Former Lawrence Mayor Jeremy Farmer soon may be facing criminal charges related to a host of alleged financial misdeeds while he was executive director of the local food bank Just Food.

Representatives of the nonprofit board for Just Food told the Journal-World Wednesday that their own investigation and examination of financial records alleges that Farmer made unauthorized payments to himself of more than $52,000 in salary and benefits over a two-year period. The alleged overpayments are in addition to more than $61,000 in federal and state payroll taxes that went unpaid while Farmer served as the executive director of the food bank.

Board members have asked their attorney to forward their findings to law enforcement officials for possible criminal charges against Farmer.

“I have contacted law enforcement and expect to be providing them with detailed information,” said Lawrence attorney Dan Watkins, who is representing the board on the matter.

Among the allegations made by the Just Food representatives:

• Farmer made unauthorized payments to himself of $5,250 in wages and retirement benefits in 2013. In 2014 he paid himself $24,192 in additional wages, retirement benefits, phone allowances and gasoline stipends. In 2015, prior to his resignation, he paid himself $19,592 more in wages, retirement and expense allowances.

• Farmer filed an inaccurate federal tax return on behalf of the organization. Unbeknownst to the board, Farmer filed a federal tax return in May when IRS agents visited the Just Food offices. The tax return could subject Farmer to federal perjury charges.

“We know the numbers in the return were not accurate,” Watkins said. “Whether it was perjury, we don’t know yet.”

• Farmer manipulated Just Food’s financial records in a manner to conceal the overpayments, and also to conceal the fact that he had terminated the services of the organization’s professional accounting firm. He also withheld information from the board about IRS notices regarding the past due taxes.

The financial misdeeds have put the survival of Just Food in jeopardy, officials said. The board says it needs to raise $60,000 by early October to clear its tax debt, or else the organization likely will face institutional bankruptcy and will dissolve. Board members thus far have individually contributed more than $10,000 to the IRS tax debt, and the organization has made an initial $13,000 payment to the IRS.

Board members said they are committed to doing all they can to save the organization.

“There is every intention to keep this organization open,” said Nancy Thellman, who is a Douglas County commissioner and who began serving on the Just Food board in February. “Folks are working hard to serve the people that Just Food was made to serve.”

The organization has established an online fundraising campaign to accept donations to pay Just Food’s tax debt. It is at: crowdrise.com/keepthepantrydooropen.

An IRS agent later this month is expected to decide whether to pursue legal action to force both current and past officers of the board to make payments on the past due taxes.

Farmer resigned his seat on the Lawrence City Commission on Aug. 12, two days after he resigned from his Just Food post amid the revelation that payroll taxes had been left unpaid. Representatives of Just Food said they have had no contact with Farmer since his resignation and do not know his whereabouts. The Journal-World also has been unsuccessful in locating Farmer since his resignation.

Board members speak

Several board members on Wednesday spoke out for the first time since Farmer’s resignation. Thellman, as a Douglas County commissioner, had worked closely with Farmer on several projects while he was on the City Commission. Thellman said it has been “heartbreaking” to see the impact of Farmer’s actions on Just Food and its volunteers, staff and clients. She called Farmer’s alleged actions a “betrayal of people who offered their time and services out of the goodness of their hearts.”

“I think a lot of people are still wondering how so many of us could be fooled,” Thellman said. “From the least of us to the greatest, we all drank the Kool-Aid. But I think the point comes when we have to stop wallowing in that, and we have to get to the productive work of keeping food on the shelves and the doors open.

“I don’t know what the rest of the community is feeling, but I think the board is past the victim mode and we’re getting on with the work of fixing this.”

Brandon Deines, a board member of Just Food since February, said he was stunned to hear of the alleged misuse of funds.

“He seemed to be very genuine about the mission of Just Food,” Deines said. “I couldn’t fathom that he did this, but I got over that pretty fast. The organization is facing a pretty tough point right now, but I feel like there are a lot of committed people to see this through.”

None of the 12 members of the board has resigned since the allegations came to light.

Myrone Grady, a board member of Just Food since February, said he felt both angry and betrayed upon learning of Farmer’s actions.

“I’m kind of a battler,” Grady said. “I know the need is not going to go away, no matter how much egg we may have on our face as a board. I hope people, though, put the blame where it belongs.”



Oversight questions

Questions about how Farmer’s actions went undetected by the board for about two years, however, surround the organization.

Board members on Wednesday acknowledged that a 2013 audit had not been completed by its due date. The audit normally would have been completed by November 2014, but board members were unaware that an audit had not been completed until representatives with the United Way of Douglas County — a major funder of Just Food — told the board that it had not received a required audit. A firm was hired in early 2015 to complete a 2013 audit. It was not clear Wednesday what, if anything, that audit found regarding Farmer’s alleged financial misdeeds. The board expects to have an audit of 2014 finances completed by early November.

Board members said they received financial reports at each monthly meeting, but it is now clear, they allege, that the financial reports had been altered to mislead the board. For instance, the financial statements showed that an accountant was still being paid for services when in fact the accountant had been terminated. Financial entries also were altered, the board alleges, to hide data that would have revealed payroll taxes had not been paid. Information that was unclear to the Journal-World on Wednesday is what level of oversight the board or its officers had in terms of the actual checks or automatic withdrawals that were being made against the organization’s bank account.

Thellman said she believes a public deconstructing of the incident will be helpful, in time.

“I could really see when we are past this crisis the value of a lessons-learned type of meeting or seminar where there is a chance to reflect on what happened, what has been learned and what has been gained,” Thellman said.

Watkins, whose law firm specializes in dealing with troubled financial organizations, said board members were placed in a tough position by Farmer’s deceit.

“When you have a bad actor, there is always damage before you discover it,” Watkins said. “When they act to willfully deceive you, it takes awhile to discover it. I have served on a lot of boards, and you rely upon your executive director to provide you good information and factual information. When that doesn’t happen, it creates problems.”



Just Food’s survival

In addition to the $60,000 that needs to be raised by early October to clear the organization’s tax debt and penalties, representatives estimated the organization has $22,000 of overhead expenses per month to keep the food bank operational.

“There are many phases to this,” Thellman said. “The first phase is to get the taxes paid, and then we have to pay our monthly expenses for what is really a very small staff. This current plea (for funding) won’t be the only plea, but it may be the most important plea.”

Thellman said she envisions that if the organization is able to stave off bankruptcy, it likely will have to make operational changes to survive.

“It might look like a little bit different organization on the other side of this,” she said. “We may have to scale down, at least for awhile. We have a lot of work to do to make it a sustainable organization.”

But Thellman said the current board has no interest in shutting down the organization.

“We are all about keeping the doors open,” Thellman said.



Farmer’s whereabouts

The Journal-World made several attempts to contact Farmer on Wednesday.

Farmer did not return phone messages or answer the door at 1135 Randall Road. Mail was strewn on the porch, and a notice from Westar Energy that service had been disconnected at the residence was tucked in the door.

Farmer rents the property. The listed property owner did not return calls Wednesday.

A next-door neighbor said he had not seen Farmer “since all this trouble started.”

A secretary at Kansas University School of Law said Farmer’s mother, Lori Farmer, who is an administrative associate there, was not in Wednesday afternoon. No one answered the door at her home.

Jessica Beeson, a Lawrence Board of Education member, said she did not know how to reach Farmer and had not heard from him since he resigned. Beeson served on the Just Food board for three years.

“I don’t know where he is, and I don’t have a real interest in talking to him myself,” Beeson said.