Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, June 13, 1995 TAG: 9506130070
SECTION: VIRGINIA PAGE: B-1 EDITION: NEW RIVER VALLEY
SOURCE: KATHY LOAN STAFF WRITER
DATELINE: PEARISBURG LENGTH: Medium
FBI and bank authorities have been tight-lipped about the investigation, which is at least 3 months old.
But a letter from a Giles County official to the Virginia State Police confirms that the banker being investigated is Harold Chafin, who was a senior vice president of the National Bank of Blacksburg and continues to serve as chairman of the county's IDA.
The letter, written in March by Richard Chidester, the county attorney and Giles' assistant commonwealth's attorney, asks for "an investigation into what appears to be a misappropriation of funds from a bank account" of the IDA.
County Administrator Janet Tuckwiller said Monday that state police wrote back that federal authorities already were conducting an investigation. And, she said, it does not appear that any money was lost by the IDA.
No charges have been filed. Chafin could not be reached for comment, but his daughter and Radford lawyer Max Jenkins, who has represented him on another matter, say Chafin has not been informed of the specifics of the investigation.
Bank officials said earlier this month that the transactions in question are few in number and do not involve large amounts of money. The bank discovered problems and reported them to authorities, but the bank itself is not under investigation, they said.
Sheree Davis, Chafin's daughter, said that her father deposited money in the wrong account while he was working for the bank and reported it to his supervisor. It was just a mistake, she said, and the bank let him stay on another six months before retiring.
Chafin apparently was reassigned from Pearisburg to the Blacksburg bank offices, but bank attorney Marilyn Buhyoff would not say when that happened.
Jenkins said Chafin had mentioned hearing about the investigation in a TV news report. "As far as being given any specifics, no one's told us what or how or anything," Jenkins said.
Jenkins said he asked federal authorities for details, but was told they weren't allowed to talk to a lawyer during an investigation.
The IDA transaction being looked at revolves around an account that was closed last year after auditors recommended the county have stricter control of all accounts.
Tuckwiller said the county had an Industrial Development Authority fund, but the IDA also had two accounts of its own.
The county's auditor had recommended that the accounts be consolidated, and that was done last August.
"I think over the years there's been some concern about the record-keeping," Tuckwiller said.
Tuckwiller said the Board of Supervisors decided to ask for an investigation in March because of "statements being made of tampering ... to individual accounts." Tuckwiller said Chidester recommended that the IDA account at the National Bank of Blacksburg be examined.
This is what Chidester laid out as grounds for an investigation in the letter to state police:
The IDA opened an account with National Bank of Blacksburg in April 1994 and closed it in September 1994. In late May of that year, $12,361.66 was withdrawn from the account by an internal bank debit and deposited into the account of Arnco Inc., a contracting business with offices in Narrows.
In late August, the IDA treasurer wrote a check for $297,873.34 - the amount that should have been in the account - to close the account. The bank honored the check, although there was less than that in the account.
On Sept. 6, "the account of Arnco Inc. was debited and the $12,361.66 was deposited back into the IDA account to cover the overdraft," according to the letter.
While Arnco had performed work for the IDA, Tuckwiller said, no payments had been authorized by the county when the transfer was made.
While the county's letter to state police never names Chafin, it says the IDA's chairman also was a senior vice president at the bank "and would have had the ability to make the internal debits which [occurred] in this case."
And, the letter states, the county "does not have conclusive proof of how these transactions occurred."
According to the letter to state police, the account debits were made in two different offices of the bank in Blacksburg, not in Pearisburg.
Chafin was named Citizen of the Year in 1991 by the Giles County Chamber of Commerce. He was cited for his leadership in the county's quest for state certification as a business community and for community involvement. In 1990, the chamber tapped Chafin as its Businessperson of the Year.
Staff writer Jan Vertefeuille contributed information to this story.
Memo: NOTE: Ran on B-4 in Metro edition.