Bay St. Louis must pay back nearly $300K to DOJ

Updated: Feb. 8, 2017 at 9:28 PM CST
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BAY ST. LOUIS, MS (WLOX) - After a nearly 16-month investigation, the City of Bay St. Louis learned Tuesday night that it will have to pay around $300,000 back to the U.S. Department of Justice for misspending drug forfeiture money.

The city council voted 6-0 to accept the findings in the DOJ report, and that $299,968.54 must be paid back to the federal agency. The investigation began in 2015 after auditors looked into the city's drug forfeiture fund and found the shortage.

Councilman Lonnie Falgout says the council went into executive session late in the evening to discuss options about how to pay back the money. The discussion ended around 11 p.m.

Councilman Mike Favre made a motion to put the recovery money in a DOJ account for the exclusive use by the Bay St. Louis Police Department. Favre also proposed the money be taken from the city's general fund, and the city request help from the state auditor to file claims against the bonds of the officials responsible for misspending the money.

That motion passed 6-0.

"I think the only way we can recoup the money so that the taxpayers are not harmed is to go after the bonds of the individuals that we feel are responsible," said Councilman Joey Boudin. "We put the bonding companies on notice to go after the mayor's bond, the deceased police chief's bond, and the two city clerks."

Mayor Les Fillingame disagrees, telling WLOX News Now:

"I think if it is their personal desire to pursue a claim against any employee or official against all of the professional advice that they have received, there will be great personal liability. The only losses that have been suffered by the taxpayers of Bay St. Louis has been the loss of money spent by the council pursuing claims that don't exist. We have spent exuberant amounts of money on having this reviewed, audited and looked at legally. The council has gotten no advice from any of the auditors or agencies that have reviewed this, nor have they had any of the city's legal counsel advise them that there is any claims against any person that has participated in the DOJ program. That money was put in the general fund account and spent by the counsel. None of the money was lost, it was spent in the process of serving the community. Before you have a claim you have to have a loss, and there has been no loss."

The DOJ investigation started late in 2015 after an independent auditor found the $300,000 designated to the police department had been placed in the city's general fund and not used for police activities. The forfeiture fund shortfall was nearly $300,000. Favre said the money was spent on city operating expenses.

"We're not saying this money was mismanaged or misspent intentionally, but it was. At the end of the day, it was mismanaged. We broke every rule that the Department of Justice has laid out on this money, so somebody needs to pay," Boudin said. "The taxpayer didn't break the rule."

The DOJ requires drug forfeiture money only be used by the police department to buy equipment and conduct undercover operations.

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