HATTIESBURG, Miss. — Prosecution witnesses painted a picture Wednesday of a Hattiesburg housing rehabilitation project plagued by scant documentation, uncompleted work and questions about money that a contractor wanted repaid.

The Rev. Kenneth Fairley is on trial for conspiracy and theft, accused of skimming federal money from a project funded by the U.S. Department of Housing and Urban Development to rehabilitate two houses. Fairley is a political ally of Hattiesburg Mayor Johnny DuPree, and the project was administered by city government. Fairley is also known nationally for once serving as the agent for University of Oklahoma running back Marcus Dupree, who’s from Mississippi. Dupree later sued Fairley.

Both the mayor and the running back, who aren’t related, attended parts of Wednesday’s trial.

Fairley denies guilt. His defense attorneys say he may have been bad at bookkeeping but he had no criminal intent.

“Pastor Fairley never intended to deceive HUD of any money at all,” defense lawyer Arnold Spencer said, arguing the city of Hattiesburg bears at least some responsibility for the problems.

Retired HUD employee Frank Mason said he became alarmed after looking at the contract signed with Interurban Development by Pine Belt Community Services, a nonprofit led by Fairley. Calling the contract among the most lacking he ever saw in 27 years working for HUD, Mason said he lobbied for the department to force Hattiesburg to repay the federal funds and contacted a HUD criminal investigator.

“We needed to get our money back, and we needed to ensure we had on record that this money had been misspent,” Mason told jurors.

Cassandra Davis, a HUD financial analyst, testified that when she visited one of the two homes at the center of allegations, it appeared no work had been done a year after money was disbursed. Davis said she attended a June 2012 meeting at Fairley’s Mount Carmel Baptist Church where he said he had no documents. Later, Davis said she received a “minimally acceptable” packet by email.

HUD officials eventually ruled they had enough documents and didn’t demand repayment. Spencer points to that 2014 letter as “the most important document in this case” saying it shows HUD was satisfied.

Mason, though, testified that the letter doesn’t prove the houses were properly rebuilt, and said a criminal investigation continued after the letter was sent.

A former housing inspector for Hattiesburg’s federal programs office also testified, saying that most work remained undone in 2012. Randy Jordan said the house did not pass a final inspection until 2014 — three years after Fairley’s group asked to be paid for the work.

HUD investigator Robert Weeks also took the stand, telling jurors the department began investigating after Artie Fletcher, the owner of Interurban, sued Fairley in civil court in 2013 over money he said Pine Belt owed Interurban. In that lawsuit, Fletcher alleged Fairley was trying to gain money to subsidize Mount Carmel by having Interurban enter a bid, then performing the work more cheaply with local labor. However, Fletcher said Fairley struggled to complete the project and couldn’t pay back money that a nonprofit controlled by Fletcher’s wife had advanced to Pine Belt. Some recordings of conversations between Fletcher and Fairley discussing the money problems were played for jurors.

Fletcher’s lawsuit said at one point he attended a meeting with DuPree over the problems. Jordan said DuPree pressured him to approve an earlier new house built by Pine Belt.

Fletcher had been indicted with Fairley, but pleaded guilty Friday to a lesser charge of failing to report a felony.

The testimony came as defense lawyers continued to ask U.S. District Judge Keith Starrett to throw out the charges against Fairley, alleging prosecutor misconduct in failures to disclose evidence that might exonerate Fairley. Spencer told Starrett Wednesday that prosecutors had given the defense copies of hundreds of pages of documents Tuesday night after trial began, even after telling the judge earlier Tuesday they had no more documents.

Assistant U.S. Attorney Jay Golden said prosecutors only received the documents Monday.

Starrett did not immediately rule on the request Wednesday.


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