Audit: Pigeon Township trustee, employee in Vanderburgh County should repay nearly $90,000

The SBOA special investigation is limited to records associated with Pigeon Township related to payments made to Hardiman Construction, LLC. Wilson, Payne and Terrance Hardiman are accused by federal prosecutors of participating in a "kick-back" scheme related to work at the Dorothea MacGregor Family Shelter and The Pigeon Township Food Pantry.

Due to its findings, SBOA has requested Wilson and Payne reimburse the township $55,975 for invoiced work that wasn't completed, overpayment on invoices and payments lacking documentation. Additionally, the two have been asked to reimburse the state $31,383 for the cost of the special investigation.

A representative for the Pigeon Township Trustee’s Office told the Courier & Press there would be no public comment at this time.

Wilson and Payne each face five counts of wire fraud and conspiracy to commit wire fraud. The same charges are leveled against Hardiman, who also faces a count of money laundering.

All three have pleaded not guilty.

More:Pigeon Township trustee, two others indicted in alleged 'kickback scheme'

Work was paid for, not completed

The SBOA report states Pigeon Township paid $30,400 to Hardiman for work that was not completed. During a visit to the township, Wilson reportedly told the investigators that "something in the garage may not be done," when asked if the work was all done, according to the report.

She also told the SBOA "estimate" documents were considered invoices and not given prior to a job being finished, according to the report. If there was a signature on an invoice or estimate it meant Wilson or Payne had reviewed it and it was ready for payment.

 

"During our inspection of the homeless shelter, Payne claimed that it was not his job to ensure that the work had been completed before the work was paid," the report states.

Maintenance apartment rehab - $9,000

The report states the upstairs of the homeless shelter still had its original flooring, it had just been sanded and stained.

An invoice for the upstairs rehab dated Feb. 11, 2020, included "Sand refinish floor," but another estimate dated May 22, 2020, included "Floors: New sub flooring. Level sub flooring. Install vapor barrier. Lay waterproof flooring. rim and baseboard included. - $9,000.00," according to the report.

SBOA found no evidence new flooring was installed.

"During the inspection, Payne agreed that it was the original flooring of the homeless shelter that had been sanded and refinished," the report states.

Basement steps - $2,700

While visiting the shelter Feb. 7, SBOA investigators inspected the replacement of basement steps at the shelter.

According to the report, an estimate dated June 6, 2021, one of the line items paid for was "Basements steps - $2,700.00."

The SBOA inspected the steps and reported they were not replaced.

"Payne said that they had decided to close off the basement because they considered it unsafe for the people who live in the homeless shelter and, therefore, used this money for repairs elsewhere," the report states. "Payne did not say where the repairs were made with this money."

Homeless shelter garage - $18,700

The largest payment associated with uncompleted work in the SBOA report was the homeless shelter garage.

The report states Hardiman Construction, LLC was paid $8,000 for "Drywall/paint - Hand finish new drywall with level 5 finish. Paint with level 5 finish - $8,000.00."

SBOA inspections found that was not done, but the garage had been framed with plywood and no drywall was added.

"The estimate had Wilson's signature stamped on it, asserting the work had been completed and could be paid for," the report states.

During a meeting with the SBOA, Wilson reportedly told them anything with stamped with her signature had not been reviewed by her and she always signed estimates or invoices in pen.

Additional garage work paid for − but not completed − according to the report:

• •$4,500 for "Electric: Check all outlets and wiring to ensure up to code. Install new wiring for freezer + outlets. Replace all outlets/Switches"
• • $6,200 for "Ceiling tile: Ceiling tile that are water damaged will be replaced - $3,000. Framing: Platformswill need to be built and place for freezer units as well as washer/dryer."

More:Here's what happens when a township trustee is charged with a crime in Indiana

Overpayment of invoices, additional issues

The SBOA in its report noted that $5,100 was paid in an overpayment of invoices. There were also $20,475 worth of payments that did not have documentation to support them.

With the payments made for the homeless shelter, the SBOA states the township did not follow internal controls outlined in Indiana law. Any work over $100,000 on shelter expenditures would need approval of the county executive. There was no evidence this happened, the report states.

The report also found payments were made before work was complete.

"During the February 7th, 2023 interview of Wilson, she stated that at times she would issue checks in advance of jobs for the materials of the job," the SBOA stated.

SBOA investigators found there was no oversight of township financial activity on an ongoing basis by anyone other than Wilson and Payne regarding payments made on shelter expenditures. The report states this led to the issues of overpayment and payments for incomplete work.

For jobs costing less than $15,000, there would be no need for Pigeon Township board members to approve the costs. But all jobs over $15,000 does require board approval.

"The SBOA reviewed Board minutes for the entire period Hardiman Construction, LLC was being paid," the report states. "There were no mentions of approval of any of the jobs completed by Hardiman Construction, LLC in the Board minutes."

The audit states the findings were discussed with township board president Ruby McGlown and board members Connie Robinson and Shirley Baker and Wilson on April 27.

Wilson remains in her position as trustee at this time.

Houston Harwood contributed to this report.