Wake County Superior Court Judge Donald Stephens denied on Wednesday Vernon Hatley's motion to withdraw a guilty plea for his part in a scheme that prosecutors are calling the biggest kickback scandal in Wake County government history.

Hatley, the former senior director of transportation with Wake schools, is one of more than a half-dozen people implicated in a scheme that funneled more than $3 million to Barnes Motor & Parts Co. in Wilson in exchange for personal items and amenities.

The items included three new cars, three new campers with a permanent camping site in Myrtle Beach, S.C., a pair of personal watercraft, thousands of dollars in gift cards and a cruise to Mexico.

"The evidence overwhelmingly shows that the defendant knew about the scheme ... and had significant involvement," Stephens said.

Wake District Attorney Colon Willoughby said Hatley enabled the kickbacks to occur by signing thousands of bogus invoices with phony parts numbers. "[They] sent the invoices to get money, so that later they could decide what to do with it," Willoughby said Wednesday.

Stephens' denial of Hatley's motion voided a deal that would have landed Hatley in prison for five to 6 1/2 years. Hatley's fate is now in the hands of Stephens, who will sentence him after a hearing Friday.

On Wednesday, Stephens said he would weigh "significant mitigating factors" in determining Hatley's sentence. He said it "may be lower than the sentence recommended by the district attorney, or it may be in excess of the recommendation, in light of the evidence."

Hatley pleaded guilty in October to conspiracy and obtaining property by false pretenses after he admitted that he accepted "gifts," including a television valued at $3,000, a laptop computer, gift cards and carpeting for his residence worth about $6,000.

Last month, Chapel Hill defense attorney Barry Nakell filed a motion to withdraw the guilty plea. Nakell argued that his client "exercised poor judgment" and violated Wake County Public School policies when he accepted the gifts but that he was "criminally innocent."

Nakell maintained that Hatley had been the unwitting dupe of Carol Dail Finch, the former budget analyst with the transportation department.

Finch has also pleaded guilty in the case.

Nakell and Willoughby summarized their evidence Wednesday after three days of testimony.

Nakell told the court that Hatley did not know criminal activity was already going on at the transportation department when he was hired as director in 2001.

When he accepted the gifts, Hatley tarnished a sterling professional career and damaged his friendship with his neighbor, Bill McNeal, superintendent of Wake schools, Nakell said.

"The media portrayed Hatley as the ring leader," he said. "He lost his best friend, who would not testify on his behalf."

But at the end of the day, Stephens agreed with Willoughby that a well-educated, highly intelligent man could not be unaware of an illegal kickback operation among his employees.

"Without him, this scheme could not have happened," Willoughby said. "Without his acquiescence, it could not have happened at all."

A grim, stoic Hatley left the courthouse Wednesday with his attorney and brother without comment.

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