Federal Indictment Charges Council Member And Fire Chief For The City Of Tryon, N.C. With Conspiracy To Commit Fraud
City Council Member Also Charged with Federal Program Fraud, Extortion, and Witness Tampering
ASHEVILLE, N.C. – A federal indictment was unsealed in U.S. District Court today, charging Leroy Miller, Jr., 51, and Joseph Samuel Davis, 42, both of Tryon, N.C., with federal program fraud conspiracy, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. The indictment also charges Miller with three additional counts, including federal program fraud, extortion under color of official right and witness tampering. The indictment was returned under seal by a federal grand jury sitting in Asheville on April 4, 2017, and remained under seal until Miller’s arrest earlier today.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Robert Schurmeier, Director of the North Carolina State Bureau of Investigation join U.S. Attorney Rose in making today’s announcement.
“Violating the trust of the public deserves swift and sure action by prosecutive authorities,” said U.S. Attorney Rose. “Today, on behalf of the citizens of Tyron, my office responded with an indictment against these two individuals who egregiously abused the trust bestowed upon them by the people.”
“The individuals arrested today are accused of stealing from the very system they were entrusted to support. The FBI and our law enforcement partners will investigate those who prey on programs that provide essential services to our citizens for their personal gain,” said Special Agent in Charge Strong.
“The public holds government officials to a high standard, and when that public trust is broken, we all suffer,” said SBI Director Schurmeier. “The SBI will continue to place a high priority on public corruption cases such as this one in Polk County, and we sincerely appreciate the diligent work of the U.S. Attorney’s Office in prosecuting this case.”
According to allegations in the indictment, over the course of the alleged conduct, Davis served the fire chief of the Tryon Fire Department. Beginning in January 2012, Davis was also appointed as Tryon’s interim, and later permanent, town manager. The indictment alleges that during the relevant time period, Davis received an increase in his salary of more than $5,000 per year, for serving as fire chief and town manager. The indictment further alleges that during this time, Miller was an elected member of the Tryon town council. In his position as a town council member, Miller had the power to affect and influence appointments, including that of Davis as interim and permanent town manager.
As detailed in the indictment, from at least April 2012, Miller began soliciting money from Davis. The two defendants reached an agreement whereby Davis would pay some of Miller’s personal bills in exchange for Miller’s championing within the town council for Davis to receive a higher salary, among other things. Miller sometimes made his solicitations for money in person or by telephone, and sometimes by text and email messages. The indictment alleges that from time to time, when he made these solicitations of money, Miller reminded Davis that Miller was in a position to help the fire department with a budget increase, that he had the power to affect Davis’s appointment as town manager and his retention of that position, and that Miller had the power to affect Davis’s salary in both positions.
Until in or about April 2016, Davis gave money to Miller out of Davis’s personal funds. Beginning in or about April 2016, Davis had insufficient personal funds to pay Miller when Miller solicited money from him. Davis therefore wrongfully used the town’s credit cards, on multiple occasions, to pay for Miller’s personal expenses, including to pay Miller’s utilities and cable bills and Miller’s auto insurance premiums.
The indictment alleges in September 2016, Tryon’s new town manager would assume that post, and as a result Davis would return to being solely the fire chief and therefore his salary would be lowered. On or about October 21, 2016, Davis sent Miller a text message discussing the strategy and language that Miller should use in attempting to protect Davis’s salary. Miller responded a few minutes later, asking Davis to send him what Davis wanted him to say. On the same day, Miller sent a text message to the new town manager stating that they needed to meet to discuss a budget amendment about salaries, and “specifically to Joey Davis [sic] salary.”
On or about November 8, 2016, Miller sent a text message to Davis asking if he could possibly pay one utility. That same day, Davis told Miller via text message that he could not “run anything through the town anymore with [the new town manager] checking behind me on all my expenditures.”
The indictment further alleges that in addition to obtaining payments of his personal bills using the town’s credit cards, Miller also solicited Davis to participate in a bill-padding and kickback scheme. On or about March 23, 2016, a private contractor (“the contractor”) submitted a bid for construction work on municipal buildings of the town. Davis, as town manager, was responsible for choosing a contractor, and he approved the contract. As a town council member, Miller was aware of the contract. In May 2016, Miller asked Davis for $2,500, and suggested Davis inflate the contractor’s bill by that amount and give the extra money to Miller. Davis, however, did not inflate the contract, and Miller therefore received no money from this proposed scheme.
According to the indictment, beginning in January 2017, Davis told Miller that he had been contacted by the SBI regarding Tryon town funds being used to pay for Miller’s personal bills. Miller advised Davis not to say anything, but that the money was from the town’s “needy fund” and that Davis anticipated the money would be repaid. Miller also advised Davis to get rid of his emails and text messages and to make sure that he did not “have a trail.” Later the same month, the indictment alleges that Davis again met with Miller and told him that the FBI as well as the SBI had now contacted him and wanted to speak with him. Miller again told Davis several times during this meeting to inform the FBI and SBI that Davis made the payments out of the “needy fund” and that he thought the money would be reimbursed. When Davis said that he had “things” on his phone, Miller told him he to wipe it clean.
Miller’s initial appearance is scheduled for 12:00 p.m. today in federal court before U.S. Magistrate Judge Dennis Howell. Davis is also expected to appear in court on the charges pending against him.
The conspiracy charge carries a maximum prison term of five years and a $250,000 fine. The federal program fraud charge carries a maximum prison term or 10 years and a $250,000 fine. The extortion under color of official right charges carries a 20-year maximum prison term and a $250,000 fine. And the witness tampering charge carries a maximum prison term of 20 years and a $250,000 fine.
The charges contained in the indictment are allegations. The defendants are innocent until proven guilty, beyond reasonable doubt, in a court of law.
In making today’s announcement, U.S. Attorney Rose commended the FBI and SBI for their investigation of this case. U.S. Attorney Rose also thanked District Attorney Greg Newman of North Carolina’s Judicial District 29B, which encompasses Henderson, Polk and Transylvania counties, for his office’s assistance with this case.
Assistant U.S. Attorney Richard Edwards, of the U.S. Attorney’s Office in Asheville, is in charge of the prosecution.