Less than two weeks after the Bryson City Board of Aldermen voted unanimously to fire Fire Chief Joey Hughes, state officials searched his home as part of an ongoing investigation into whether he misdirected funds.
Investigators with the North Carolina Department of Insurance and State Bureau of Investigation seized paperwork, two computers and a collection of checks, stamps and envelopes from the Hughes’ home on Hyatt Creek Road in Bryson City earlier this month.
The town has since named a new fire chief, Brent Arvey.
Hughes is under investigation for misusing money donated to the fire department’s fundraising arm. Suspicion around Hughes’ actions arose after he repeatedly ignored requests from town officials to see the financial records after being tipped off to problems by a whistleblower within the department.
Records reveal that:
• Money collected during fundraising drives went unaccounted for and otherwise disappeared from the books.
• The fundraising arm did not have a board of directors. A sham board existed only on paper.
• Hughes singly acted as treasurer of the fundraising accounts and denied repeated requests from volunteer firemen during the years to share financial information.
The following is an account, taken from three search warrants, of the town’s mounting suspicions and the subsequent investigation into Hughes’ off-the-books accounts.
Town officials were tipped off by a whistleblower that Hughes might be misappropriating donations to the fire department. A former volunteer firefighter, Mitch Cooper, who had left the fire department in June 2010, came forward with concerns and was interviewed by Assistant Police Chief Greg Jones.
“Cooper stated concerns that donated funds, as well as other monies obtained by the fire department were not being maintained, accounted for, or properly used as intended,” according to a sworn statement from Jones.
The former fireman also said monthly financial reports were not being given to members of the fire department, as required, and the documents were not available upon request either.
Jones then followed up with the former fire department treasurer Teddy Petersen, who said he stopped handling the finances after Hughes transferred all the funds to a different bank. During that time, Hughes and local town officials had a dispute over how the fire department was run.
According to state law, all funds given to the fire department, including donations and money from fundraisers, are supposed to be kept by the town. However, Hughes refused to provide the town with the department’s financial records, according to Jones’ statement.
Town Attorney Fred Moody submitted a written request to Hughes asking him to provide the town Board of Aldermen with seven years of financial records from the Bryson City Fire Department and its local relief fund, the fundraising arm for the fire department. Donations were funneled into one of two accounts: “Friends of Firemen” or “Bryson City Volunteer Fire Department Ladies Auxiliary.”
Hughes replied to the town, saying the fire department had not had a bank account since Jan. 1, 2000. His letter conflicted with reports filed with the N.C. Fireman’s Association over the past decade, which listed Hughes as the treasurer. The reports stated that donations to the local relief fund were invested in a money market account, although failed to list an account number.
Bryson City Mayor Brad Walker asked Police Chief Rick Tabor to look into the Bryson City Volunteer Fire Department’s accounts. Walker said citizen had inquired about the run down fire department and their donations.
Police seized bank records, including statements, signature cards and canceled checks, associated with the accounts “Friends of Firemen” and “Ladies Auxiliary.”
During his investigation, Jones found several checks written to the fire department had been deposited into these bank accounts without the town’s knowledge or proper accounting.
“This account is being used to secret fire department funds from the eyes of the Town Alderman and or the public,” Jones reported.
Jones also found that only Cylena Hughes, the fire chief’s wife, was able to access the “Ladies Auxiliary” account. Wendy Peterson, Heather Wiggins, Cylena or Hughes could sign for a separate “Friends of the Firemen” account that had recently existed at United Community Bank.
The town board unanimously votes to fire Hughes.
The district attorney’s office asked the State Bureau of Investigation to assist in the investigation.
As part of the investigation, Tom Ammons, an official with the State Bureau of Investigation, interviewed current and former Bryson City volunteer firemen.
Wayne Henry Dover, a volunteer firefighter for 17 years, told Ammons that after he was named to the department’s executive board in 2010, other firemen approached him with questions about financial records and where the department’s money was spent. When Dover brought their questions to the Hughes, he was told that everything was under control and he did not need to see the records.
About one year ago, Hughes informed the board that both of the accounts were closed. Then, in August when Dover asked to review the bank statements, Hughes gave the department’s executive board handwritten notes about the accounts.
Dover also stated that Hughes lied when he said the department had only raised $600 during Fireman’s Day in October 2010.
David Zalva, a member of the department since 2008, helped count the funds raised on Fireman’s Day. The fire department had collected about $4,800, said Zalva in an interview with Ammons.
According to Ammons’ statement, Cooper also inquired about the department’s finances and received only fabricated pieces of paper stating what was spent and how much money was left, according to his interview.
Most of the firemen interviewed said they did not know the Bryson City Fire Department had a relief fund.
However, Douglas Woodard, a volunteer firefighter since 1998, said Hughes led a strike over the account eight or nine years ago.
As of 2002, Hughes was listed as treasurer of the Relief Fund Board, according to annual reports filed with the State Fireman’s Association. Charles Killebrew was listed as chairman of the board.
Killebrew told Chet Effler, an investigator with the State Department of Insurance, that Hughes asked him to serve on the board. Killebrew stated that he never attended any meetings for the board, however, nor saw any annual reports or ever acted as chairman.
“Before the strike, bank statements could be seen, and Ed Watson was the treasurer,” according to Ammons’ statement. “After the strike, account information was never submitted to the membership for review. There was no treasurer.”