Former Buncombe County Commissioner Indicted On Federal Charges
The Defendant Allegedly Conspired with Former Buncombe County Manager to Use $575,000 in County Funds to Sponsor Equestrian Activities in North Carolina and Florida
ASHEVILLE, N.C. – Today, a federal grand jury in Asheville returned a criminal bill of indictment against former Buncombe County Commissioner Ellen Madans Frost, 64, of Asheville, N.C., charging her with conspiracy to commit federal program fraud, federal program fraud, and mail fraud, for her involvement in a scheme to use more than $575,000 in Buncombe County funds to sponsor equestrian activities in North Carolina and Florida, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Director Robert Schurmeier of the North Carolina State Bureau of Investigation (SBI); and Matthew D. Line, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division, Charlotte Field Office (IRS-CI), join U.S. Attorney Murray in making today’s announcement.
Frost was elected as Commissioner for Buncombe County (the County) in November 2012, and continued to serve until December 2018. According to allegations contained in the 11-count indictment, beginning in early 2014 through November 2017, Frost conspired with former County Manager, Wanda Skillington Greene, to execute a scheme to defraud the County of more than $575,000, by misapplying funds allocated to the County’s Economic Development Program to support various equestrian enterprises in North Carolina and Florida. The indictment alleges that, as a horse owner and an avid supporter of equestrian activities including competitions and shows, Frost had a personal interest in supporting equestrian venues such as the Tryon International Equestrian Center (the Tryon Center) located in Polk County, and its affiliate, the Palm Beach International Equestrian Center located in Wellington, Florida.
As alleged in the indictment, in or about 2014, Frost began to speak with Greene about Frost’s desire to support the Tryon Center and related equestrian activities on behalf of the County. As a result, Frost and Greene developed a scheme to enter into sponsorship and advertising contracts with the Tryon Center, the Palm Beach International Equestrian Center, and affiliated equestrian enterprises, and to pay for those contracts using monies from the County’s Economic Development Incentive Fund. The equestrian enterprises were unaware of the criminal nature of the scheme, including the lack of authorization for Frost and Greene to enter into these negotiations and agreements without the knowledge and approval of the Board of Commissioners, as required by State law.
The indictment alleges that Greene and Frost took steps to cover the fraudulent scheme and to hide the County’s involvement in these unauthorized sponsorship and advertising contracts, by using the funds to promote the Asheville Regional Airport (the Airport), even though the Airport is an independent entity not governed or funded by the County. To perpetuate the cover-up, Greene and Frost ensured that the contracting parties understood that all sponsored events, signage, and advertisements would bear the name and logo of the Asheville Regional Airport, and that no signage or advertisements would be in the name of Buncombe County, even though the County was the paying sponsor. Frost and Greene never informed other County Commissioners about the existence of these contracts, or that County funds were used to pay for the contracts on behalf of the Airport.
The indictment alleges that, in addition to promotional material and advertising for the Airport, the County’s sponsorship contracts guaranteed access to amenities at the two equestrian venues exclusive to high-level sponsors. Specifically, the Tryon Center contract included access to a “Members Only” VIP area known as the Legends Club, “one (1) premium location VIP pavilion table,” a “full spread buffet, and a premium selection of liquor, beer, and wine,” and premium VIP parking. Entrance to the Legends Club and use of the VIP table was limited to persons whose names were on the admission list. The indictment alleges that the individual who ordinarily served as the contact person and approved the use of the County-funded table at the Legends Club was Frost, and anyone who wanted to obtain permission to use the table and be added on the admission list had to contact her. The indictment further alleges that during the 2015 and 2016 seasons at the Tryon Center, Frost repeatedly used the VIP table, and invited her friends and other guests to attend the events. Furthermore, Frost did not disclose to the other Commissioners the existence of the VIP table, nor her use of it.
According to allegations in the indictment, on at least two occasions prior to the signing of the sponsorship and advertising contracts, Frost and Greene sought to advance their fraudulent scheme to use County money to promote equestrian activities at the Tryon Center, by inviting to dinner individuals affiliated with the equestrian enterprises and the Asheville business community. The two dinners, totaling $5,877.94, took place at Asheville-area hotels, and were paid for by Greene using her personal credit card, for which she was later reimbursed by the County. Neither Frost nor Greene informed the other members of the Board of Commissioners about these dinners.
In addition to the dinners, the indictment alleges that Greene and Frost took at least two County-funded trips related to this scheme. One trip was to Wellington, Florida, to attend the “Winter Equestrian Festival” at the Palm Beach International Equestrian Center, during a time Frost and Greene would have access to the VIP table. The second trip was to Saratoga Springs, New York, which Frost and Greene took supposedly to visit the equine quarantine facility in Newburgh, New York, and to explore the possibility of establishing such a facility near the Asheville airport. As the indictment alleges, Greene and Frost never visited the facility in Newburgh during the trip. Instead, the pair attended horse races, and visited a large private farm where a horse once owned by Frost was stabled. The total cost of the two trips was $8,841.56. On both occasions, Greene paid for all travel expenses for herself and Frost, and later received full reimbursement by the County.
The indictment alleges that other members of the Board of Commissioners eventually learned about approximately $26,000 of payments after an article was published in an Asheville newspaper. Even then, Greene took steps to cover the extent of fraud, forging documents to reduce the apparent amounts that the County paid for the sponsorships and advertising, and falsely maintaining that the expenditures were the entirety of the County’s payments to the equestrian enterprises.
The indictment further alleges that Frost did not tell, at any time, any of the other Commissioners that she had already known of payments being made to the aforementioned equestrian enterprises, or that she knew County funds were used to pay for sponsorships and advertising on behalf of the Airport. Frost also did not tell any of the other Commissioners that she was aware of the existence of contracts between the County and the equestrian enterprises, or inform them of the full amounts of those contracts. Furthermore, as alleged in the indictment, as recently as November 2017, Frost continued to conceal the extent of her knowledge and participation in the scheme, and went as far as to be quoted in a local paper as saying that she was “surprised as everyone at the amount” of the contracts, stating that this was “absolutely not” a good expense.
A federal summons for Frost has been issued. All charges contained in the indictment are allegations. The defendant is innocent until proven guilty beyond reasonable doubt in a court of law.
The federal program fraud conspiracy charge carries a maximum penalty of five years in prison. The maximum prison term for each federal program fraud charge is 10 years, and the mail fraud charges each carry a maximum prison term of 20 years.
Wanda Greene previously pleaded guilty to public corruption and to other charges for unrelated schemes involving the misuse of County funds and is awaiting sentencing.
In making today’s announcement U.S. Attorney Murray commended the FBI, IRS-CI and the SBI for their investigation of this case, and noted that the investigation into corruption within the Buncombe County Government is ongoing.