Former Fay-Penn finance director accused of theft one month after filing whistleblower lawsuit
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Former Fay-Penn finance director accused of theft one month after filing whistleblower lawsuit
Melony Reed, 49, of Morgantown, W. Va., is accused of using Fay-Penn’s credit cards to pay for personal expenses. Police said she admitted to buying personal items, including candy and Christmas lights. She also told police she mistakenly used her company credit card to pay nearly $3,000 for veterinarian bills for her pet. Her preliminary hearing is scheduled for Monday in front of Daniel C. Shimshock District Judge Daniel Shimshock. She is currently out on a signature bond of $20,000, according to her attorney. In a lawsuit filed in April, Reed contended she was fired from Fay- Penn after she reported concerns about conflicts of interest by board members and other misconduct. The suit alleges that officials at the nonprofit used that as a pretext to fire her when she brought up concerns about improper loans and violations of laws governing nonprofit organizations. In October 2024, an independent auditor found $16,940.36 in expenses not related to the nonprofit.
State police accused Melony Reed, 49, of Morgantown, W. Va., of using Fay-Penn’s credit cards to pay for personal expenses, including household products, veterinarian bills and alcohol. However, in a lawsuit filed in April, Reed contended she was fired from Fay-Penn after she reported concerns about conflicts of interest by Fay-Penn board members and other misconduct.
The criminal complaint, filed last month, alleged that between August 2023 and October 2024, Reed borrowed credit cards from multiple Fay-Penn employees, claiming she had not received her company card yet. Those employees reported purchases from retailers like Walmart and Amazon that they believed to be fraudulent, police said.
Fay-Penn Executive Director Timothy Flecker also reported that several purchases from the organization’s Amazon account were sent directly to Reed’s home in West Virginia.
In October 2024, Glenn Valdiserri was hired as an independent auditor to review the nonprofit’s books. Police said he found $16,940.36 in expenses not related to the nonprofit.
According to Fay-Penn’s website, Valdiserri is now the agency’s director of finance.
When they interviewed Reed, police said she admitted to buying personal items, including candy and Christmas lights, using her Fay-Penn credit card. She also told police she mistakenly used her company credit card to pay nearly $3,000 for veterinarian bills for her pet, court paperwork indicated.
Reed is also accused of forging the signature of Fay-Penn’s senior accounting assistant on a form from PNC Bank that was related to allegedly fraudulent charges.
In an emailed statement, Flecker said Reed was fired when they learned about the alleged theft.
Reed’s lawsuit stated she “inadvertently” used her Fay-Penn credit card in November 2023 to pay about $3,000 for an emergency veterinarian visit. The suit indicated she told her bosses the following day and they agreed she could pay the money back in installments.
The suit alleges that officials at the nonprofit used that as a pretext to fire her when she brought up concerns about conflicts of interest, improper loans, and violations of laws governing nonprofit organizations.
Reed claimed that Fay-Penn turned down qualified community members applying for specialized loans and instead awarded them to active board members. The suit also alleged that Fay-Penn’s loan officer Ben Siebart told her “it was close to impossible for an applicant to receive a loan if said applicant was not a Fay-Penn board member or affiliated with such a member.”
Reed’s lawsuit claimed about 70% of the loans made by Fay-Penn were a combination of internal and board loans while only around 30% of the loan funds were used for “external individuals and businesses.”
In the lawsuit, Reed said she first reported concerns about wrongdoings to Fay-Penn’s former executive director Laura Kuhns, and then to Ed Scherer, an outside auditor in August 2023.
Reed said after a meeting with executive board members she was placed on administrative leave without pay beginning on Oct. 10, 2024, citing an investigation into personal purchases made with the organization’s credit card.
On Oct. 16, 2024, Fay-Penn terminated Reed’s employment citing violations of company standards, a reason she claims was pretextual and retaliatory for her reports of misconduct.
On Friday, state Rep. Charity Grimm Krupa issued a release urging the state attorney general’s office to conduct an independent investigation of Fay-Penn, citing allegations in Reed’s lawsuit.
“These allegations strike at the very heart of what nonprofit economic development organizations are supposed to stand for,” Krupa said. “Fayette County has struggled with long-term economic decline. Taxpayer-supported development funds are meant to be invested in our people, our businesses and our future — not redirected for personal gain. If these claims are true, they represent a profound betrayal of public trust.”
Reed’s criminal attorney Kenneth Jay Haber did not return a call for comment on Friday.
Reed is charged with theft and forgery. She is currently out on a signature bond of $20,000. Her preliminary hearing is scheduled for Monday in front of District Judge Daniel C. Shimshock.