Hattiesburg Businessmen Sentenced in Government Fraud Case

Hattiesburg, Miss – Kenneth Fairley, 62, of Hattiesburg, and Artie Fletcher, 55, of Picayune, were sentenced by U.S. District Judge Keith Starrett on Monday, December 19, 2016 for their roles in a scheme to defraud the U.S. Department of Housing and Urban Development (HUD), announced U.S. Attorney Gregory K. Davis, IRS Criminal Investigation Special Agent in Charge Jerome R. McDuffie, HUD Special Agent in Charge Nadine Gurley, and FBI Special Agent in Charge Christopher Freeze.

Kenneth Fairley was found guilty, following a six-day trial in Hattiesburg, of two counts of theft of government money and one count of conspiracy to defraud the U.S. He was sentenced to serve a term of 36 months in the custody of the Bureau of Prisons on each count, to run concurrently. He was also ordered to pay restitution in the amount of $60,223.95, and a fine in the amount of $30,000.00.

Artie Fletcher pled guilty to a Criminal Information charging him with misprision of a felony. He was sentenced to 3 months’ probation and ordered to pay restitution in the amount of $60,223.95.

Kenneth Fairley carried out a scheme to defraud HUD in connection with a government contract issued to the City of Hattiesburg for the rehabilitation of three 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. The work was performed 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.

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.