A former assistant city manager was arrested Tuesday morning on charges of embezzlement and obtaining property by false pretense from a business incubator formerly funded by the city.
Lawrence Wray, 70, was board chairman of the nonprofit Raleigh Business and Technology Center, which is now under investigation by Raleigh police.
Wray’s attorney denied any wrongdoing.
A grand jury indictment, dated Monday, alleges that Wray essentially took tens of thousands of dollars from the incubator, which offered office space and mentoring to small businesses. The indictment claims that Wray negotiated a $25,000 loan to the nonprofit on Nov. 4, 2009, but wired the loan proceeds directly into a personal account.
The incubator then repaid the loan to the lender, a person named Alicia Lockard, according to the indictment. The incubator was obligated to repay the $25,000 loan, plus interest, for a total of $48,000 to be paid over a period of just six months, according to the indictment.
The center’s then-director, Bob Robinson, executed the promissory note. He said he was acting under Wray’s command, and that he did not recall the financial details, except that the loan included some of Wray’s land as collateral.
“I reported to Mr. Wray, not the other way around,” Robinson said by phone on Tuesday.
Conversely, Wray has claimed that he was likely acting under Robinson’s orders when he took the loan money into his personal account.
The indictment, offering few details on the relationship, said only that Wray “had” Robinson execute the note. Robinson faced no criminal charges as of Tuesday and has consistently maintained his innocence.
Robinson said he could not explain why Wray arranged the loan as he did. He declined to say whether he believed Wray had misused the incubator’s money.
“What he did with that money should be reflected in his statements to everybody,” he said. “I don’t want to be in his way as he does what he does. I don’t want to be involved in his process – just telling the truth is what I recommend.”
Pressed as to whether he had authorized the loan himself, Robinson said he had not seen the indictment and could not comment further. Robinson resigned from the incubator last year after auditors reported he had withdrawn $65,000 in teller’s checks from the incubator.
The indictment offered no identifying information about Alicia Lockard, the reported issuer of the loan, who stood to make a nearly 100 percent profit in just six months.
Lockard “was a person attempting to help the RBTC,” Robinson said. “RBTC had significant financial issues, and she helped the RBTC take care of some of its obligations.”
Lockard could not be reached for comment.
Preparing for trial
Raleigh police arrested Wray about 8 a.m. Tuesday at his home on Willow Run South Drive in Raleigh, according to police. He posted a $25,000 bail bond and was released later in the day.
An attorney for Wray, Stephen Smith, said that they were preparing for a potential trial.
“There are good business reasons for Mr. Wray’s actions at the business incubator,” Smith said. “He did not receive – did not improperly receive – any money from the business incubator.”
The indictment, however, claims that Wray never transferred the money back to the incubator, and that he “used the money for his personal benefit.” He was acting as secretary and treasurer of the group at the time, the indictment states.
Wray was an enduring force in the city, especially in Southeast Raleigh. He worked for the city from 1973 until November 2010, when he retired as an assistant city manager with a salary of about $165,000, according to the city.
He has been a major player with the Raleigh Business and Technology Center since 2000 when a coalition of governments and colleges built an 18,000-square-foot headquarters for the nonprofit with 30 small office suites. The center has existed as an organization since 1979.
Wray “always seemed to be focused on helping people to improve the quality of their lives,” said James West, commissioner for Wake County and former city councilman. He said he was “baffled and shocked” by the allegations against Wray.
“He was always there, providing the guidance and assistance, identifying the resources that were needed for the city to provide services for people in the community,” West said.
Before Wray retired from the city, he oversaw Raleigh’s relationship with the incubator, which received $162,000 a year from the city in recent years.
An audit in 2013 found unexplained cashier’s checks and payments to tenants, as well as $65,000 in missing cash, among other evidence of mismanagement. Raleigh leaders pulled funding from the nonprofit and evicted it from its city-owned building on South Wilmington Street. Wray unsuccessfully fought the eviction in court.
With investigators probing, Wray blamed Robinson for problems at the center, according to Robinson.
“The day that Mr. Wray went to his boss and suggested I be arrested, I was deposed by the city, and I gave them the answers to the audit questions,” he said.
Robinson said he has been cooperative with investigators.
Jim Sughrue, a Raleigh police spokesman, said he could not say whether any more charges would come of the police investigation.
Mayor Nancy McFarlane said new revisions to the city’s nonprofit funding policies should help prevent the misuse of city money.
“What this council has said is that we would like every entity that receives money from the city to have the same level of scrutiny, from the granting processes,” she said.
“We’re going to make sure that the financials they turn in have been audited to the same degree.” Staff writer Colin Campbell contributed to this report