Durham, N.C. — City officials said Friday they would dismiss a lawsuit against a former official convicted of skimming money from a federal small-business loan program.

Anita Bennett pleaded guilty in October to 20 counts of obtaining property by false pretense and was sentenced to nearly three years in prison. She also was ordered to pay $180,789 in restitution.

Bennett had been contracted by Durham in 1999 to run the federal program, which was designed to encourage small businesses to open in low-income areas. She was fired from her job in 2001.

Authorities said she issuing more than $800,000 in loans to nonexistent companies and funneled some of that money into her personal accounts.

The city sued Bennett several years ago, when officials weren't certain that she would be prosecuted in the case. But Durham City Manager Patrick Baker said Bennett already has repaid the city $50,000, and the court-ordered restitution makes the city lawsuit unnecessary.

"We feel that we have sent a strong message to anyone that handles or will handle taxpayer dollars on behalf of this organization and this community – you will be held accountable for your actions,” Baker said in a statement.

Bennett's sister, Kathy Fenner, also was convicted of obtaining property by false pretense and fraudulent conspiracy in the case. She was placed on probation and order to repay $42,400 to the city.