Officials with the state comptroller’s office said Sunday that they will seek restitution of up to $2 million in federal stimulus money that prosecutors say was fraudulently obtained by a wind energy company doing work for the City of Jonestown.
“We are extremely concerned about the facts uncovered in the investigation that are in court documents regarding the city, CM Energies and our former employee,” the agency said in a written statement.
The Travis County district attorney’s office late last week charged Mary Jo Woodall, a former comptroller’s office staffer and grant administrator, and Charlie Malouff Jr., founder of CM Energies, with securing execution of a document by deception, a first-degree felony for which they could face up to life in prison.
Officials have said the two are longtime friends.
Court filings said that Malouff and Woodall conspired to illegally obtain up to $2 million in federal stimulus money by overselling the company’s ability to deliver electricity-generating wind turbines for Jonestown. The documents describe a scheme in which Woodall assisted the company in obtaining the money by providing inside information about how to fill out the grant application.
Prosecutors said that Malouff made a series of embellished claims about the ability of the company – described in court documents as a subcontractor for Jonestown – to manufacture and install the wind turbines.
The project has not been completed, and authorities said the money has been diverted into other bank accounts. Investigators have said that their inquiry continues.
Jonestown City Manager Dan Dodson was warned by company officials that the windmill company was acting suspiciously, authorities said in court documents. But “Dodson responded that defrauding the government was ‘an oxymoron’ and that he was not going to lose sleep over a little white lie to get a grant,” the documents said. Dodson could not immediately be reached for comment Sunday.
The comptroller’s office said in its statement Sunday, “We require an applicant conduct proper due diligence on its subcontractors and sign affidavits stating the facts in the application are accurate.”
“The City of Jonestown did not ever contact us during the application process or since its approval with any concerns upon which the grant was based,” the agency said.
Officials with the comptroller’s office also said that agency investigators are working with prosecutors in the case.
“Our contract was solely with the City of Jonestown, not with CM Energies,” the statement said. “We will take the appropriate legal action and seek restitution from all available sources. We will also continue to actively assist with the district attorney’s office in pursuing its criminal case.”
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