HATTIESBURG, Miss. — An IRS agent says that a Hattiesburg pastor took $60,000 from a federally-funded housing rehabilitation program to subsidize his church.

WDAM-TV reports (http://bit.ly/2cb5F14) IRS Agent Bradley Luker testified Thursday in the trial of the Rev. Kenneth Fairley, who faces conspiracy and theft charges in an indictment that alleges he skimmed money.

The leader of Mount Carmel Baptist Church, Fairley denies guilt. His attorneys blame bad bookkeeping, not criminal intent.

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. The mayor and the running back aren’t related.

Developer Artie Fletcher of Picayune had been indicted with Fairley, but pleaded guilty Friday to a lesser charge of failing to report a felony. Authorities allege Fairley was trying to gain money to subsidize Mount Carmel by having Fletcher-owned Interurban Development bid on the work, then perform it more cheaply with local labor.

HUD investigator Robert Weeks and Bradley testified Thursday that about $98,000 in federal money went to Pine Belt Community Services, the nonprofit group Fairley headed. But the investigators said they believe less than $36,000 was spent on rehabilitation work on two houses.

Weeks testified that in a March 2015 meeting. Fairley said all the money had gone to Interurban Development. Weeks testified that Fairley then asked Weeks privately whether he was in jeopardy of being charged with a felony or a misdemeanor.

“I need to make sure that I’m not jail bound,” Fairley said in a recorded conversation with Fletcher played for jurors.

Weeks testified that he believes there is no separation between Pine Belt, Mount Carmel and Fairley. Weeks also testified that with Fletcher’s agreement, Fairley forged receipts in the names of Interurban and Fletcher’s mother claiming Interurban had actually done the work, in hopes HUD would accept the documents and keep paying Pine Belt. Fairley admitted to signing documents for Interurban on tape.

Pine Belt also borrowed $150,000 from a Fletcher-controlled nonprofit that it was supposed to repay, Fairley said in a recorded conversation. But when HUD stalled later projects, Weeks testified that Fairley was unable to recoup enough money to pay Fletcher. Fletcher later paid another contractor to do work on one of the original two houses and sued Fairley.

“I didn’t pull out my sword and put on my helmet because I wanted to,” Fletcher said in a recorded conversation. “I was forced to.”

Also in recordings, the two discussed the involvement of DuPree. He hasn’t been charged.

The trial continues Friday, and U.S. District Judge Keith Starrett told jurors it could continue into Saturday.


Information from: WDAM-TV, http://www.wdam.com