On June 17, 2005: WCTA wrote a letter to

The Board of Directors of the Wake County Taxpayers Association by unanimous vote has directed that Russell Capps, on behalf of the Wake County Taxpayers Association, by this means demand on behalf of all taxpayers of Wake County THAT:

1. Pursuant to State Statute 15A-824ff and 15A-830ff and other State, Federal, Constitutional and legal rights, both criminal and civil, the Wake County Taxpayers Association and all taxpayers of Wake County, being victims of the crimes committed, request that the Wake County Taxpayers Assoication be frunished copies/records of full disclosure of all information and discovery related to investigations with regard to fraud within the Wake County Schools System in the past five years.
2. The Board of Commissioners of Wake County immediately initiate proceedings for a full and complete, external audit of all financial operations within the Wake County Schools System; said external audit to be conducted by an impartial, professional, auditor/firm recommended by or approved by the North Carolina State Auditor's Office, and paid for by the Wake County Board of Commissioners.
3. The Wake County Taxpayers Association also be furnished with a record of any federal funds related to the accounts from which fraudulent behavior has been in any way related.

The following information forms the basis for the demand for this action:

1. The loss to Wake County Taxpayers through already reported fraud in the Wake County Schools System amounty to a sum greater than $2 million
2. Reports indicate that violators cite in the fraud cases, thus far revealed, advise that accused violators have been allowed to return high value goods obtained through fraudulent meaures and that the returned items have been sold through a questionable process, without prior public knowlege, which process appears to have not been to the bet interst of the taxpayers.
3. Reports also indicatethat preliminary restutution agreements have been made to allow violators to repay monies, obtained through fraudulent behavior, on the basis of state periodic payments highly unlikely to account for a full return of the funds in any timely manner.
4. The Wake County School Board has chosen to totally ignore the motion by member, Ron Margiotta, to call for a full and complete external audit of the financial operations of the System and has, instead voted in favor of a motion totally inadequate to address the concerns of the taxpayers, the victims of the crime committed (copies of the said motions attached.)
5. There appears a blatant disregard by members of the Wake County Board of Education, and by the school system Administrative officials, of concerns of taxpayers that a complete audit be conducted.
6. The failure of Wake County Schools Administrative leadership to have discovered/disclosed the fraudulent activities in a timely manner is unacceptable.
7. Of vital importance is the damage that has been cuased to taxpayers' confidence in the Wake County Schools Administration in the use of taxpayer monies, such loss of confidence causing great reluctance for support for any additional taxpayer funding of the vital issue of educating the county's children.
8. The Wake County School System is among the largest BUSINESS operations in the State. The Board of the Wake County Taxpayers Association asserts that it is of utmost importance that the systen be operated according to the highest standards of business and strongly urges that a highly qualified BUSINESS MANAGER be appointed and given full authority to oversee its financial operations.

RE: SBI Investigation of Fraud against Wake County Schools from Colon Willoughby, District Attorney

Dear Rep. Capps:

Thank you and the association for your letter of concern about the investigation into the fraud perpetrated on the Wake County Schools Transportation Department. The State Bureau of Investigation has been gathering information through interviews and documents for several months. Recently we have received assistance from the Federal Bureau of Investigation. The number of questionable documents are in the thousands, and the loss to the school system will exceed a million dollars. In the 18 years I have been a prosecutor in Wake County I have never seen this magnitude of fraud involving public dollars.

I have been trying to oversee as careful and thorough investigation as I can, because I believe this was an attack on one of our most important institutions - our schools. Although no charges have issued yet, I believe that a number of individuals who at one time worked for the Wake County Schools and Barnes Motor Parts will be charges with serious violations. In spite of the presumption of innocence, Iam of the opinion that all of the individuals against whom we seek charges will be convicted and many of these individuals will in fact be sentenced to prison. I have not agreed to immunity for anyone and will pursue those who have illegally profited at freat public expense.

I did agree that various individuals could voluntarily surrender assests (that I believe were illegally obtained) so that the assets could be sold before their value further iminished. At the time we were not sure if the proceeds would all go to Wake County Schools, or whether Barnes Motor Parts had legal clain to some of the assets. In any event, it was agreed that the property should be liquidated and the money be hld in an account until this could be settled. The persons who surrendered the assets were told that their surrender would no result in them getting immunity from prosecution but they could use this surrender to show the sentencing judge that they were cooperating with the investigation. Barnes Motor Parts also voluntarily refunded about $1,300,000 to Wake County Schools at the beginning of the investigation so that the school could use that money during this year rather than have it tied up in the courts for 1-2 years.

I have been personally working on this case because I believe it is one of the most important ones we have in this office now. Throughout this investigation and prosecution I assure you I will continue to remain personally involved and strive to see that this fraud is prosecuted vigorouly.

Thank you for your interest and concern about this matter. Please feel free to call me if you wish to talk about this or other matters,

With regards, I am


Very truly your,


Colon Willoughby
District Attorney

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