Jerry Fannin indictment

Case: 7:17-cr-00003-KKC-EBA Doc #: 1 Filed: 02/23/17 Page: 1 of 5 - Page ID#: 1

UNITED STATES DISTRICT coffR'T':-~~·~·J:·;;~· EASTERN DISTRICT OF KENTUCKYF: ~ ~-~,, SOUTHERN DIVISION fEB 2 3 PIKEVILLE . -~~ ... s.~> . . . . :~-,. ._ ''°'~··:;111

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UNITED STATES OF AMERICA

v.

INDICTMENT NO.

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JERRY FANNIN

* * * * * THE GRAND JURY CHARGES: BACKGROUND 1.

At all relevant times, the City of Prestonsburg, Ky (hereinafter "City") was

a political subdivision of the Commonwealth of Kentucky and, as such, was a local government within the purview of 18 U.S.C. § 666(a)(l).

2.

At all relevant times, the City was comprised of various agencies,

departments, commissions, and councils, including, among others, the Mountain Arts Center, Prestonsburg Police Department, Prestonsburg Utilities Commission, Prestonsburg Fire Department, Stonecrest Golf Course, Prestonsburg Tourism Commission, and the Senior Citizens Center. The City and its agencies utilized several bank accounts, including, among others, the City General Fund, the 911 Wireline, the Fire Department Support Fund, the Tourism Commission Fund, Tourism Account, the Parking Fund, the Stonecrest Golf Course Account, the Senior Fund, and the Mountain Arts Center Account.

Case: 7:17-cr-00003-KKC-EBA Doc #: 1 Filed: 02/23/17 Page: 2 of 5 - Page ID#: 2

3.

In 2013, the City received more than $10,000 of funds under federal

programs or grants, including United States Department of Housing and Urban Development (HUD) funds for the construction of an addiction treatment facility, and Payments in Lieu of Taxes (PILOT) from HUD paid through the Prestonsburg Housing Authority, and, as such, came within the purview of 18 U.S.C. § 666(b ).

4.

At all relevant times, JERRY FANNIN was the Mayor of the City, and as

such was an agent oflocal government within the purview of 18 U.S.C. §§ 666(a)(l) and

(d)(l).

5.

At all relevant times, the funds of the City and all of its subdivisons legally

could only be expended to pay the just debts and for the benefit of the City, and not for the benefit of another person or entity. The property of the City legally could only be used for the benefit of the City.

6.

At all relevant times, the Kentucky Drillers (Drillers) were a semi-

professional arena football team located in Pikeville, Kentucky. The Drillers had no official or legal affiliation with the City. During tl~~e time period covered by this indictment JERRY FANNIN was an investor in and played for the Drillers.

7.

During the calendar year 2013, JERRY FANNIN caused funds from

various City-controlled bank accounts to be given directly to the Drillers. In addition,

JERRY FANNIN caused City funds to be expended to rent cabins at a state park for the purpose of temporarily housing the Drillers. On another occasion, JERRY FANNIN directed that two City-owned vans used by the Senior Citizens Center be used to transport the Drillers to a game in Michigan. City employees were paid out of City funds to drive

Case: 7:17-cr-00003-KKC-EBA Doc #: 1 Filed: 02/23/17 Page: 3 of 5 - Page ID#: 3

the vans and players to Michigan. In addition, a City credit card was used to purchase gas for the Drillers trip. The total of all expenditures by the City for the benefit of the Drillers totaled approximately $7,800.

COUNTl 18 U.S.C. ยง 666(a)(l)(A) 18 u.s.c. ยง 2 8.

The allegations contained in Paragraphs 1-7 are restated and incorporated

herein by reference.

9.

In the period of twelve consecutive months that is the calendar year of

2013, at Prestonsburg, Floyd County, in the Eastern District of Kentucky,

JERRY FANNIN, being an agent oflocal government that received more than $10,000 of federal funds in a twelve-month period, without authority converted to the use of a person other than the rightful owner, and did intentionally misapply money and property, that is, money and property paid to or used for the benefit of the Eastern Kentucky Drillers, which money and property was owned by under the care, custody and control of the City, all in

Case: 7:17-cr-00003-KKC-EBA Doc #: 1 Filed: 02/23/17 Page: 4 of 5 - Page ID#: 4

violation of 18 U.S.C. §§ 666(a)(l)(A) and 2.

A TRUE BILL

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CARL TON S. SHIER, IV ACTING UNITED STATES ATTORNEY

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Case: 7:17-cr-00003-KKC-EBA Doc #: 1 Filed: 02/23/17 Page: 5 of 5 - Page ID#: 5

PENALTIES COUNT 1: Not more than 10 years, $250,000 fine, and 3 years supervised release.

PLUS:

Mandatory special assessment of$100.

PLUS:

Restitution, if applicable.