Posted on 11/22/2002 5:46:30 AM PST by GailA
As Madisons answer charges, more loom
By Marc Perrusquia perrusquia@gomemphis.com November 22, 2002
John and WillieAnn Madison appeared in federal court Thursday to answer charges that they misused public funds intended to help poor children.
In Nashville, lawyers prepared for a hearing today on a related civil lawsuit involving the dissolution of Cherokee Children and Family Services, the nonprofit agency that WillieAnn Madison, 62, ran as executive director.
And Memphis's long-running day care investigation appeared to be gaining steam, with the possibility of more criminal charges soon.
The indictment against the Madisons stems from the couple's involvement at Cherokee, a nonprofit corporation that received up to $2.4 million a year from the state to act as Shelby County's child-care broker. Cherokee screened poor families seeking government assistance for day care costs.
John Madison, 57, was the agency's bookkeeper.
On Thursday, U.S. Magistrate Judge James Allen released the couple on their own recognizance, but not before they surrendered their passports and left the courtroom in handcuffs.
They spent several hours in the Clifford Davis Federal Building for processing before leaving about 3 p.m.
Allen set a Dec. 4 arraignment when the couple are expected to enter pleas to charges that include fraud, embezzlement from a federally funded program, money laundering, income tax evasion and filing false returns.
Prosecutors allege the couple illegally siphoned at least $578,000 out of the program, money the government will try to recoup through court-ordered forfeiture.
The couple showed little emotion as Allen read charges in the 29-page indictment, a feat that occupied 12 minutes. WillieAnn Madison sat stony-faced, chewing gum, while her husband fidgeted.
Virtually the only words spoken by the couple during the half-hour hearing came when they told Allen they understood their rights and the charges against them.
Representing WillieAnn Madison, lawyer Ruby Wharton told Allen that John Madison will hire his own attorney.
"I'm working on it," John Madison said.
As federal marshals led the couple away, Wharton declined comment.
"Mrs. Madison asks that she be accorded the presumption of innocence as is provided by our system of justice,'' Wharton said later in a written statement. After studying the indictment, "we will make her position known through the appropriate means established by our laws and court rules."
Wharton inherited the matter from her husband, attorney A C Wharton, who represented WillieAnn Madison during a grand jury investigation before he won election in August as Shelby County mayor.
The Madisons' indictment Wednesday capped a 3d-year state and federal investigation into Memphis's government-funded child-care industry, launched after two toddlers died July 21, 1999, in sweltering day care vans.
Through civil actions by Tennessee Atty. Gen. Paul Summers and criminal filings by prosecutors, officials have painted a picture of a system corrupted by misplaced priorities, where profits come first and children second.
Records reviewed by The Commercial Appeal this fall following a landmark Tennessee Supreme Court ruling showed executives at the state-funded Cherokee spent more than $250,000 on foreign and domestic travel, taking trips to Paris, Hawaii, Las Vegas and Cancun, Mexico, as well as a Caribbean jaunt aboard a Carnival Cruise liner.
In 1999 alone, John and WillieAnn Madison tapped more than $940,000 in salaries, fees, rent and other payments from Cherokee, a public benefit corporation with a stated mission to help disadvantaged children.
Financial records released by the Supreme Court ruling buttressed earlier findings by Summers that WillieAnn Madison used Cherokee's credit card for lavish items, including hats and apparel, kitchenware, Mont Blanc pens, perfumes and body lotions.
The Madison indictment came six days after a state grand jury charged WillieAnn Madison's sister, day care operator Phyllis Herring, with felony theft. As with the Cherokee case, that indictment followed a lawsuit by Summers, this one alleging that Herring "looted" South Memphis Child Development Center Inc., a government-funded nonprofit.
Neither Dist. Atty. Gen. Bill Gibbons, who is prosecuting Herring, nor U.S. Atty. Terry Harris, who is prosecuting the Madisons, would comment when asked if more people would be charged.
But they acknowledged that they are coordinating efforts, and that their investigations remain open.
"I don't want to go into detail. But you know which day care centers the state attorney general's office has filed civil actions on," Gibbons said late Wednesday. "So you can make your own conclusions" about the direction of the investigation.
Summers also has filed suits to dissolve Jack and Jill centers, run by John Madison's sister, and the Little People's chain, run by the Madisons. Summers has another suit open against the Children's Palace chain, which was operated by the late County Commissioner James Ford.
Gibbons also has not resolved investigations into government-funded food programs at several Memphis day care centers, including Koinonia Baptist Church Child Care Center, overseen by former Cherokee board chairman Roosevelt Joyner.
- Marc Perrusquia: 529-2545
Yet another example of our tax dollars at work.
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