Forensic Audit Finds Fraud

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DUNCANVILLE, TX – On Tuesday, February 19, 2013, CA Forensics presented their report to the Duncanville City Attorney and the Duncanville City Council. The findings of this report support earlier conclusions drawn by the forensic accountant, and called for specific actions, including the involvement of the U.S. Department of Justice.

The 16-page report included exhibits such as copies of cancelled checks, phone conversation transcripts, other bank documents and a copy of the original CA Forensics report filed July 16, 2012. In the ‘Report of Examination’ dated January 28, 2013, it states:
“Based on the results of this fraud examination, we find sufficient evidence to support the conclusion that assets in the amount of $588,893.00 were misappropriated from City of Duncanville funds, and that former DCEDC and City of Duncanville officials misappropriated these assets for the benefit of Monte and Rosa Anderson, Main Station, and Main Station’s General Partner, MARA Inc.
“In addition, findings and conclusions noted during our previous review, and detailed in our Report of Examination dated July 16, 2012, include prohibited transactions, misappropriation, and tax fraud, and are incorporated herein by reference as Exhibit “C”[see The Suburban Newspaper, October 18, 2012]. Further, issues noted during examination include self-dealing, side-agreements, swap transactions, conflicts of interest, misrepresentation of fact, financial statement fraud, money laundering, and mortgage fraud.
“We have discussed the aforementioned findings with Duncanville City officials, and have recommended this case for referral by Duncanville officials to the U. S. Department of Justice at the earliest possible time. Respectfully, we again make that recommendation.”
The DCEDC and MARA, Inc. agreed in principal to the Main Station project in December of 2002. However, the agreement was not actually executed until April 25, 2003.
According to the terms of the agreement (Article V, Section 5.1), at the date of execution of the agreement “there are no other Partners of the Partnership, and no other Person has any right to take part in the ownership or management of the Partnership.”
A letter (Exhibit “A”) dated February 10, 2003 from Thomas P. Finley, Jr., and addressed to “Main Station Duncanville, Ltd.; c/o Mr. Monte Anderson, President; Mara, Inc., General Partner” describes an arrangement that violates that particular Article and Section.
In the letter, Mr. Finley expresses some doubts about becoming involved with MARA, Inc., although not in terms of the Partnership Agreement:
“Nevertheless, I think it is important that you consider the advisability of having me as director, officer and shareholder of Thomas James Investments, Inc. and your lawyer, as a business partner.”
In addition, Mr. Finley outlined the following in his letter:
“In this case the terms and conditions of the venture are well known to you because you were the one who suggested them. However, for the purposes of clarity I will repeat them here. The terms are:
1) Thomas James Investments, Inc. will loan $100,000.00 to the partnership at a rate of interest; and
2) Thomas James Investments, Inc. will own an interest in and become a Limited Partner in Main Station Duncanville, Ltd. from the Monte and Rosa Anderson interest.”
Exhibit “A” also includes a copy of a Bank of DeSoto temporary check for $100,000.00 drawn on the account of Thomas James Investments, Inc. with Monte Anderson as the payee.
Exhibit “B” of the report is most puzzling. It would seem to indicate that in addition to providing the agreed-upon land and money for the Main Station project, the DCEDC supplied an additional $500,000 as collateral for the construction loan for Main Station Partnership, Ltd. It includes a copy of a City of Duncanville check made payable to the Bank of DeSoto and signed by former City Manager Kent Cagle and former Finance Director Frank Trando. Endorsed by Kent Cagle, the check is noted as a payment for a Certificate of Deposit. On a page titled “COLLATERAL ASSIGNMENT OF DEPOSIT ACCOUNT”, the Certificate of Deposit number 10112 is described as collateral to a loan for the DCEDC and it was signed by Sherrie Jan Davis, Vice President for the DCEDC, and Jeanne Crawford Fralicks, Secretary. Even more puzzling, this agreement was signed April 25, 2003, the exact same day as the execution of the Partnership Agreement.
The report itself is an enhanced version of the July 16, 2012 report. The biggest difference is the number of new Exhibits that the auditor has provided to support his conclusions.
At the time of this printing, there has been no change in the original court date for the Duncanville Community and Economic Development Corporation v. MARA, Inc., Monte Anderson, Rosa Anderson, Options Holding, Ltd., and Bishop Firehouse, Ltd. The revelations of the CA Forensics report have brought several more players into the mix, many of whom are former City officials or DCEDC Board members. Provided these references are accurate, it would seem this case will have several delays and continuances before it actually comes to trial.