Habitat for Humanity sues Corbin businessman

Habitat for Humanity is suing a long-time Corbin businessman, who was indicted earlier this year for allegedly taking more than $27,704.58 belonging to the charity.
Habitat for Humanity International Inc. filed suit Monday in Whitley Circuit Court against Robert “Rocky” Carter Jr. and Cumberland River Valley Habitat for Humanity Inc, which is an affiliate of the international group.
On Feb. 14, the grand jury charged Carter, 50, with 24 counts of theft by failure to make required disposition of property over $300, two counts of theft by deception over $300, and for one count of being a second-degree persistent felony offender.
Carter had initially been scheduled to stand trial Nov. 7 on the criminal charges, but court officials recently postponed the trial until March 6.
“Currently, the Affiliate lacks a functioning board of directors, and there is no supervision or accountability for Carter,” the lawsuit asserts. “In light of the indictment, Carter cannot be trusted to manage the assets of the Affiliate without supervision.”
The lawsuit seeks to dissolve Cumberland River Habitat for Humanity, for a turnover of all corporate and financial records for Cumberland River, and for recovery of the conversion of corporate assets.
The lawsuit also asks for the appointment of an overseer, who would take control of the funds and records until they are transferred among other responsibilities.
Judge Jerry Winchester is scheduled to hear a motion by Habitat International Dec. 4 concerning the appointment of a receiver in the case.
Carter’s lawyer, David Hoskins, said Monday afternoon that he couldn’t comment on the lawsuit because he hadn’t had a chance to review it yet.
According to the lawsuit, Cumberland River Valley Habitat for Humanity Inc. was formed on March 20, 1992 as an affiliate, or quasi-independent chapter of Habitat for Humanity.
From 1993 through 1995, the affiliate built two houses in Whitley County and one in Knox County for needy families.
“On information and belief, some time between 1996 and 2005, the Affiliate ceased to operate as a bona fide non-profit corporation, ceased to conduct its operations in accordance with Habitat policies, ceased to communicate with the parent Habitat organization, and ceased to cooperate with Habitat’s oversight and supervisory procedures,” the lawsuit alleged.
“On information and belief, some time between 1996 and 2005, Carter commenced operating the Affiliate, not as a public charity and not in accordance with Habitat policies, but for his own private use.”
The lawsuit alleges that by 2004, Cumberland River’s board of directors consisted only of Carter in contravention of the bylaws, which required at least 12 directors.
Cumberland River also violated its bylaws by not having monthly and annual board of director’s meetings, and for not requiring co-signatures on checks in excess of $250, the lawsuit claims.

Indictment allegations
In all, Carter is accused of taking more than $27,704.58 that was the property of Habitat for Humanity.
The theft by deception charges stem from allegations that Carter took a total of $3,000 from Marty and Bridget Jordan from May 6, 2005, through June 1, 2005, upon the promise he would construct a house for them, but failed to do so, according to his indictment.
The theft by deception charges are related to one of the theft by failure to make required disposition of property charges, and involve $4,800 converted to the Knox Land Company on March 18, 2005.
The other theft by failure to make required disposition of property charges alleged that from August 2002 through May 2005, Carter was the custodian of funds for the Cumberland River Valley Habitat for Humanity. The indictment alleges that he intentionally converted money meant for Habitat for Humanity for his own use or benefit by writing checks, according to the indictments.
According to the indictment, Carter wrote a $6,000 check to Carter and Associates for his own benefit on Jan. 31, 2005, and a $3,980 check to American Express among others.
The indictment alleges that various checks were written to Carter and Associates, various credit cards and banks, and to two other individuals.
“Should Carter be convicted of theft, Habitat and the affiliates are entitled to a judgment ordering Carter to return the stolen funds,” the lawsuit maintains.

Failure to turn over documents
The lawsuit claims that since Sept. 7, 2005, Carter and his attorney have failed to or refused to furnish any documents to Habitat International to confirm the local chapter is operating properly.
The lawsuit alleges that the local affiliate has ceased construction operations, and that Carter cannot be trusted to handle the payoff of a loan on one local habitat home that the owner desires to sell.
The lawsuit further claims that as an officer and director of the local habitat affiliate, Carter filed false annual reports and tax returns on behalf of the affiliate by fraudulently listing as directors, people that weren’t directors during the period the reports and returns were for.
“He has borrowed money on behalf of the Affiliate from a financial institution based on the false and fraudulent representation that the loan was approved at a meeting of the Board of Directors, when in fact no meeting ever took place,” the lawsuit alleged.