Auditors Find Thousands of Dollars Misused By Youth Program, But No Criminal Charges Filed

Project MPACT was supposed to keep Miami-Dade students from dropping out and joining gangs by paying them to build affordable, energy-efficient homes. You know, teaching them the value of good, honest work, like in "Stand and Deliver" or "Sister Act 2: Back in the Habit."

Instead, auditors and criminal investigators now say gross mismanagement allowed a contractor to misuse the grant money that was supposed to turn teenagers' lives around.

Palmetto Homes of Miami, Inc., was partnered with the initiative from 2008 to 2010. The construction company was owned by the same governing body that listed president Ariovistus Lundy as a member.

Lundy was no "Coach Carter," though, according to investigators. He kept most of the money allocated to pay students their stipends while retaining some as employees for as long as two years. (There was supposed to be a 240-hour limit on time employed in the mentorship program.) Participants were also paid $7.80 an hour instead of the $10 mandated by Project MPACT.

Palmetto Homes of Miami, Inc. was given a $140,800 grant from the Department of Labor to pay employees, according to an audit completed in 2010 and withheld from the public until this month due to ongoing criminal investigations by Miami-Dade Schools Police Department, the State Attorney's Office and U.S. Department of Labor's Office of Inspector General.

Lundy, who is 44, paid out a pithy $9,650 of that money to trainees and $7,418 to his company's insurance premiums. Federal money was also used toward payroll taxes as well as non-sufficient funds fees and the interest accumulated from them. Three MPACT employees were also paid salaries from the Palmetto Homes money, according to the audit. The remaining 67 percent is unaccounted for.

Lundy fully denies any wrongdoing. "Nobody wanted to be involved with the kids who were involved with the gangs. I was doing it from the bottom of my heart," he tells New Times over the phone.

But Lundy has been on the wrong side of the law in the past. In 1990, he was arrested for felony burglary of an occupied building (charges were later reduced). He's also been arrested for prostitutes multiple times (a charge that was not prosecuted) and driving habitually without a license in multiple counties (in both instances, a judge withheld adjudication).

Schools auditors recommended a series of changes based off the investigation, including that "all members will be vetted for possible conflicts of interests on the part of both the vendors and committee members."

But prosecutors declined to press charges, noting in a close-out memo that "records were inadequate and incomplete, there was the appearance that the contact entities did not perform the duties required, and that the comingling of funds and lack of oversight created a situation where there is very little hope of proving criminal charges against any person or persons beyond a reasonable doubt."

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Allie Conti was a fellow at Miami New Times and a staff writer for New Times Broward-Palm Beach, where her writing won awards from the Florida Press Club and the Society of Professional Journalists. She's now the senior staff writer at Vice and a contributor to the New York Times, New York Magazine, and the Atlantic.