Companies were accused of billing $2M for work not done. They say they won't repay it

Three companies that billed Macon's Industrial Authority for nearly $2 million that the authority says was either for work that wasn't done or for work at buildings that didn't exist say they won't pay it back.

"My clients vehemently deny any wrongdoing or that the Authority is entitled to reimbursement of any funds paid to my clients," said Atlanta attorney William "Chip" Collins Jr. in a nine-page letter dated Monday to Kevin Brown, the authority’s attorney. Collins represents the owners of the companies.

The Macon-Bibb County Industrial Authority sent a demand letter April 2 to Tyrone K. Lewis at Armstead Management LLC in Atlanta and to Roosevelt Whitehead Sr., doing business as W.M. Construction in Macon. The letters said that numerous invoices in 2015 through 2017 for "certain construction and demolition work purportedly completed at various property owned by the Authority," totaling more than $1.1 million, had been paid in full by the authority, but that the company never performed or completed the work.

The authority also sent a similar demand letter on the same date to Dante Prater at New Age Concept and Consulting LLC in Macon and Whitehead, alleging that the authority had paid that company about $772,000 for other construction and renovation work also not performed or completed.

Most of the work was to be done at Allied Industrial Park in Macon.

“My clients find it grossly unfair and disingenuous that the authority members, staff and attorney, all of whom were very involved when the work was being performed, approved and paid for and are on record expressly acknowledging the quality, difficulty and volume of the work, are now questioning whether the work was actually done,” Collins said.

Cliffard Whitby, the authority's former chairman, approved all the invoices for payment. Whitby also served as executive director of the authority from spring 2015 until he resigned in August 2017, when he was indicted by a federal grand jury in a public corruption probe.

"It was the executive director's job to make sure the work was done and to physically inspect the work," current Chairman Robby Fountain said earlier this month.

But Colliins said that while the work was being performed by the contractors, the authority never questioned that any work was improper, and it gave Whitby “broad discretion” over the management of the work.

“It is no secret that the current scrutiny on the payments to my clients emanates from the involvement in the projects (by Whitby) and the allegations against him in a matter unrelated to his authority duties,” Collins said. “He acted as the project manager with full knowledge and authorization by the board,” and checks paying the invoices were properly signed as approved by the authority.

The authority issued a statement Wednesday in response to Collins's letter stating that the contractors deny all responsibility and that they don’t intend to repay the money demanded by the authority.

“The contractors’ response offers little in the way of substantive reason or explanation as to the overbillings,” according to the statement. “Instead of taking the opportunity in their letter to provide factual justifications for the invoices they themselves generated, the contractors merely attempt to lay blame on the authority for failing to discover the billing inaccuracies sooner.”

The authority will continue to “evaluate its options for further recourse” for recovering the funds, it said.

Authority says it trusted Whitby

Fountain said earlier this month in an exclusive interview with The Telegraph that "we trusted Cliff," and there wasn't anything at the time to raise a red flag as Whitby approved the invoices and the work being done.

However, after Whitby resigned and in light of the issues brought up by the federal indictment, the authority requested a forensic audit of its records.

That audit revealed Whitby was related to the owners of two of the contractors. His brother-in-law, Lewis, is with Armstead Management, and his son-in-law, Prater, is with New Age Concept. The audit showed that Whitby violated an ethics code for not revealing those relationships to the authority.

On the advice of its auditors to hire a construction company to forensically inspect the work at Allied, the authority hired Macon-based Warren Associates to conduct the investigation. That's when the issue with invoices not matching buildings or work performed was revealed.

But Collins, the attorney for the three companies, has a problem with several issues and claims by the authority, and includes in his letter:

• The authority hired the all minority-owned businesses in an effort to “remedy the authority’s woeful history of failing to hire minority contractors.” But it is “disturbing” that the authority is trying recover those payments.
  
  
• Whitby visited the job sites often and was regularly accompanied by other members of the board, including Mayor Robert Reichert, Fountain, who was then vice-chairman, and Sam Hart.
  
  
• Fountain, Brown and acting director Stephen Adams acknowledged in The Telegraph article that the property was difficult to clean up and that buildings were either not labeled or were not numbered in sequence and therefore difficult to identify.
  
  
• No questions were raised as Whitby and Fountain co-signed the checks for the work done, “when my clients would have been in a better position to respond to the present after-the-fact allegations.”
  
  
• Warren, "a rival non-minority contractor, … submitted an unfavorable review of my clients’ work months and years after the work was performed" and was unable to match some invoices to the work, but Warren apparently didn't try to contact the contractors for clarification.
• Warren didn't mention the challenging circumstances presented by the “bunker-like former military buildings at Allied” and several obstacles that were uncovered as the demolition was done.
  
  
• “Mr. Whitby, often accompanied by Mr. Fountain, would physically show my clients which buildings needed to be demolished, so that there could be no confusion. … The authority, through … Whitby, was aware of what work the invoices related to, and the lack of identification of specific buildings.
  
  
• In some cases, the invoices couldn't be matched to buildings, Collins says, because those buildings have been demolished as requested, and there are before and after photos that show it.
  
  

The authority approved the process by which the companies were paid, it authorized Whitby to oversee the work, it approved the invoices and paid them after the work was done, Collins said.

“The authority cannot now change the terms of the express agreements it reached and completed with my clients,” he said. “The authority is not legally entitled to now try and distance itself from Mr. Whitby by second-guessing its own decision, to the great detriment of my clients, to choose Mr. Whitby as its chairman and project manager.”

This story was originally published May 23, 2018 at 7:46 PM with the headline "Companies were accused of billing $2M for work not done. They say they won't repay it."