Grand jury indicts former SEANC director Dana Cope

A Wake County grand jury on Monday indicted the former director of the State Employees Association of North Carolina on two counts of obtaining property by false pretense.

Dana Cope faces 44 to 92 months in prison per charge. He is accused of using the organization's credit cards to pay for personal items totaling $457,500.52, such as plastic surgery, home renovations, appliances, vacations, hotel rooms, massages, clothing, jewelry, electronic games and equipment.

He is also accused of submitting fake invoices to get checks, which he used to pay for flying lessons, vacations and landscaping totaling $113,346.05, according to the indictment.

"When someone is in a position of public trust and they abuse that, they need to be held accountable," said Wake County District Attorney Lorrin Freeman. "There are 55,000 victims, the members of the state employees association."

Mitch Leonard, the man who followed Cope as SEANC executive director, declined an interview but issued a statement to assure those members Monday:

While our members, staff and stakeholders are saddened by this latest development in an unfortunate turn of events for Mr. Cope, rest assured that we are taking all of the necessary steps – resulting from three independent investigations of our operations – to secure SEANC from ever experiencing a breach of leadership again. As such, I am confident that our organization will continue – uninterrupted – the important work of protecting and defending the interests of retired, current and future state employees.

Cope's attorney also released a statement, saying his client has cooperated with the investigation.

"Now that Dana has been formally charged, he will continue to cooperate fully in answering these charges," attorney Roger Smith Jr. wrote in an email. "We will begin the process of voluntarily surrendering Dana to law enforcement, where he will be served the indictments and will go before a Wake County Magistrate who will determine his Conditions of Release."

Cope resigned in February after Freeman asked the State Bureau of Investigation to look into spending irregularities at SEANC. The irregularities under question included a $19,000 check paid to a Washington, D.C., computer company that was reportedly cashed by an Apex landscaping company doing work at Cope’s Raleigh home.

The audit, conducted by national accounting firm Bond Beebe, found Cope “fabricated” the invoice for the $19,000 check, which was deposited by the landscaping company. The audit also found only about $14,000 paid to the company was legitimate, while another $94,500 in payments were “excessive.”

Other findings included:

• Cope did not reimburse SEANC for nearly $15,000 in travel expenses for a trip to Asia taken by family members.
• Cope used SEANC funds to buy more than $31,000 in private flying lessons.
• Cope received about $17,200 in reimbursement for questionable charges or items missing receipts.
• Cope used the SEANC credit card more than 2,000 times between October 2012 and February 2015 to charge nearly $405,000. Of that amount, about $361,000 was for questionable or undocumented items, such as women’s accessories, car washes, online retail purchases, hotels, airlines, restaurants, iTunes and online gaming.

“The results of the audit are clear: Our former executive director, Mr. Dana Cope, grossly misused SEANC credit cards and misappropriated SEANC funds for personal gain,” Leonard wrote in a letter accompanying the audit summary in April.

“Based on my observations over the last few weeks and upon review of this audit report, these findings stem from a culture of submissiveness, deliberately built over time by Mr. Cope, and maintained for his own financial benefit. As a result, established financial controls were compromised, transparency thwarted and the truth denied,” he wrote.

Leonard wrote that SEANC was working to recoup the money and implement changes, including many of the recommendations made by Bond Beebe in the report.

The audit firm noted “consistent, broad and systematic internal control failures” because SEANC’s written policies and procedures were not followed.

Among the changes, no check can be issued without proper documentation, a credit limit of $5,000 has been set and credit card charges are allowed only for fuel and hotel expenses unless approved by a supervisor.