Most of the $157,500 payment Micro-City Government received from the sale of Race Street property in 2006 was given to convicted sex offender Ron Berry, who founded and led the non-profit youth program, officials said Wednesday.
The Herald-Leader reported in 2007 that Micro-City Government's board of directors had sold the properties, which included a former community center, to LP Young Homes LLC. The sale raised concerns in part because Micro-City Government had been dissolved by the secretary of state's office years earlier, and because board members were unable to account for the funds.
After the newspaper published an initial story, the board's actions were investigated by the state attorney general's office and Fayette County Commonwealth's Attorney Ray Larson's office. Larson said Wednesday that his office found nothing wrong with the sale.
"We spent quite a long time, because it took us a long time to get records on this thing, but there were no charges," he said.
Micro-City board member Nathan Sullivan told the newspaper in 2007 funds were used to pay off debt, but he declined to say what the debt was.
Larson said Wednesday investigators determined part of the funds was paid as a commission fee to someone who helped facilitate the sale. The rest, about $136,000, was used "by the board of directors to pay what they thought was an obligation to pay retirement to Ron Berry," he said.
When he received the funds, Berry already had completed a three-year prison sentence. He had been convicted in 2000 of 12 counts of sodomy involving Micro-City participants. Larson's office prosecuted the case.
Sullivan confirmed Wednesday that the funds were used for Berry's retirement. Berry, reached by phone, said he had no comment.
In 2012, the property was sold by LP Young Homes to Fleetwood Land Management LLC, an investment firm owned by Lexington businessman Mike Scanlon. Scanlon ordered the demolition of the former Micro-City Government Community Center as part of his plan to clean up the area and present it to potential developers.