Key testifies in felony theft trial

Listen to this article

Contractor Homer Key was particular about his choice of words during his felony theft trial Wednesday, insisting that “retroactive” differs from “backdated” and “units” are not the same as “hours.”

Those distinctions are central to the accusation that Key colluded with former Milwaukee County employee Freida Webb to steal at least $40,000 in federal grant money from the county. Key faces four felony charges, which carry a combined maximum of $70,000 in fines and 29 ½ years in prison. He is charged with two counts of theft by fraud, one count of forgery by uttering and one count of conspiracy to commit the crime of having a private interest in a public contract.

Webb pleaded no contest in September to a misdemeanor theft charge in exchange for the state dropping felony charges. She has not been sentenced.

Key insisted Wednesday he did nothing wrong.

The money, which the U.S. Department of Housing and Urban Development allocated to Milwaukee County, was intended to pay for an educational program for the owners of disadvantaged business enterprises.

During Key’s testimony Wednesday, he disputed the prosecution’s description of his 2011 contract to run the educational program for Milwaukee County. The contract, which is the basis of the forgery charge and part of the conspiracy charge, was “retroactive,” he said, not “backdated.”

A retroactive contract, Key said, is a common industry practice. Backdating, he said, involves a nefarious intent that he did not have.

Webb hired Key from 2005 through 2010 to organize and oversee the program, and each year, she paid him the full amount of available grant money, a total of $210,000, according to the criminal complaint. Webb attempted to run the program herself in 2011, Key said, but still relied on him.

“It was just not her ballgame,” he said.

Key said Webb often asked him for instructional material or help organizing the courses. Eventually, he said, she needed his help paying instructors.

So they drafted a contract in December 2011, Key said, but made it retroactive to cover the courses that had been taught since September.

The state, however, considers that contract backdated and therefore a fraud, Assistant District Attorney Kurt Benkley said. The county’s chief auditor, Jerome Heer, testified earlier that the county has a strict review process for retroactive contracts and that Webb did not follow that procedure.

But Key said he and Webb were not secretive and that the contract went through the same channels for county approval as in other years.

“If it had been a false document,” he said, “it couldn’t have gotten approved.”

The state claims Key paid Webb a $2,700 kickback from that $27,100 2011 contract. Key said the money was reimbursement for costs Webb had covered.

But Benkley drew a comparison between that alleged kickback, which was roughly 10 percent of the contract, and a loan Webb gave Key in February 2012. According to the terms of that $300 loan, Webb got back $330, which is 10 percent interest.

Key also insisted Wednesday that he charged for “units” of work rather than for hours. A major portion of his defense is based on the claim that he had a lump-sum contract each year and was entitled to all the money he earned.

But Heer testified that he believes Key had time-and-materials contracts, meaning he could bill only for hours he actually worked or for materials he bought. Heer said he based that opinion on Key’s annual invoices, which itemized his work based on hours.

Heer said he believes Key regularly overbilled the county to ensure he was paid the full amount of grant money available.

Patricia Brown, an attorney who testified as an expert witness for Key, said Tuesday the language in his contracts was too broad to be for time and materials. She said Key was hired for a lump sum each year and was entitled to be paid that much regardless of how much he worked as long as he met the program’s goals.

The numbers on his invoices were not hours, Key said Wednesday, but units of work and were included only to help the county gauge how far he was toward meeting the program’s goals. His contract proposals for each year included projected hours and an hourly rate, Key said, but that was to explain what he planned to do and to justify his lump sum.

One example, Key said, was work he did to update a program brochure during multiple years.

Benkley said Key billed 27 hours to revise that brochure three times, but the minimal changes could not have taken more than 15 minutes a year.

Key disputed that, saying the work to revise the brochure included meeting with printers and getting approval of the changes.

“Just because nobody knows what I did,” he said, “doesn’t mean I didn’t do it.” Follow @bkevit