Motion Filed To Withdraw Hatley Guilty Plea In Fraud Case
Posted January 13, 2006
Updated November 18, 2006
Hatley pleaded guilty on Oct. 11 to charges of conspiracy and obtaining property by false pretense in excess of $100,000.
Investigators believe Hatley, as well as other former transportation department employees, was involved in a scheme with employees from Wilson-based Barnes Motors & Parts to divert millions of dollars through orders for parts with fake order numbers.
While some of the money may have been spent on school supplies, investigators said, much of it went to personal purchases and items such as gift cards, vehicles, boats, camper homes and golf carts.
According to indictments handed down in September, at least $3.8 million was spent illegally over a period of years. Investigators said Hatley had been authorized to approve invoices under $2,500 and that hundreds of invoices related to the fraud scheme were coming into the transportation department each day for under that amount.
Hatley's lawyer, Barry Nakell, filed the motion, which states that his client is legally innocent of the charges he faces.
It states that Hatley had no experience or expertise in budget or purchasing matters and that his primary job focus was on the operations aspect of the transportation department. Hatley, according to the motion, also had no reason to doubt budget analyst Carol Finch's competence or integrity.
Finch was also arrested and charged in connection with the scheme.
The motion goes on to say that Hatley acknowledges that he signed requisition forms -- later determined by investigators to be for false parts -- but that signing them was part of his responsibilities.
"It was Mr. Hatley's practice to rely on Ms. Finch to provide him the materials receiving reports and to sign them when presented to him by Ms. Finch," Nakell argues in the motion, and at no time did Hatley know that the part numbers were fake.
If a judge agrees to the motion to withdraw Hatley's guilty plea and the case goes to trial, Wake County District Attorney Colon Willoughby said he will go after the maximum sentence -- about twice the time of the plea agreement of six to eight years.
"Based on his interviews, the state has taken the position that (Hatley) was not cooperating, and he has taken the position, 'Well, I'm not guilty -- I'm innocent and I want my plea set aside,'" Willoughby said.
After Hatley and two former managers of Barnes, pleaded guilty in October, three other former school transportation departments, including Finch, entered guilty pleas.