Department of Justice

U.S. Attorney’s Office

Southern District of Mississippi

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FOR IMMEDIATE RELEASE

Tuesday, September 13, 2016

Hattiesburg Businessman Found Guilty of Fraud Relating to Government Housing Contract

Hattiesburg, Miss – On Monday, September 12, 2016, a federal jury found Kenneth Fairley, 62, of Hattiesburg, guilty of carrying out a scheme to defraud the U.S. Department of Housing and Urban Development (HUD), announced U.S. Attorney Gregory K. Davis. The guilty verdict came after a six day trial in Hattiesburg before U.S. District Judge Keith Starrett.

Fairley was found guilty of one count of conspiracy to defraud the United States and two counts of theft of government money. He will be sentenced on November 21, 2016 and faces a maximum penalty of 25 years in prison and $750,000 fine.

Fairley and his co-conspirator, Artie Fletcher, devised a scheme to defraud HUD in connection with a government contract issued to the City of Hattiesburg for the rehabilitation of two residential properties located within the city limits. The project was supported by federal funding and was executed through sub-contracted work to be completed by Pinebelt Community Services, a local non-profit operated by Fairley. Fairley conspired with co-conspirator Fletcher to fraudulently perform the work for a lesser amount than represented on the HUD contract, with the difference in the bid and actual costs being transferred to Fairley, through Fletcher, for purposes not intended by the government contract.

Artie Fletcher previously pled guilty to a Criminal Information charging him with misprision of a felony. He will be sentenced on December 19, 2016, and faces a maximum penalty of three years in prison and a $250,000 fine.

This case was investigated by the U.S. Department of Housing and Urban Development, IRS – Criminal Investigation, Federal Bureau of Investigation, and the Mississippi State Auditor’s Office. It was prosecuted by Assistant U.S. Attorneys Jay Golden and Abe McGlothin.