Former Atlanta CFO indicted by federal grand jury
A federal grand jury handed down an eight-count indictment against Atlanta's former chief financial officer, charging him with illegally using city funds to buy custom-built machine guns and "stealing tens of thousands of dollars of the public’s money," federal prosecutors said.
Jim Beard, who was Atlanta's CFO from November 2011 to May 2018, and was a member of the Municipal Securities Rulemaking Board from 2016-2018, was also charged Wednesday with wire fraud, federal program theft, making a false entry on a U.S. government application and obstruction of Internal Revenue Service tax laws.
“Jim Beard allegedly abused his position as one of the most powerful executives in the city of Atlanta to commit federal crimes for his own gain, including stealing tens of thousands of dollars of the public’s money, possessing machine guns that members of the public cannot have, and obstructing an IRS audit,” said U.S. Attorney Byung Pak.
Government leaders have an obligation to act ethically, Pak said, adding, "as alleged by the grand jury, Beard fundamentally betrayed that obligation.”
Beard was hired by former Mayor Kasim Reed in October 2011 and remained as CFO until he was asked to resign by Mayor Keisha Lance Bottoms, shortly after she was sworn into office Jan. 3, 2018. During his career, Beard also worked at the former Howard Gary & Co., a Miami-based municipal finance and investment firm.
Scott R. Grubman, Beard's attorney, said he disagreed with "various allegations" in the indictment, although he offered no specifics.
"As the chief financial officer for the city of Atlanta, Mr. Beard either served as the lead for, participated in, or advised with, numerous major transactions and projects for the city, which required him to take a number of authorized trips to facilitate the successful closing of those transactions," Grubman said. "He also facilitated purchases by city departments, including the Atlanta Police Department.
"Mr. Beard looks forward to his day in court, where we are confident that all of the facts will come out and completely clear Mr. Beard of any wrongdoing," said Grubman, a partner at Chilivis Grubman Dalbey & Warner in Georgia and a former assistant U.S. Attorney.
A spokesperson for Bottoms said the allegations against Beard are "very serious and disappointing" and the city will continue to help prosecutors in their investigation.
"This administration will continue to take steps to deter wrongdoing and strengthen the public trust," the mayor's spokesperson said, adding, Bottoms has already placed restrictions on city credit card use, appointed Atlanta's first chief transparency officer and created an Office of Inspector General.
Federal prosecutors allege that in addition to misusing a city credit card, between 2015 and 2017 Beard "embezzled, stole, obtained by fraud/knowingly converted and intentionally misapplied" at least $10,000 of city funds obtained through a federal program.
Beard allegedly ordered two custom-built machine guns and had them delivered to Atlanta City Hall. He took possession of them and then had the city issue a $2,641.90 check to pay for them, according to the U.S. Attorney's office for the Northern District of Georgia.
He then submitted a U.S. Department of the Treasury tax exemption form, in which he "falsely certified" that the machine guns were for the exclusive use of the Atlanta Police Department, prosecutors said.
Although investigators didn't estimate how much in city funds Beard allegedly took, they provided a series of examples of expenses they uncovered, including using a city credit card to pay more than $1,350 for a hotel room at the St. Regis Hotel in Atlanta for himself and his wife, who lived in Florida.
The hotel stay included $200 per night for an upgraded room, $70 for private dining and $80 for rose-petal turndown service. At the time, Beard lived in Atlanta.
Beard allegedly used the city's credit card to pay more than $3,800 for hotel rooms at the J.W. Marriott Hotel in Chicago for his step-daughter while she attended the Lollapalooza Music Festival in 2015 and 2016. Beard was not in Chicago those times, prosecutors said.
"Beard kept thousands of dollars paid by third parties to reimburse Beard for travel-related expenses to attend conferences and meetings, even though the city of Atlanta paid for Beard’s travel, and Beard never filed travel disclosure reports to notify the city of Atlanta that the reimbursements had been paid," said investigators.
In 2013, while earning a salary of $221,108 as CFO, Beard said in a financial disclosure statement under penalty of perjury that he was not self-employed or employed by any other entity besides the city. On his federal income tax return for that year he claimed he owned a personal consulting business that incurred more than $33,500 in business losses, according to prosecutors.
When his tax return for that year was audited by the IRS, Beard submitted receipts that falsely claimed he incurred airfare, hotel, and meal expenses related to his personal consulting business, however, those expenses were paid with the city's credit card, the allegations contend.
Before working in Atlanta, Beard was director of compliance and revenue for the clerk and comptroller’s office in Palm Beach County, Florida.
Before joining Palm Beach County, he was the principal consultant of his own financial services firm, and before that he worked at Howard Gary.