A contractor accused of bilking Milwaukee County out of tens of thousands of dollars in federal grant money was no more than a victim of an incompetent bureaucrat, his attorney said Tuesday.
The contractor, Homer Key, was hired by the county’s Office of Community Development Business Partners to oversee its Capacity Building Program between 2005 and 2011. The program was a series of seminars that instructed the owners of disadvantaged business enterprises about such topics as marketing and accounting.
Concerns about the authenticity of his contract in 2011 and potential overbilling during Key’s oversight prompted the Milwaukee County District Attorney’s Office to review invoices approved by Freida Webb, the former Milwaukee County employee who was in charge of the program during Key’s tenure.
The district attorney’s office accused Webb of knowingly approving false invoices, paying Key money he was not entitled to and accepting a $2,700 kickback from Key.
Webb pleaded no contest to a misdemeanor theft charge in September in exchange for the state’s dropping of felony charges. She will not be sentenced until after Key’s trial is resolved, though she was not listed as a potential witness in Key’s case. Webb’s employment with the county ended in March 2013.
Key is accused of colluding with Webb to steal at least $40,000 in federal grant money that came from the U.S. Department of Housing and Urban Development. He has pleaded not guilty to four felony charges, including two counts of theft by fraud, one count of forgery and one count of conspiracy to commit the crime of having a private interest in a public contract.
He faces a maximum of $70,000 in fines and 29 ½ years in prison.
But Key’s attorney, Richard Hart Jr., of Milwaukee-based Hart Law Office, told the jury during opening statements Tuesday that Webb is to blame for any mismanagement of the federal grant money.
Webb asked Key to propose a contract to run the Capacity Building Program each year from 2005 through 2010, Hart said, and county administrators approved each one. Hart acknowledged that Key’s contracts equaled the amount of grant money available during that period but said that does not prove criminal intent.
“He’s not here to do a freebie,” Hart said. “He’s trying to make a buck.”
Hart claimed Webb kept sloppy records and was a poor administrator, and that led to Milwaukee County claiming Key was overpaid. An example of Webb’s mismanagement, Hart said, is the 2011 contract the prosecution is using as the basis for the forgery and conspiracy charges against Key.
In 2011, Webb, not Key, oversaw the program, Hart said. But she did not have contracts or insurance for the instructors, so she could not pay them, he said.
She sought help from Key, who agreed to draft a retroactive contract to provide ongoing insurance for those workers, Hart said. Key then was paid for his assistance.
“She kind of copies what Homer [Key] was doing,” Hart said, “only she’s terrible at it.”
The alleged kickback conspiracy, in which Key paid Webb $2,700 after he was paid in 2011, Hart said, was reimbursement for Webb’s having paid the instructors out-of-pocket while waiting for grant money.
But Assistant District Attorney Kurt Benkley on Tuesday labelled that 2011 contract a forgery, telling the jury the document was designed to divert money to Key. Benkley cited an email attributed to Webb and sent to Key detailing how much grant money remained in 2011 and instructing the contractor to bill the county for fabricated services and administrative costs.
“These are bogus, add-on charges to shovel money to the defendant,” Benkley said.
Not only did Key bill for services he did not provide, Benkley said, but he overcharged for the ones he or others provided.
“He was gouging the taxpayers,” Benkley said.
He showed the jury a slideshow of invoices Key submitted to the county and the corresponding invoices Key received from instructors. In one case, Benkley said, an instructor billed Key, and was paid, for 14 hours of classroom instruction, but Key billed the county for 41 hours and pocketed the difference.
“The students didn’t get 41 hours of instruction,” Benkley said. “This is a fraud. This is a lie.”
He said the state intends to call at least two witnesses to support its allegations. Benkley said Wendy Baumann, president of the Wisconsin Women’s Business Initiative, is expected to testify that her organization offers similar educational programming at an average cost of $300 per student. Key charged an average of $1,500 per student.
Benkley said the county’s director of audits, Jerome Heer, is expected to testify for the state that
“(Heer) found this program was rife with fraud,” Benkley said.Follow @bkevit