Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, January 17, 1992 TAG: 9201170113
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: VICTORIA RATCLIFF STAFF WRITER
DATELINE: LENGTH: Medium
SHERIFF TOOK FUNDS SENT TO DEPARTMENT, AFFADAVIT CHARGES
Bristol Sheriff Marshall Honaker diverted for his own use hundreds of thousands of dollars he was paid to house federal prisoners in his jail, an affidavit filed in U.S. District Court in Roanoke charges.Honaker used the money to buy a house, cars, furniture and certificates of deposit for his children; and pay for personal loans and insurance policies, according to the affidavit, which was made public Thursday.
Since January 1987, Honaker - who resigned Wednesday as president of the National Sheriffs' Association - has diverted more than 70 percent of the money he has received to house federal prisoners in the Bristol City Jail, the affidavit states. The money was to a bank account listed in his name and that of his wife, Brenda J. Honaker.
FBI and Internal Revenue Service agents searched Honaker's home and office last Friday but declined to comment on the investigation. The affidavit, however, outlines the allegations against Honaker, who controls the operation of one of the largest federally accredited prisoner-holding facilities in Southwest Virginia.
According to the affidavit, federal agents suspect Honaker is guilty of tax evasion, money laundering, federal program fraud and mail fraud.
Honaker, who has an unpublished telephone number, could not be reached for comment Thursday. He has not been charged with any crime.
The affidavit, sworn by IRS Special Agent Jack Bumgardner, relates the following details:
The investigation of Honaker began after law enforcement officers learned there had been a recent increase in his personal wealth that could not be explained by known legal sources of income.
For example, in 1989 - when Honaker earned $46,940 and his wife earned $7,225 - he bought and paid for a $265,000 home.
The money is suspected to have come from checks he was receiving for housing federal prisoners - primarily for the U.S. Marshals Service in Roanoke and for the government of the District of Columbia.
The federal money that the Bristol Sheriff's Department received for housing prisoners supplemented the traditional state and local funding it received. The department had entered into contracts with a variety of government agencies to keep prisoners on a "per-prisoner, per-day" basis.
The most lucrative of those contracts was an agreement with the District of Columbia, under which the department received $55 per prisoner per day. It costs the department only $6 a day to care for each prisoner, the affidavit states.
The money paid on the contracts ultimately belongs to the city of Bristol. But by maintaining a double set of books, Honaker was able to divert a portion of the payments from these contracts to a personal checking account of his own.
From 1986 to 1990, the department received almost $513,000 from the U.S. marshals in Roanoke and the District of Columbia for housing prisoners. During that same period, Honaker returned about $135,000 to the city coffers and deposited almost $378,000 in his personal checking account.
Returned checks to the U.S. Marshals Service in Roanoke show that checks deposited into Honaker's personal account bore only the endorsement of the sheriff's office, whereas other checks bore the endorsement of both the sheriff's office and the city of Bristol.
Honaker did not report any of the additional income on his tax returns.
The largest disbursements from his account were for the purchase of his house and two $10,000 certificates of deposit in the names of Honaker's children in 1989. Money from the account also was used to buy a new 1987 Chevrolet pickup truck and a new 1989 Toyota sedan.
Honaker also used money from the account to pay for renovations to his home and to rental property he owned, according to the affidavit.
The affidavit states that Honaker said in a 1990 newspaper interview that contract prisoners had become such a substantial source of revenue to the Sheriff's Department it had been able to reimburse the city of Bristol for its share of the costs to operate the department during the past two fiscal years.
Because of that revenue, Honaker also was able to claim that his department was the only one in the city's history to be self-sufficient, the affidavit states.
Honaker, 55, who has been the city's sheriff for 18 years, has taken a leave of absence until the investigation is completed. Chief Deputy Charles Arnold has taken charge of the office.
In their search last Friday, federal agents seized Honaker's home, three personal vehicles and private bank accounts, in addition to numerous boxes of files from both the Sheriff's Department and the Bristol Courthouse.
Honaker was named president of the National Sheriffs' Association in June 1990 at the group's annual meeting in Minneapolis. His term was to expire this June at a meeting in San Diego.