Guilty plea ends loan fraud case

Anita Bennett, who ran a small-business loan program, gets jail time plus probation

Staff WriterOctober 9, 2007 

— The woman accused of masterminding a scheme to bilk thousands of dollars from a city loan program pleaded guilty Monday in Durham County Superior Court to obtaining property by false pretense.

Anita Bennett, who won a bid in 1999 to run a small-business loan program for Durham, was sentenced to 2 1/2 years in jail plus three years of supervised probation for 20 counts of obtaining property by false pretenses that occurred while she was head of the program.

Bennett did not offer an explanation during the hearing of what happened.

The charges stem from March 2006, when investigators charged Bennett, her husband, James Leroy Bennett, and her sister, Kathy Fenner, with conspiring to wring $828,000 from the program by issuing loans to businesses that were either ineligible for the money or nonexistent.

Charges were dismissed last month against James Bennett.

Fenner entered two guilty pleas: one to conspiring to commit fraud, and the other to one count of obtaining property by false pretenses. Fenner was sentenced to 48 hours in jail and five years of probation, according to her attorney, Kerry Sutton of Durham.

The pleas end a criminal case stemming from an investigation that began in 2001.

Bennett ran the loan company through her nonprofit company, Triangle Economic Development Corp., for two years before officials discovered that no payments had been received from the 24 businesses that got loans. A closer look showed that some of the businesses cited did not exist.

Investigators said Bennett told people who came to her how to get loans, and then she charged the recipients a fee that she had no authority to levy.

Joseph B. Cheshire V, a Raleigh attorney who represented Bennett, said many people made mistakes, and his client was not the only one.

"It was clear that the program from the very beginning was flawed," Cheshire said after the hearing. "There was no oversight by the professional staff in the city. There was no oversight by the supervisors of Anita Bennett, my client."

In addition to their time behind bars, Bennett and Fenner were ordered to pay back money to the city. Bennett is to pay $180,789 in restitution. Fenner is to pay $42,400.

Carlton O. Clark of Georgia, one of the business owners accused of taking cash from the program, took a plea deal in December. He pleaded guilty to conspiracy and obtaining property by false pretenses. or (919) 932-8741

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