Former Raleigh official charged with embezzlement

Lawrence Edward Wray, 70, of 917 Willow Run South Drive, was also indicted by a Wake County grand jury on a second charge of obtaining property by false pretense. He was released after posting a $25,000 bond.

Wray, who worked in Raleigh city government for 38 years until his retirement in 2011, served as board chairman for the Business and Technology Center, which the city opened downtown in 2000 to serve as a business incubator, providing inexpensive office space, networking opportunities and other support to start-up companies. Raleigh provided the center with annual appropriations to help finance its operations, but the city cut ties with the center after a critical 2013 audit.

The city audit found some questionable spending by center officials, and auditors also criticized loans and other transactions between the center and various board members.

During a subsequent police investigation, the incubator's former director accused Wray of using center funds to repay a $25,000 loan that Wray obtained under the guise of trying to pay the center's taxes and defray overhead costs, according to an affidavit to obtain a search warrant for Wray's personal account at Mechanics & Farmers Bank.

The affidavit states that investigators were able to trace repayments of the loan but were never able to find where the $25,000 was initially deposited in the center's accounts. The lender provided police with the routing number for the loan disbursement and noted that Wray was the beneficiary listed on the wire transfer, according to the affidavit.

Investigators matched the routing number with Wray's account at Mechanics & Farmers and have information from "a reliable source" that Wray made a $25,000 withdrawal from the account within 24 hours of the wire transfer, the affidavit states.

The indictment alleges that Wray negotiated a 48 percent interest rate on the Nov. 4, 2009, loan, which meant the Business and Technology Center was left to repay $48,000 in principal and interest within six months.

Wray has denied any wrongdoing, saying the business center's former director was trying to link him to the financial mismanagement at the center.

When WRAL News asked him about the loan in September, Wray recalled that the former director asked him to have the money wired to a personal account because the center's account wasn’t working. Wray said he didn't recall if the transfer occurred, but if it did, he said he he never would have used the money for personal expenses.

"I think the indictment is unfortunate," Wray's attorney, Stephen T. Smith, said Tuesday in a statement. "He and I look forward to the opportunity to tell the full story. He has never taken money inappropriately. There is a sound reason behind everything."

City Councilman John Odom called the charges against Wray "tragic."

"Lawrence has done a lot of great things for the city of Raleigh, so it’s a sad day," Odom said. "It’s sad because Lawrence is a good guy, still is a good guy. He just made some mistakes, obviously. We’re always disappointed when anyone goes in the wrong direction."

Mayor Nancy McFarlane and City Manager Ruffin Hall declined to comment on Wray's charges because of the ongoing legal case.

City officials plan to survey residents next month to see if Raleigh should open another business incubator, and the City Council will likely look at the results of that survey and public comment early next year.