City investigates possible fraud within $14 million program

VIRGINIA BEACH, Va. (WAVY) — Virginia Beach city officials are investigating claims of fraud at a therapy center for children with behavioral, social, or emotional issues.

The investigation into Pendleton Child Services Center began January 5, according to city auditor Lyndon Remias.

“I can assure you, we are not investigating any instances of children being involved or children being harmed,” Remias said. “There have been allegations of fraudulent activity and nepotism, and there were other allegations that I’m not really going to get into.”

Department of Human Services director Dannette Smith said she brought issues to Remias’ attention after her Continuous Quality Improvement department noticed “irregularities,” but would not elaborate on what those irregularities were.

“What we want the public to know is that when things come to our attention, we take the appropriate action we want to reassure the community we are providing good services to the families and to the community that we serve,” Smith said.

Remias said he could not get into great detail about the claims, since the case is still under investigation, but he did say Pendleton’s superintendent, Susan Dye, resigned on January 7 after 18 years with the center.

“[The investigation is] trying to determine the extent of the problem, we’re not sure how far it goes back,” he said.

By January 9, Remias said, three other employees had resigned: Jeremy Edge, a teacher, Keith Josey, a behavior specialist, and Terry Griffin, who is in charge of a state program for at-risk youth called the Comprehensive Services Act.

In 2014, the total expenditures for the Comprehensive Services Act program and Pendleton Child Service Center totaled more than $14 million dollars, according to city records.

“Obviously, when taxpayer dollars are involved we’re all concerned,” Remias said. “We’re trying to get to the bottom of the issues and get to the extent of the dollar amount.”

The investigation may involve more than the four employees who have resigned, and it’s possible they could face criminal charges if the investigation finds wrongdoing, according to Remias.

“Usually, if employees are resigning on their own free will, that can be an indicator that there’s been some wrongdoing,” he said. “No employees have been charged.”

The investigation could take weeks or more to complete. At the conclusion, Remias said, the findings will be reported to City Council.

10 On Your Side tried to contact every member of Virginia Beach City Council, but only two responded.

Councilwoman Rosemary Wilson said she had received a memo about the investigation, but had not thoroughly read it and could not comment.

Councilman John Uhrin also said he received a memo, but would not share its contents, since it was marked ‘Not to be distributed.’ Uhrin also said he had not thoroughly read it and would not comment.

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