Powell embezzlement charges could have derailed megasite project

by Alejandro Alfonso

Colleagues touted David Michael Powell as a smooth, smart, behind-the-scenes operator before, and after, his resignation as CEO of the Piedmont Triad Partnership in January 2015. Lured from an aviation company in Ohio, Powell was picked to lead the non-profit, whose board of directors included the region’s biggest financial power players.

Powell, 51, was given the keys to the Triad’s economic future, but instead of opening doors for thousands of jobs across the region, as the point man for an industrial mega-site in Randolph County, he made an embezzlement case for the Guilford County District Attorney’s office.

Powell faces a minimum of three and a half years in prison if convicted. The Guilford County District Attorney is charging Powell with four felonies, accusing him of stealing from the non-profit some $70,000 he allegedly spent on lawn service, $40,000 for a boat, and more than $100,000 in cash, while supposedly working to bring jobs to a region devastated by job loss. To date, none of Powell’s assets have been seized. PTP’s budget included millions of dollars from investors, private foundations and the state.

Through his attorney, Powell has asked for a continuance at the last two court appearances. It is not unusual to postpone appearances when the defendant is negotiating a plea deal, according to Guilford County Assistant District Attorney Howard Neumann. The state claims Powell played an elaborate shell game with PTP money, writing checks to “numerous business entities” before moving the money, or having it moved, into his personal bank accounts, according to court documents. Powell’s next court appearance is scheduled for July 25.

Details of how Powell perpetrated the scheme, how it was discovered, or the procedural controls PTP’s board may, or may not, have had in place, which allowed Powell to pull off his alleged Bernie Madoff-like scam, are scarce. But, after an examination of records filed with the North Carolina Secretary of State, and insight from some who worked with Powell when he was CEO of PTP, an outline emerges of how he may have operated.

“It is a miracle the mega-site project survived this,” said Sam Simpson, founder of Simpson Commercial, a real estate firm based in Greensboro, who worked with Powell on the mega-site project.

Simpson said Powell sold the mega-site idea to Jim Melvin, head of the Joseph M. Bryan Foundation, a former mayor of Greensboro and a member of the board of directors at PTP. Powell hired Simpson and attorney Robert David Joseph to oversee the land acquisition and development of the mega-site, Simpson said. But once the team was in place, Powell was not very involved in the mega-site project, Simpson said. Simpson brokered the deals and Joseph handled PTP’s legal work.

“He handed it off to us,” Simpson said. “And then, he was off to Triad First Capital.”

Triad First Capital was an investment fund started by Powell under the PTP regional economic development umbrella. According to Simpson, Powell planned to target companies with aging owners and match these companies with younger investors and provide capital for transition of ownership.

“There were a lot of people who were skeptical,” Simpson said. “I remember we met with a lot of companies, but never did anything.”

“Everyone was shocked looking around the room, first of all we didn’t think he was capable of doing that,” when the alleged theft was discovered, Simpson said. The discovery created a hurdle at a critical time in the mega-site deal, he said. The long-standing, local, individual reputations of Melvin, Joseph, and himself, convinced investors the accusations were “isolated to David (Powell), and gave us the benefit of the doubt.”

Powell became toxic in the business community. Simpson said the last time he spoke with Powell he said “There is a perfectly good explanation for everything that’s happened.” Simpson told him he hoped so and that “we couldn’t be associated with each other anymore until this is cleared up.”

Andy Dreyfuss, former fund director of the Piedmont Angel Network (PAN), worked briefly with Powell when PTP absorbed the capital investment fund. Dreyfuss expected PTP to raise PAN’s profile in the investment community. Powell promised to lower their operating costs. Dreyfuss remembers Powell told him, “Well, tell me what your operating expenses are, I think I can help you with that.”

Dreyfuss began to think it wasn’t a great fit, as Powell focused investment in already established companies and less on start-ups. Powell was also frustrated by some of the procedural controls imposed by PAN’s board of directors, Dreyfuss said. A few months before Powell resigned from PTP, he ended the relationship with PAN. He told Dreyfuss PTP’s board didn’t want to do it anymore. Dreyfuss said Powell often “waffled and changed” his focus week to week.

“We were very appreciative of PTP,” Dreyfuss said. “It probably wasn’t a great fit.”

Forms filed with the NC Secretary of State reveal Triad First Capital LLC., Triad Advisors LLC., Whitaker Park Studios, LLC., Alpath LLC., and a dozen other companies related to the mega-site deal, and other development projects, were incorporated by David Joseph, attorney for PTP. Many of those companies have now been dissolved. Joseph, reached by phone, cited his legal duty to PTP and declined to comment.

The structure of creating separate corporate entities is not unusual in a development project, said Alan Ferguson, a real estate lawyer in Greensboro, who leads a group of homeowners opposed to the mega-site in Randolph County. He said it can be advantageous to have a company whose only purpose is to build a skyscraper, or apartment building “that doesn’t have any involvement in anything else.”

Alpath LLC, for example, took title to one of the mega-site properties before disappearing, Ferguson said. “We don’t know what happened with Alpath, Alpath started up and took title to one of these megasite properties and then just kind of disappeared. Alpath was mentioned in a couple of the documents early in the megasite effort, but it has sort of gone away. So we don’t really know what’s happened with that.”

Ferguson said he heard at some point that PAN was going to be contributing capital to the mega-site project, but it never panned out. This kind of corporate shell game, in the context of the megasite, and other development projects, can be completely sinister, or completely innocent, depending on how you look at it and what controls are in place, he said.

“I’m not crazy about it, it’s less open than they might think. It makes it harder to follow the bouncing ball.” !