Politics & Government

Federal prosecutors investigating Louisville nonprofit’s use of public money

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The federal government is investigating how its money was spent at a Louisville nonprofit that trained troubled youths for entry-level jobs in the horse industry.

The Bluegrass Training and Therapy Center, which operated a 20-acre farm in southwestern Jefferson County, worked with scores of teenagers committed to the custody of the Kentucky Department of Juvenile Justice for various offenses. The state paid for those services, at least in part, with juvenile accountability grants from the U.S. Department of Justice.

However, the state terminated its contract with the center last year pending “ongoing investigation actions,” according to records released by the Kentucky Justice and Public Safety Cabinet, which oversees the Department of Juvenile Justice.

Officials declined to provide much information about the investigation.

“The cabinet is committed to rooting out any threat to taxpayer resources,” spokesman Mike Wynn said in a prepared statement. “Our internal investigations branch has worked aggressively to identify and investigate a matter of concern, and we appreciate our partners in law enforcement, who are working with us to ensure the public’s interests are protected.”

Wynn referred further questions to federal prosecutors.

Stephanie Collins, spokeswoman for the U.S. Attorney’s Office in Louisville, confirmed an investigation of the Bluegrass Training and Therapy Center, but said she could not provide details about possible allegations, other than “it involves federal dollars.” No criminal charges have been filed at this time, Collins said.

Jay Wilkinson, who helped found the center in 2011 and served as executive director, said Tuesday the center has done nothing wrong.

“I would love more than anything to talk to you about this, but I need to ask my attorney if it’s OK first,” Wilkinson said. “Obviously, there are limits on what I can say right now. We have done nothing wrong, and I have nothing to hide. We are turning over all of our bank records voluntarily.”

According to the most recent data available, from 2014, the center had a $1.1 million budget and employed 28 people at some point during the year. It reported serving 104 youths from January 2013 to February 2014, the majority of whom had lived in “high-crime neighborhoods” prior to being placed in state custody.

The center offered a training facility with horses so youths could learn the skills necessary for an entry-level job after they were released from state custody. It also provided housing a short walk from the facility.

“Although we are a young agency, we have assembled a seasoned group of administrators and staff with many years of experience and dedication to achieve what matters to us most: the successful discharge of your youth as they re-enter the community,” the center says on its website. “No other program that we know of offers exclusively to the Department of Juvenile Justice a combination of services that range from employment and after-school training to transitional living.”

Wilkinson and three other members of the center’s governing board were owed a cumulative $163,022 they individually loaned to provide money for start-up and operating expenses, according to the nonprofit’s 2014 tax returns.

The Department of Juvenile Justice is responsible for holding youths committed to state custody after arrests or convictions for crimes or lesser status offenses. It also runs prevention programs for at-risk teens.

In February, the agency’s commissioner, Bob Hayter, resigned after the death of 16-year-old Gynnya McMillen at the Lincoln Village Regional Detention Center in Hardin County. The coroner ruled that Gynnya died from a rare heart condition. But an investigation later determined that multiple DJJ employees failed to perform mandatory bed checks and falsified their logs around the time of her death.

John Cheves: 859-231-3266, @BGPolitics