Documents Appear To Show Fraudulent Activity Within Veterans Committee
October 15, 2018
This story has been updated to indicate that the Michigan State Police say their initial statement the Michigan Attorney General's Office was involved in the investigation was incorrect.
While a State Police investigation continues into the misappropriation of donated funds by a member of the Livingston County Veterans Services Committee, documents and other information are raising more questions about the operations of that committee and the county’s reaction to what appears to be fraudulent activity by its members.
The investigation began after a woman said she was unable to obtain documentation for a $400 check she wrote Committee Chair Hansel Keene in October of 2017. The donor, who has requested anonymity, emailed former Veterans Services Director Adam Smiddy on August 22nd saying she had unsuccessfully tried several times to obtain a receipt for the donation, which she says was solicited by Keene to pay for a plaque that would honor members of the Livingston County Sheriff’s Department who had served in the military. She tells WHMI that when she wrote out a check to the Livingston County Veterans Department, Keene instructed her to include his name on the check as he was authorized to cash county checks and could more easily deposit it. The woman says that over the next 9 months, every time she asked about the receipt Keene would repeatedly say he forgot it, finally leading her to contact Smiddy on August 22nd.
In a follow-up email the next day, the woman told Smiddy she had also donated a new Dirt Devil vacuum cleaner and Bissell floor cleaner as well as a 48” riding lawn mower, which only needed a minor repair. She tells WHMI that Keene assured her all of the items would be useful to local veterans and he would take care of it, following up later saying that the vacuum and floor cleaner had gone to veterans and the lawnmower to a male veteran. After receiving the emails, Smiddy called the donor and according to her “sounded troubled” by her story and said the county wanted to obtain a copy of the cashed check, which she provided. Several days later he called back and said they wanted her to obtain the canceled check so they could see who endorsed it. She said she would contact her bank, but after she received it on Monday the 27th and emailed Smiddy with it, he informed her that he had been fired that day by a 4-1 vote of the committee. The four who voted to fire Smiddy included Keene, Bruce Hundley, Kevin Nagle and Joseph Riker. Committee member Jim Wallace was the lone no vote. WHMI has seen the canceled check, which is indeed signed by Keene and dated November 30th, 2017.
Smiddy has confirmed to WHMI the details leading up to his firing, and says after he was terminated by the committee, he directed the donor to email Livingston County Administrator Ken Hinton, which she did on August 30th, saying she had, “been made aware that someone may be trying to misrepresent or slander me by claiming I made a mistake, that I intended to make the donations to a different non-profit group, or that the items were not donations. These are total falsifications.” She ends by saying, “I believe it is quite a shame and inexcusable that anyone wishing to be a donor for good causes would have to face this kind of negativity, questioning and doubt.” The donor says she made that statement because Trooper Hammond told her that the person making those false allegations was Keene himself when he was questioned by Trooper Hammond from the Michigan State Police Brighton Post, who was initially assigned to investigate the complaint. Hammond reportedly told the donor that when questioned about the donations, Keene told him that perhaps she made a mistake and hadn’t actually made donations. When informed there was proof of the donations, he is said to have told the trooper that the woman had not donated the cash and items to the county, but instead to the Veterans Foundation of America. She told Hammond that she never heard of such an organization; Keene had never mentioned it and she would never have directed her donations there.
A check of state records from the Department of Licensing and Regulatory Affairs shows the Livingston County Veterans Treatment Foundation is a non-profit group incorporated in 2014 and doing business as the Veterans Foundation of America, which is associated with fundraising for the Livingston County Veterans Treatment Court. Furthermore, the records show the officers of the Veterans Foundation of America are Hansel Keene, Bruce Hundley and local attorney Neal Nielsen.
After telling the trooper she was positive she had not made the donations to that group, she says Hammond told her he would be back in touch with her following the Labor Day weekend. But then the investigation was transferred from the Brighton Post to District Headquarters in Lansing, where State Police Detective 1st Lt. Tom DeClercq confirmed to WHMI on September 18th that he assigned a detective sergeant to conduct a criminal investigation. DeClercq indicated that the transfer was made because of the “political nature” of the investigation and that he expected it be wrapped up within three weeks. However, the donor tells WHMI that since the transfer, no one from the State Police has contacted her, which she described as, “puzzling.” State Police spokesperson Lori Dougovito confirmed to WHMI on Friday, October 12th that the investigation is ongoing, and now involved the Michigan Attorney General's Office. However, Lt. DeClercq has since said that was a mistake and the AG is not involved.
Meanwhile, efforts had been ongoing to track down the status of the donor’s gifts. Her attorney sent a letter September 12th to Hansel Keene demanding that the donations, including the $400 cash, be returned or be submitted to the Livingston County Veterans Services Department with a donation receipt provided. A deadline was given of September 19th at 5pm for that to be accomplished or she would seek “all and/or any of her proper legal remedies.” On September 17th, a response was received from committee member Kevin Nagle, an attorney, indicating that he was representing Mr. Keene. He provided the donor’s lawyer with a receipt for the vacuum and floor cleaner, signed by Keene and Administrative Specialist Susan Cassie and indicated a receipt for the $400 cash donation was forthcoming. However, it was not valid as a donation receipt as it did not list the donor and was not from the county Treasurer's office. As for the lawnmower, Nagle said it had been dropped off at a salvage yard as it was unable to be repaired. It was later learned that the salvage yard in question was Advance Metal Alloys, owned by fellow committee member Bruce Hundley. The donor’s lawyer responded by pointing out, “the donation was mishandled. If it ended up at a scrap yard it is presumed there was then a receipt from the scrap yard and any monies received for it could have been immediately turned in to the county veteran’s department - with a valid donation receipt being issued by the county to my client, the donor. That procedure/process has apparently been “reversed/unwound”, (or whatever applicable term) as you now have the mower in your possession...It is difficult for my client and me to understand why it becomes even a tangential responsibility of the donor to deal with a situation of apparent misappropriation of donations...My client’s position remains that it is your client's responsibility to decide how he is going to correct his misappropriation of donations. My client demands a valid donation receipt (that conforms to IRS regulations) for the fair market value of the lawn mower. That is the only resolution my client is willing to accept.”
WHMI previously reported that a Freedom of Information Act request had produced documents indicating Nagle had also received seven disbursements made from the Veterans Services Relief Fund to either himself or his law firm between May of 2016 and February of 2017 totaling $4,900. While the payments were ostensibly for veteran-related legal representation, they raised questions about the propriety of a committee member receiving payments approved by a committee that he sits on.
Two days later, on September 19th, Nagle emailed the donor’s attorney and said, “after contacting our County Treasurer it appears that we are not going to be able to generate a receipt for the $400.00 check. This money will be reimbursed. A cashiers (sic) check for $400.00 will be delivered to your office today. We have retrieved the riding lawn mower and it is currently in my possession. Please advise as to what your client would like us to do with it. It is not in working condition. Thank you.” The cashier’s check was received later that day, made out to the donor’s attorney, with the remitter listed as Nagle Law PLLC. When Nagle asked what was to be done with lawnmower, the attorney reiterated his client’s demand for a valid donation receipt, adding that it was, “not the donor's responsibility to figure out what to do with a donation that was accepted and was told was already submitted to the county, with a veteran in need having received it, as Mr. Keene stated to my client.” Three days later a receipt was emailed from Nagle along with a letter from Livingston County Treasurer Jennifer Nash thanking the donor for the donation of a lawnmower valued at $20. Nash also sent an official letter thanking her for the vacuum cleaner and floor cleaner donations, valuing them for a combined $225. According to the donor, Nagle has since asked her attorney if all issues have been resolved. But the donor and her attorney have not responded, noting that $20 for a riding lawnmower doesn’t appear to be fair market value nor do they believe a response is needed from them since they had nothing to do with the misappropriation of the donations.
For the donor, the entire incident creates major questions about a lack of oversight of a department entrusted with spending millions of taxpayer dollars, especially when that department is apparently under the complete control of a volunteer committee that seems to close ranks when questioned about their practices. In her mind, the director of that department should not be vulnerable to being fired by a volunteer committee that appears not to be answerable to neither voters nor elected officials.
In response to our story, Nagle acknowledged that Keene cashed the check and said it was used to help pay for the plaque, but did not address the propriety or legality of Mr. Keene soliciting such a donation for a county department, made out in his name and cashed into his account. As to the remainder of the allegations, he said, "This particular Donor has now received receipts for all the vacuum items that she donated to the Livingston County Veterans Services. The riding mower was inoperable and was unable to be fixed in a cost-effective manner. The mower was offered back to the donor, through communication with her Attorney, and communication was received that she did not want it back. The mower was then taken to a salvage yard, which has no affiliation to the Livingston County Veterans Services, to be scrapped. A receipt for the scraped mower has been forwarded to the donor’s attorney." Again, the fact that Keene had informed the donor the items had been given to veterans for their use, in contradiction of the dates provided by the county-issued receipts, was not addressed. As to the State Police investigation, Nagle says, "As of today’s, date, Hansel Keene has not spoken to any law enforcement officials, including Trooper Hammond, concerning this matter. Three weeks ago, I spoke with Lt DeClercq to set up an interview date for Mr. Keene. I was informed by Lt Declercq that the matter had been given to a Sergeant to investigate. I have not been contacted since. We look forward to taking part in this investigation so the truth about these outrageous allegations of any misappropriation may come to light." His full response is posted below.
Ken Hinton, Hansel Keene, Bruce Hundley and County Commission Chair Don Parker, were also asked to comment on this story. They have yet to respond. (JK)