollars. The VA has frozen $1.25-million in grants to THAP for homeless veterans programs.

The rent money collected from the homeless vets, plus a $19-a-day VA subsidy for each of the 23 vets housed at Veterans Village, add up to $16,560 a month. But THAP's mortgage payment on the facility is just $2,076 a month.

Where the money went "is a question investigators are trying to answer," said Roger Casey, who oversees the homeless vets grant program for the VA in Tampa.

THAP spokesman Warren Dawson did not respond to written questions regarding veterans rent money and THAP's eviction policy.

Luney also is at the center of a federal grand jury investigation into suspended Tampa housing boss Steve LaBrake and his fiance, Lynne McCarter. The couple obtained numerous financial favors from Luney and THAP to facilitate their building of a 4,200-square-foot mansion in South Tampa.

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