Former finance director in Town of Landis pleads no contest to embezzlement
Former town manager and fire chief Reed Linn brought from prison to testify
ROWAN COUNTY, N.C. (WBTV) - Ginger Gibson, the former finance director, has pleaded no contest in court to her role in embezzling hundreds of thousands of dollars from taxpayers.
Gibson will serve 44-65 months in prison and has been ordered to pay restitution by Judge Craig Croom.
Gibson, along with former town employees Reed Linn and Andrew Morgan, were all charged in 2020 after an 18-month investigation into discrepancies in the salaries approved by the Board of Aldermen and the actual salaries paid, as well as discrepancies in town utilities accounts. The investigation spanned the years 2010-19.
In November, former town manager and fire chief Reed Linn pleaded guilty to embezzlement and was sentenced to pay restitution of $1.423 million and serve a minimum of 44 months in prison. Linn will forfeit his state pension, which was funded primarily with contributions made by the Town while he was an employee.
Gibson was in court on Wednesday facing 10 counts of embezzlement and two conspiracy charges.
Prosecutors said that Gibson took $899,495 she was not entitled to over 10 years while working in Landis. That included $91,000 in funds designated for volunteer firefighters, even though Gibson was not a firefighter.
Gibson received pay, and $6000 extra while on vacation at a resort in Punta Cana, Mexico, according to prosecutors.
“Who was responsible for the books?” prosecutor Jordan Ford said. “Linn and Gibson. The method they did it was secretive.”
Prosecutors also said Gibson used the town credit card for 869 personal purchases that included clothes, toys, video games, home decor, $5900 for golf fees at Irish Creek and Carmel Country Club, alcohol, meals, and personal vehicle service and upgrades.
Gibson visited Best Buy to purchase two large screen HDTV’s, 3D glasses, a stereo receiver, and other items. $1600 spent on liquor was charged back to Landis utility customers.
Landis residents also unknowingly paid for Gibson to have 13 meals a month, groceries, and Virginia Slims cigarettes. $16,000 for airfare and a resort stay was paid for by customers using Landis water.
Prosecutors also said Gibson frequently entertained herself and others on the town’s credit card, often purchasing multiple alcoholic drinks during workdays.
A total of $21,543 was charged on the card to pay dues for the Club at Irish Creek and a food an alcohol bill.
In her defense, Gibson’s attorney Vernon Russell told the judge that Gibson was “passive” when it came to spending money that she had simply received.
Russell placed all of the blame and responsibility for finances on Reed Linn, saying he had approved every expenditure made by the town.
Linn was brought into the courtroom in handcuffs and shackles from his prison cell in Albemarle to testify on Gibson’s behalf, saying that he was responsible for providing Gibson with her pay and the town credit card.
“I had control of the budget, including salaries and I set the salaries,” Linn said.
Russell also chacterized Linn as a “favorite son of Landis” who was given a job who wasn’t qualified for.
Russell said that the mayor and alderman gave Linn the authority to do whatever he wanted and that they “turned it all over to him and turned their backs.”
The investigation was initiated by Landis Police Chief Kenny Isenhour and Captain Roger Hosey in 2019. They requested that the SBI become involved through Rowan County District Attorney Brandy Cook.
Police uncovered “substantial evidence of possible criminal activity” during a review of town finances, then-Mayor Mike Mahaley wrote in a letter.
Linn and Gibson resigned following the disclosure of the investigation. In a letter to the town board, Linn said he was stepping down in order to spend more time with his family.
A week after the investigation was announced, the town created a “transparency page” to provide information about the compensation received by Linn and Gibson.
The new page was created “to provide the public with transparency into town finances and operations.”
According to the page, as town manager and fire chief, Reed Linn (listed as Douglas Linn) was making $69,077. The page notes that the state average for such a position is $92,817.
As finance officer, Gibson was making $58,937. Average pay for that position is noted as being $66,733.
But at the bottom of the page, there was a note regarding the salaries of Linn and Gibson that says “*Approved salary amounts. Actual amounts unknown, pending investigation / forensic audit.”
In March 2019, additional information was released showing Linn was actually paid $286.541 in 2018, while former finance officer Ginger Gibson made $216,168.
Linn and Gibson stole in excess of $25,000 from the Town’s payroll account over a period of several years, according to a lawsuit filed by the town in Rowan County district court.
According to that lawsuit, former manager Roger Hosey reviewed the payroll system and discovered “monies assigned in excess of $25,000 for the unauthorized payment of salary and contributions to the (retirement) plan on behalf of or to the benefit of Linn.”
The investigation led the town to file their suit after discovering that “unauthorized compensation” allowed Gibson and Linn the opportunity to receive contributions that they otherwise were ineligible for. It also indicated that the pair had inflated their incomes in order to better conceal the additional compensation.
The lawsuit requested that the pair both have their retirement and 401(k) accounts frozen and that they repay the town in excess of $25,000 each in unauthorized spending.
In a statement provided to WBTV, current Landis Mayor Meredith Bare Smith said “Your Honor has heard how these criminal acts of embezzlement financially impacted this community and cast a cloud of suspicion and distrust of those elected to serve the Town of Landis. Prior Board members have been ridiculed and personal integrity called into question. The existing Board struggles to regain the trust and confidence of our citizens they were elected to serve. Landis is a resilient community, the money stolen and skepticism exhibited by citizens towards their leaders are temporary setbacks. Unfortunately, the most devastating impact are the fruits of labor cultivated by generations of Landis Leaders squandered by these two individuals.”
“It is bad enough that so much money was being stolen from the town, but could they not have at least made certain that the most basic bills were being paid before taking this money for themselves,” the letter read. “Efforts by so many boards, citizens past and present, were consumed by the greed of these two individuals. Whereas they may have contributed some good, the fact remains that Landis will always be deprived of what it might have become.”
A third party involved, former parks and recreation director Andrew Morgan, was given probation.
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