Zurik Investigation: Records show possible overbilling, misuse of funds - FOX 8 WVUE New Orleans News, Weather, Sports

Zurik Investigation: Records show possible overbilling, misuse of funds

The former director of a federal grant program faces an investigation into the possible misuse of public money.

In a six month period in 2009, Schwann Sumas made about $70,000 as a contractor for the New Orleans Regional Business Park, a public organization in New Orleans East that focuses on economic and business development.

In October, FOX 8 told you about the business park's former president Roy Mack, who may have used public money for personal purposes. At the time, Mack had also just resigned as a member of the board of commissioners at the New Orleans Public Belt Railroad.

In that October report, an independent audit detailed seven findings and questioned costs by the business park. Possibly, the most serious records for that grant, paid for with federal money, were incomplete.

But a FOX 8 investigation found the records may be more than just incomplete.

“There needs to be some outside entity to make the determination, administrative, ethical, or criminal violations involved in this,” said Raphael Goyeneche, of the Metropolitan Crime Commission, or MCC, a government watchdog group.

The MCC is asking for law enforcement to get involved after FOX 8 showed them troubling findings.

The grant was to provide technical assistance to small businesses, businesses that needed help starting up, or developing. Again, the money was paid for with federal community development block grant funds and was overseen by the state's department of economic development.

The business park offered a number of services. Sumas would administer the program and bill the state for her money. But did she overbill the state?

Business park records show Sumas could bill for entrepreneurship training sessions $640 per student. The records show it's a ten week course. The $640 dollar cost was for all ten weeks.

But records show, for eight clients, Sumas billed the state multiple times for the training sessions. The owner of Motivate 4 Change, who is also a Sumas student, has records that show she billed a total of six times. All totaled, if the records are correct, Sumas billed and collected almost $13,0000 more in federal funds than she should have received.

But there's more, many of the other services Sumas billed for may not have taken place. Sumas charged for five hours of in-house business counseling for Motivate 4 Change. The owner says that never happened. Sumas also charged almost $4,200 for a six to seven hour business conference that the owner of that company attended. The owner says she never attended a lengthy conference that night.

Other business owners tell FOX 8 similar stories.

Sumas received federal money for almost five hours of in house business counseling with the owner of GWJ Industrial Supplies. She also billed for a business assessment and specialized consulting. The owner says that is not true. He never received an assessment or special counseling and only showed up for one or two classes.

Sumas billed for another company's 5.5 hours of in-house business counseling and a business assessment. That owner says that never happened.

The owner of Mary's Planet of Fashions said she never did anything at the business park in 2009, but Sumas was paid for two hours of specialized consulting with the owner of that company in the same year.

And there are a few more examples of business owners saying what Sumas billed and received payment for work that does not match what actually happened at the business park.

“What your investigation has determined are some of these businesses that received the benefits of these trainings, people say never received that training,” Goyeneche said. “So the auditor didn't dig down that deep. Those are the types of questions you have raised and helped me formulate my mindset that th
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