Local News

Auto Parts Company Indicted In Fraud Scheme; Hatley Case Continued

Posted January 25, 2006
Updated November 18, 2006

— A Wilson-based automotive parts company has been indicted for its alleged involvement in a multimillion-dollar fraud scheme involving the Wake County school system on the same day another party in the case tried to get his guilty plea withdrawn.

Barnes Motor & Parts, of Wilson, was indicted late Tuesday afternoon on one count of obtaining property by false pretenses. If found guilty, Barnes could face fines.

The indictment was handed down the same day that Vern Hatley -- the former transportation director of the Wake County Public School System's transportation department -- testified that he had no knowledge of the fake-parts ordering scheme that siphoned at least $3.8 million from the school system for personal high-price items.

On Jan. 13, Hatley's attorney, Barry Nakell, filed a motion to withdraw his client's Oct. 11 guilty plea, which would have resulted in Hatley being sentenced to five to six years in prison.

In court, Hatley testified that he only accepted the plea deal to spare his family and the school system further embarrassment, and because he felt responsible since the fraud occurred while he was director..

"I accepted responsibility, as any leader would," Hatley said.

Throughout the investigation, and even after he accepted the plea deal, he said he maintained he did nothing criminal.

Hatley alleges in the motion that he did not know the money and gifts he received were the result of criminal activity in his own department and that his former budget analyst, Carol Finch, was the mastermind behind the whole scheme -- even though he personally signed thousands of requisition forms for the fake parts.

Hatley also testified that he accepted $23,000 in gifts, such as a television, computer, carpet and $11,000 in gift cards, because he thought Barnes was happy to have the school system's business.

"You thought Bobby Browder (a former manager for Barnes) just gave you a laptop?" asked Wake County District Attorney Colon Willoughby.

"Yes," Hatley said.

"And he just decided to put carpet in your house?" Willoughby asked.

Initially though, Hatley lied about the gifts, and Willoughby said he does not think Hatley is telling the truth now.

"Don't you think we should consider what you're saying as suspect?" Willoughby asked Hatley.

"It shouldn't," he responded.

If Superior Court Judge Donald Stephens were to allow Hatley to withdraw his guilty plea, the case would go to trial at a later date. If the judge were to deny the request, Hatley's case could go directly into the sentencing phase -- meaning witnesses, including Finch, would testify against Hatley.

Hatley was already serving time in jail, which would have counted toward his sentence. However, since he has asked to withdraw his guilty plea, he has since bonded out of jail.

Court proceedings are expected to resume Jan. 30, when Stephens will hear from more witnesses to determine if Hatley is cooperating with the investigation.

Five others former employees of the school system and Wilson-based Barnes Motor & Parts have also pleaded guilty in connection with the scheme; Hatley, so far, is the only one requesting to withdraw his plea.

The other suspects could receive anywhere from two months to 40 years for their alleged roles in the fraud scheme.

Finch, who pleaded guilty in December, faces up to 40 years in prison. Former Barnes managers Browder and Connie Capps agreed to a plea deal of five to six years.

Two other former school system workers have already been sentenced: Angela Malloy Sanders will spend two years behind bars; Pam Stewart will spend 60 days in prison. Capps, Browder, Sanders and Stewart are all out on bond. Their sentencing hinges of them cooperating.

A seventh suspect, Harold Estes -- Capps' boyfriend -- pleaded not guilty.

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