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Former Mayor of Stonecrest sentenced to prison for stealing COVID-19 relief funds

Jason Lary, the former Mayor of the City of Stonecrest, has been sentenced for using his elected office to steal hundreds of thousands of dollars in federal COVID-19 relief funds allocated to the city.

“Lary betrayed the trust placed in him by the citizens of Stonecrest by stealing the very funds meant to help his constituents weather the COVID-19 pandemic,” said U.S. Attorney Ryan K. Buchanan.  “The people of Stonecrest deserved better, and corrupt officials can expect severe consequences for using their offices to commit crimes.”

“It is extremely disheartening when an elected official, someone sworn to protect the community they serve, violates that oath by stealing relief funds intended to aid their community”, said Keri Farley, Special Agent in Charge of FBI Atlanta. “This sentencing holds Lary accountable for abusing his position of trust and blatant disrespect for the law.”

According to U.S. Attorney Buchanan, the charges and other information presented in court: In March 2020, the President signed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act into law in response to the economic fallout of the COVID-19 pandemic.  Under the CARES Act, the federal government distributed COVID-19 relief funds to individual Americans, federal agencies, and state and local governments, including $125 million to DeKalb County.  The federal government permitted DeKalb County to further disburse these relief funds to its municipalities.  In July 2020, the DeKalb County Board of Commissioners voted to disburse some of the relief funds to its municipalities, including a $6.2 million grant to Stonecrest.

Stonecrest was required to spend the relief funds in accordance with the CARES Act.  In general, according to the Department of the Treasury, relief funds could “only be used to cover costs that – [were] necessary expenditures incurred due to the public health emergency . . . . and were incurred during the period that [began] on March 1, 2020, and [ended] on December 30, 2020.”  Examples of eligible expenditures were medical expenses, public health expenses, and grants to small businesses to reimburse the costs of business interruption caused by required closures.

In September 2020, Jason Lary, then the Mayor of Stonecrest, signed a resolution acknowledging these CARES Act requirements.  The resolution also adopted a funding plan for most of Stonecrest’s relief funds.  The plan provided $1 million to the Stonecrest Cares Program for mask distribution, COVID-19 education and testing, and other purposes.  In practice, the Stonecrest Cares Program directed relief funds to churches and non-profit organizations in and around Stonecrest.  The plan also provided $5 million to the COVID-19 CARES Act Small Business Program (“Small Business Program”).

Stonecrest did not disburse the $6 million allocated to the Stonecrest Cares Program and Small Business Program.  Instead Lary worked behind the scenes to form a private company, Municipal Resource Partners Corporation, Inc. (“MRPC”), recruit its CEO, open its bank accounts, and ensure that Lania Boone, his convicted co-conspirator, would be hired as MRPC’s bookkeeper. Then, Lary caused the city to enter a contract with MPRC to disburse the relief funds as directed by Stonecrest.

In or about November 2020, Stonecrest published an application on its website for businesses to apply for relief funds under the Small Business Program.  The application included the question, “are you willing to allocate 25% of your grant to marketing your business?”  Hundreds of businesses applied for relief funds, but most of the applicants were rejected.  Ignoring input from the official selection committee, from about November 2020, until about February 2021, Boone signed dozens of checks on behalf of MRPC, directing relief funds to individuals, businesses, churches, and non-profit organizations of Lary’s own choosing.

Lary used three different methods to steal the funds Stonecrest disbursed to MRPC.  First, Lary conspired with Boone to steal relief funds before they were disbursed by MRPC.  In January 2021, Boone used her access to one of MRPC’s bank accounts to wire transfer approximately $108,000 of relief funds to a mortgage servicing company.   Lary and Boone knew the purpose of the transfer was to pay off the mortgage on a lakefront home owned by Lary.  Around the same time, Lary directed approximately $7,600 in stolen relief funds to be used for Boone’s son’s college tuition and rent.

Second, Lary told churches that received relief funds from the Stonecrest Cares Program that they were required to contribute a portion of those funds for purposes identified by Lary.  For example, Lary presented a check for $150,000 in relief funds to “Church 1,” on the condition that $50,000 be given to a company called Real Estate Management Consultants, LLC (“REMC”).   Lary did not tell Church 1 at this time that he actually controlled REMC.  And while Lary falsely stated that the $50,000 would be used to assist with home repairs for people who could not afford them due to COVID-19, in reality he used the money for his own purposes, including to pay off his outstanding federal, state, and local tax liabilities.

As another example, Lary presented a check from MRPC for $50,000 to “Church 2.”  Later, a person acting on Lary’s behalf told Church 2 to contribute $4,500 of the relief funds to REMC, purportedly for rent assistance.  Instead, Lary spent the money to pay his own property expenses and his dues to the Georgia Campaign Finance Committee.

Third, Lary and others acting on his behalf solicited relief funds from businesses that received grants under the Small Business Program.   Lary and others falsely claimed that the money would be each business’s “contribution” to Stonecrest-related marketing and advertising.  Yet Lary and others asked that these “contributions” be given not to Stonecrest, but to entities called Visit Us, Inc. and Battleground Media, LLC.   Lary did not tell the businesses that he controlled these entities.  In total, businesses were defrauded out of hundreds of thousands of dollars of relief funds.  The relief funds deposited into the Visit Us and Battleground Media accounts were used by Lary to benefit himself and his associates.  For example, Lary used relief funds held by Visit Us to pay for an associate’s political advertising.

Around October 2021, the United States seized approximately $480,000 of fraud proceeds held in the bank accounts of Visit Us and Battleground Media.

Jason Lary, 60, of Stonecrest, Georgia, has been sentenced to four years and nine months in prison to be followed by three years of supervised release.  He was ordered to pay restitution in the amount of $119,607.69.  Lary pleaded guilty to wire fraud, federal program theft, and conspiracy on January 5, 2022.  Lania Boone, Lary’s co-conspirator, pleaded guilty to conspiracy on February 11, 2022.  She is scheduled to be sentenced on August 15, 2022.

This case was investigated by the Federal Bureau of Investigation.

Assistant U.S. Attorney Trevor C. Wilmot prosecuted the case.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

 

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