Ex-office manager for Kentucky economic development group pleads guilty to wire fraud
A former office manager of Somerset Pulaski County Development Foundation charged with wire fraud pleaded guilty after she was found to have spent company money on her own personal finances.
Lisa Gadberry is federally charged with one count of wire fraud for misspending $142,000 from the agency over the course of five years, according to the plea agreement, entered in federal court Monday.
Gadberry’s plea agreement alleges she used the company’s credit card on personal expenses including vacations, retail purchases, gasoline, electricity, cell phone payments, restaurants and entertainment between November 2015 to May 2019.
The Somerset Pulaski County Development Foundation was dissolved shortly after fraud was uncovered, and reemerged as the new organization, the Somerset-Pulaski Economic Development Authority.
The maximum statutory punishment for the crime is 20 years, a fine not to exceed $250,000 or twice the amount of gross gain or loss, and supervised release of three years. Gadberry has not been sentenced.
A civil complaint filed against Gadberry in 2020 states Gadberry allegedly used the foundation’s credit card to pay for a vacation rental in Florida, a Bark Box subscription, a veterinary hospital bill, bowling in Texas and expenditures at Cumberland Orthodontics.
KY economic development agency accuses former employees of misspending $400,000
The civil complaint also lists the foundation’s former assistant director, Mark Bastin, as having used funds to purchase Cincinnati Reds tickets valued at $861.94 and $164.50, a personal trip to Myrtle Beach in 2018, visits to Hooters restaurant in Richmond and expenditures at Somerset Mental Health.
The civil lawsuit against Bastin, Gadberry and SPEDA’s former director, Martin Shearer, is still pending. It is unclear if Bastin or Shearer will face criminal charges for their alleged involvement.
The plea agreement alleges Gadberry covered up the scheme using the foundation’s bank account at Monticello Banking Co. in the name of Valley Oak Tennant Association. Gadberry directed certain foundation checks and payments to be deposited into the Valley Oak account and then paid the agency’s credit card out of the account knowing the Pulaski Fiscal Court and the agency board did not regularly use, monitor or control the account.
In a statement from SPEDA’s CEO and President Chris Girdler, the official said while the organization is grateful to see some level of justice for the people of the county through Gadberry’s plea agreement, the group is extremely disappointed it has taken five years to begin to reach an outcome.
Gadberry and Bastin had the civil complaint filed against them during the transition from the former Somerset-Pulaski County Development Foundation to SPEDA in 2019. The new oversight helped uncover “a considerable amount of waste, fraud, abuse and dereliction of duties by several of the foundation’s former employees,” Girdler said in a news release.
“The staff and board of directors of SPEDA have exhibited strict oversight and management of the organization’s finances since its founding to ensure our residents are getting the best return on the tax dollars that have been invested in our economic development efforts,” he said.
Girdler stated the group will continue to watch the case in an effort to ensure justice for taxpayers.
“In Somerset and Pulaski County, we will not stand for abuse of taxpayers’ money and trust and we will do all we can to fight for our community,” he said.
