Former Mayor Jim Hayes found guilty on 16 counts
Published Tuesday, February 12, 2008
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A federal jury found former Fairbanks Mayor Jim Hayes guilty Monday of working with his wife to steal money from social-service grants between 2001 and 2005.
The decision against Hayes, a church pastor and former three-term mayor, consisted of 16 guilty verdicts on counts that ranged from theft, conspiracy and money laundering to tax fraud.
Hayes sat subdued, his hands in his lap in the sparsely attended courthouse, as a federal judge read the verdict late Monday afternoon. He had taken the stand one week prior to deny the charges.
The verdicts convict Hayes of having a direct hand in misspending hundreds of thousands of dollars from almost $3 million in grants issued to his wife’s LOVE Social Services tutoring and mentoring center on personal items — things that included a big-screen plasma television for the couple’s home — and to help build a new church for his congregation, the Lily of the Valley Church of God in Christ.
Hayes is scheduled to be sentenced May 2. His wife, Murilda “Chris” Hayes, was absent from the courtroom and has already struck a deal with prosecutors on reduced charges. She will be sentenced later this winter.
Assistant U.S. Attorney Karen Loeffler said the government has no plans to pursue anyone else involved with either the church or the tutoring center.
“This is the only two people ever charged and implicated” in the case, she said. “It was the government’s theory all along that this was a two-person crime.”
The jury acquitted Hayes on four counts and was left deadlocked on an additional seven. It was left unclear what punishment the former mayor will face — District Judge John Sedwick, who presided over the case and attended by phone as the verdict was read Monday, gave no indication of potential jail time or criminal fines for Hayes, and Loeffler declined to speculate.
Hayes walked out of the downtown federal building, unaccompanied by his attorney, shortly after 5 p.m. He declined to comment when asked what legal steps he may take next or whether he could repay the money targeted by the government.
It took jurors almost five days of deliberations to convict Hayes, who was the sole witness to take the stand in his defense.
Hayes and his wife have commented little in public since federal investigators searched their home, the tutoring center and the church over two years ago. They also, under pressure, slowly retreated from public posts — Jim Hayes resigned his seat on the University of Alaska Board of Regents in April after Gov. Sarah Palin asked him to step down and some state lawmakers looked to have him impeached. Around two weeks later, Chris Hayes left the Alaska Human Rights Commission following a request from Palin, who had already removed her from the Alaska Workforce Investment Board.
The trial began in late January and ran into last week. It was dominated by the government’s case, as financial specialists and government investigators linked copies of checks, money orders and cashier’s checks — many found by investigators in Hayes’ office desk during the 2006 search — to withdrawals from the tutoring center.
The jury’s decision links the spending to the Lily of the Valley church, where Hayes has served as pastor since 1997. The church had started building its new 21,000-square-foot home a decade ago before the project’s price tag grew by some 40 percent, too fast for its budget to manage through identified sources.
Construction contractors, furniture store owners, and others told jurors last month they had been owed thousands of dollars on the project before Hayes finally came through with payments starting in late 2001. As the trial moved on, prosecutors used witnesses to show money was slowly being funneled away from the $2.9 million in grants issued to the tutoring center, mostly to benefit the church through construction payments and, later, an audio projection system, furniture and gymnasium flooring.
Other witnesses consistently pointed to both Hayes and his wife as the financial heads of their respective organizations.
Loeffler credited a number of government agencies with cooperating to trace the spending.
“This was an example of law enforcement working together,” she said. “This was a long and difficult prosecution. I’m very proud of the team that put it together and I’m very pleased with the verdict.”
The paper trail introduced in court included documents that showed signs of outright fraud — cashier’s checks, for example, that had been altered in pen to disguise references to their original source, the tutoring center. And prosecutors and financial specialists introduced timelines showing that the church’s bank accounts had run dry at the time money from the tutoring center was transferred and payments to contractors went out, often on the same day.
The tutoring center was established in 2000 and was funded with five congressional social-service earmarks, steered to the nonprofit largely at the urging of U.S. Sen. Ted Stevens. It ran a slate of programs including summer education and sports camps. A call placed last week by the Daily News-Miner to the center’s phone number was met by a message that the number had been disconnected.
Evidence at the trial showed Chris Hayes and the nonprofit’s other signatories occasionally spent grant money outright on the church, which sits across the street from the tutoring center in South Fairbanks. The city of Fairbanks’ building official told jurors during the trial that city officials had confronted Jim Hayes after the former mayor’s 2001 retirement about a permit fee for the church project, a fee that had grown a year overdue. A $5,000 check from the tutoring center was sent to the city shortly thereafter to cover the bill.
The tax fraud convictions cover the years 2001 through 2004. The government had argued Hayes significantly understated his income on tax returns. A church deacon told jurors Hayes’ salary for his role as pastor had doubled, upon his request, to $800 a week when he left the mayor’s office. He had made more than $86,000 in his final full year as mayor.
The trial also provided a window into a pair of federal agencies’ oversight of congressionally-earmarked grants. Earmarks, funding mechanisms used to direct bites of larger federal spending bills toward individual projects like community centers or roads, have come under scrutiny from inside and outside Congress, and Palin has tried to distance the state of Alaska from the practice.
Stevens has said the agencies that distribute congressionally directed earmarks are responsible for monitoring the way they are spent. But managers from the Department of Housing and Urban Development and the Department of Justice’s Office of Juvenile Justice and Delinquency Prevention said during the trial that they relied largely on the tutoring center to follow the rules when spending the money, as they do with other grant beneficiaries. The departments have difficulty scrutinizing spending from earmarked grants at the ground level, they said.
Hayes took the stand in his own defense one week ago. A founding member of the board of directors at his wife’s tutoring center, he suggested he’d been told by someone at HUD that his church could legally accept grant-funded contributions from the center. Prosecutors challenged his credibility and suggested his recollection was of a “phantom” government employee.
Community Discussion
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some one should look at his actions during and after the city utilities sale. a new cabin at harding lake,a job for his wife with acs in human resources. i don't believe he pushed for that sale which has proved to be bad for the city of fairbanks without compensation from the interested partys. i think there where personal gains for him,his family, as well as for formar general manager for fmus,frank biondi. they always looked a little too happy in those front page photo opts. promoting the sales. somethings rotten in river city!
What a fine example of the leadership that we have in Fairbanks. He was elected not once, or twice, but three times. It's time for people to start waking up and demand changes in our government. This is just one more example of how our tax dollars end up supporting a politicians lavish lifestyle. Where are the checks and balances that this country was founded upon?
Good for the people and the justice we deserve. This man should be prosecuted to the fullest extent of the law. We the citizens of Fairbanks deserve better.
No, we tend to get exactly what we deserve. Just look at the current City government trying to annex property so they can get more money, they certainly have no services that Fred Meyers needs. Why don't they look at how they can serve better, instead of how they can steal more money from taxpayers.
WOW this not just a shot in the arm for the city government but also a shot at the church. The part that is the worst is that he is a minister and has been for several years and ministers are the ones most of us look up to and look to in time of need. Mr. Hayes needs to resign his pastoral leadership immediately in my opinion. Think about how his church is feeling right now,feeling duped and hurt by his deception from him and his wife.
Here is a little tidbit most people don't know about. When Hayes was Mayor, his brother-in-law died smoking crack near the Hayes church at a crack house. Yep, it "that" part of town. The story never saw the light of day. No backlash, no police "crackdown". One can only wonder how many others knew about it, or were active in keeping things quiet, and why.
You people are amazing if Mr Hayes was another ethnicity then the would not even be an issue. What ever happened to the investigation of Mr. Murkowski or Mr Young, oh I guess they received a slap on the hand privately. I am not justifying what took place but they are no different than any of us, they just got caught. We all have done things in the past which could have caused us to spend time in jail, it's only by the grace of God that no one found out. For all you critical people leaving comments I pray that God uncovers your sin in the same manner. Let he who is without sin cast the first stone.
I disagree I am a Black man and the way I see it a thief is thief irregardless of color and should be treated with the respect a thief deserves. This man was given the best our soceity offers (never spent any time in the military) yet some how he justified stealing from the public coffers to promote his own status and pocket.
Nice reporting; I've been following the story and even though I don't live in Fairbanks at this time I clearly got the whole picture and came to understand what was happening. The clear writing of the reporter gave me the gist and the particulars of the whole sordid experience. Too bad for all of the children who could have been helped with the money that was meant to help them, but that was diverted to personal use.
Yeah, you all got THAT picture, how bout'this1- I am a nephew to the "Hayes" and I never thought my aunt and uncle were capable of fruad!Besides this crap> My grandparents, Leeroy & Mazie Parham owned 151 acres on Parham McCormick rd.in Northpole,Alaska.In the Will listed the heirs and how real property was to be divided;ONE THIRD FOR EACH DAUGHTER. I patiently waited but began researching and tactfuly investagating. A legal advicate reviewed my documents and listened to my argument.Her responce was "Moraly they are wrong, Leagly they cheated you out of your (my deceased mothers) inheritence. This will be an expensive and dificult case to bring." All i wanted was 1-2 acres of land where my childhood was. The Hayes even offered to sale me "some land" in 2004. However the whole plot was sold to an outside party with out my concent or opinion. I am confused and still have anamosity tward my relitives for letting this happen to me and MY kids.In June 2007 i left Alaska, my family and all my problems behind. I needed a new direction and a clear view of my future. I enlisted in the U.S.Army on the contrary, and will continue to fight for what my grandfather left for me and his bloodline. Luckly the pioneering neigbor family McCormicks have land also so what ever happens, happens.My lil brother, older sister,and I will stick together always and forever. We are the future of the Parhams even if we aint filthy rich and famous!
Jer.ch.3 v."18": In those days the house of Judah shall walk with the house of Israel, and they shall come together out of the land of the north to the land that I have given for an inheritance unto your fathers.
"19": And it shall come to pass, when ye shall say, Wherefore doeth the LORD our God all these things unto us? then shalt thou answer them, Like as ye have forsaken me, and served strange gods in your land, so shall ye serve strangers in a land that is not yours.
Jer.ch."7": Then will I cause you to dwell in this place, in the land that I gave to your fathers, for ever and ever.
Your story's a sad one, Lark.
Just because someone applies the colors of a police officer or pastor to their cloak doesn't necessarily make them righteous.
Jim Bakker, Jim Swaggert, and many other supposedly 'righteous' persons have used their status and authority for personal gain, or to harm others.
At this moment, there's many such persons in powerful positions in this country.
I hope that you one day you get what's rightly yours, and, if not, that you at least don't let it eat a hole in your heart or your stomach.
Parham_Boy
Hayes and Hayes destroyed everything from the family. So let's put things in order for the sake of clarifying the damage done.
1. They sold ALL the property that belonged to your Grand Parents.
2. Your grand parents left almost $100,000. to build a new church. They spent all of that money (except $1000 prior to building the new Lily Church.
3. They forged their own daughters name on numerous checks.
4. They paid their tithes with stolen money (how low can you go).
5. They eventually spent that remaining $1000 listed in item 2.
6. They have not and do not speak to their Daughter, Son in law, and Grand Daughter since the trial went to the jury. In summary, the Hayeses have disbanded their own family.
7. Lily of the Valley church is broke because they stole all the money, quit paying the bills, and spent the money to pay the bills.
8. Two weeks ago, Jim Hayes, the convicted thief he is, stated while standing in church,"I have done nothing wrong, my wife did it".
9. Property that you should of had a chance to get, was sold to pay for Jim Hayes lawyer. By the way, his lawyer was worth 2 dollars. The government brought 70 witnesses and his attorney interviewed I believe 10 of them.
10. Jim Hayes last ditch effort destroyed the church body. During the meeting at which he was supposed to step down, he got up and lied again. Numerous members walked out for good. Now, the church is divided and there is not enough money to pay the bills. We know what that means.
Parham_Boy
Did you know that you can write a letter to the Judge and have it read during the Hayes sentencing phase and it must be read aloud?
Did you know everyone can do that?
Will you do that?
You should do that!
Truth
Truth,
good to know someone was listening!! umm
how,where, and who do i write to? Is any other family members participating? Would that cause more problems or
will it possibly land me a piece of SOLD land??
i DON'T know what that means for the church(money)but what could i do about it? What has Biship C.D. Williams said about all this???
I hope they compensate me somehow....
Parham Boy:
God Bless you! Your grandfather was one of my greatest mentors. He taught me the Word, Holiness, and the Love for righteousness. If you are seeking for righteousness and full healing,the public place will not suffice. As heartbreaking as this all is, your peace will only come through Christ. I will not speak to what has happened, but I Loved your family and still do. As well I probably have some old tapes of your grandfather exhorting that may bless you. I pray for your healing.
oh well things are ok in savannah georga. I miss my brother Rio and wonder if he will e-mail me. Happy late birthday,
Calisia is fine and so are my nephews in the next county over. Im holdin it down on my own i dont need nobody. Sarah Paylin for vp and you know who for the first black president!! ANY body wanna reach me call(912)323-1756* israel.parham@hotmail.com
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