A former North Carolina state legislator and Winston-Salem City Council member was sentenced to five years of probation along with monetary penalties after pleading guilty to fraud for spending money from the homeless center organization he had led for personal use.
U.S. District Judge Loretta Biggs on Thursday accepted the guilty plea by Derwin Montgomery, 34, contained in an agreement he signed last fall to one count of program fraud. Fourteen other counts from an indictment filed against him last year were dismissed.
Biggs ordered Montgomery to pay $38,618 in restitution to the Bethesda Center for the Homeless and $22,270 for his probationary supervision, the Winston-Salem Journal reported. He was also placed on home detention for 120 days.
Montgomery served as the center’s executive director for six years before he resigned in early 2021. The center had received at least $10,000 in federal assistance from the U.S. Small Business Administration in 2020, a court document shows.
"This is a serious case because it involves the abuse of the public trust," Assistant U.S. Attorney Joanna McFadden told Biggs in court. "Taxpayers in this country should know that their money is being used appropriately by nonprofits who receive federal money."
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Montgomery, a Democrat, was elected to the Winston-Salem City Council in 2009 while a student at Winston-Salem State University. He moved to the state House in 2018 to fill a vacancy and won a two-year term later that year. He was a unsuccessful primary candidate for the 6th Congressional District seat in 2020.
Montgomery told Biggs in court that he was sorry for what happened.
"This is hard," Montgomery said. "I regret my actions that brought me here. I ask for your grace in this matter." Biggs said she was moved by letters from local residents urging her to give Montgomery probation.
A court document that served as the factual basis for the plea agreement said Montgomery converted center funds for his own personal use starting in or around 2018 and through 2020. They included about $5,100 related to Montgomery’s travel and over $6,500 for the lease of an SUV.
In 2020, Montgomery charged the center about $23,000 related to marketing and media services purportedly performed by his own company in contravention of conflict of interest policy, and despite the center already receiving such services as a charitable donation, the document said.
The indictment had alleged Montgomery charged the shelter for airfare to Cancun, Mexico, for a vacation with a romantic partner, stays at luxury hotels, and expenses at a strip club in Las Vegas.
