A federal judge has dismissed six of 28 charges filed against Mary Treadwell, former director of a real estate spinoff of Youth Pride Inc., in an alleged scheme to steal and misappropriate thousands of dollars from federally funded, low-income housing projects she helped manage.
U.S. District Court Judge John Garrett Penn threw out late Tuesday all but one of seven counts charging Treadwell with mail fraud. Still remaining are the charges of conspiracy, making false statements to the federal govrernment, wire fraud, and tax evasion.
Treadwell has pleaded not guilty to all charges. Her attorney has asked Judge Penn to throw out the conspiracy charges and order a separate trial on the tax evasion charges pending against her. Penn has yet to rule on those requests.
The original grand jury indictment, filed more than a year ago, alleged that Treadwell, an accountant and three other officers of the real estate spinoff, P.I. Properties, portrayed the organization as a charitable, nonprofit business, when in fact they used it to fund their own enterprises and pay personal expenses in violation of law.
The grand jury alleged that the five conspired to destroy or alter financial books and records, file false reports with the government, launder money through various companies and bank accounts, and obstruct access by the government to correct financial data.
All charges against one of the other defendants were dismissed earlier at the request of the government, and three other defendants have pleaded guilty to some of the charges against them.
This week's ruling on the mail fraud charges centers on deeds for real estate allegedly bought with funds diverted from Clifton Terrace. The government had contended that the transfer of the deeds by mail was part of the alleged fraud, but the judge, after hearing arguments last Friday, ruled that the mailing had taken place after the time during which the funds were allegedly diverted.
"Since the alleged scheme had been achieved prior to the mailings, they were not sufficiently related to the fraud to fall within the scope of the mail fraud statute," the judge ruled.