Jury selection began Monday for the trial of contractor Homer Key, who is accused of colluding with a former Milwaukee County employee to steal federal grants intended to help disadvantaged business enterprises.
Attorneys for the state and Key said they hoped to give opening statements Monday afternoon.
Key is charged with two counts of theft by fraud and one count each of forgery and of conspiracy to commit the crime of having a private interest in a public contract. Those four felony charges carry a maximum of $70,000 in fines and 29-½ years in prison. He pleaded not guilty in September.
Key is accused of colluding with Freida Webb, the county’s former director of the Office of Community Business Development, to steal at least $40,000 in federal grant money.
The grants, provided by the U.S. Department of Housing and Urban Development, were intended to pay for seminars for DBEs on topics such as accounting and marketing through the county’s Capacity Building Program.
Milwaukee County defines a DBE as a for-profit business where either the company or its stock is at least 51 percent owned by someone who is both socially and economically disadvantaged and where someone who fits that description oversees management and day-to-day operations.
Webb, who the county terminated in March 2013, made a deal with the state to plead no contest in September to a theft charge that had been reduced from a felony to a misdemeanor. She did not admit to wrongdoing but chose not to dispute the allegations against her. In exchange, the state dropped felony charges of misconduct, forgery and having a private interest in a public contract.
A Milwaukee County Circuit judge found her guilty of the misdemeanor charge, which carries a maximum fine of $10,000 and nine months in prison.
According to the criminal complaint against Key, his alleged conspiracy with Webb began in 2005 when she hired him to run the county’s Capacity Building Program. The arrangement continued through 2010 with Key allegedly padding bills with extra preparation hours for courses he taught and with hours for courses he did not teach.
For example, Key subcontracted a course to an attorney in 2007, according to the complaint. The attorney spent 14 hours teaching DBE owners how to design a brochure using Microsoft Word, but Key billed for 54 hours. The state claims Key repeated that type of deception seven times, overbilling for a combined total of $22,060.
Key allegedly inflated his overhead costs, as well, claiming he needed money for registration, orientation, graduation, start-up, follow-up and other administrative costs, according to the state’s complaint.
From 2005 to 2011, Key also billed the Milwaukee Urban League to run the Capacity Building Program, according to the complaint. The MUL was not aware the county already was paying Key to run the program.
A request for comment from the MUL was not immediately returned Monday afternoon.
The alleged conspiracy also included paying Key to design a brochure for the Capacity Building Program. Webb then approved invoices in 2008, 2009 and 2010 to revise that brochure, according to the complaint, though the update on file for 2008 amounted to no more than some handwritten notes. Similarly, the 2009 and 2010 updates were “virtually identical” to previous versions, according to the complaint.
In 2011, Webb did not initially hire Key to run the program. Instead, she hired instructors but failed to get written contracts from them. Faced with difficulty paying those instructors, the state alleges, Webb and Key drafted a fake contract to make it look like he was running the program and subcontracting to those instructors. After that document was on file, Webb was able to pay the instructors, and Key resumed his past practice of overbilling.
Webb and Key’s plan was “to obtain every penny” of the grants for which Milwaukee County was eligible from 2005 through 2011, according to the complaint, and they fell short only in 2011, when Webb approved invoices for $27,100 of the $27,720 available.
Webb and Key billed for $237,100 from 2005 through 2011, according to court documents.
Key’s trial is expected to last through May 14. Webb’s sentencing is delayed until after Key’s trial is resolved. Follow @bkevit