Cleared of embezzlement, ex-Princeville mayor facing Medicaid fraud allegation

Yet, Everette-Oates' legal troubles might not be over.

The state Department of Health and Human Services suspended all Medicaid reimbursements on Aug. 12 to her behavioral counseling firm, D-POM LLC, citing "a credible allegation of fraud," such as billing for services not provided. According to DHHS records obtained by WRAL News, Medicaid paid D-POM $1.2 million from January 2013 to August 2014, while another $151,000 in Medicaid reimbursements was rejected.

The State Bureau of Investigation began investigating D-POM in January 2014 at DHHS's request, said Pam Walker, a spokeswoman for the state Department of Public Safety. Prosecutors haven't yet reviewed the SBI's findings, she said.

Everette-Oates vehemently denied any wrongdoing with regard to Medicaid, and her supporters contend state officials are out to get her.

"This whole case was a political assassination of her. They wanted to take her out of business, take her out of the public service," attorney Charles Bonner said.

An Edgecombe County grand jury indicted Everette-Oates two years ago in 17 counts of embezzlement by a public official. The indictment alleged that she rang up $5,634 in unauthorized charges on a town credit card between August 2010 and January 2012.

Last week, prosecutors dismissed all charges after receiving "new information" that they have declined to specify.

"I just want to say I was innocent from Day One," Everette-Oates said Tuesday to a cheering crowd of supporters.

She and Bonner said they were finally able to substantiate that the spending was related to her official duties.

"How are you going to develop if you don't go out and meet the people with the money?" Bonner said.

In order to clear her, they said, they had to obtain a court order requiring the state Local Government Commission to turn over town records the agency seized in 2012 when it took over Princeville's finances when the town was over budget and in danger of defaulting on a loan.

"The evidence was always there. The truth is never newly discovered. It's always the truth," Bonner said. "It was a travesty of justice."

Walker said the SBI began investigating the mayor's spending in April 2013 at the request of Edgecombe County District Attorney Robert Evans because of a critical state audit.

The audit, which followed the Princeville takeover by the Local Government Commission, found $8,115 charged to a town credit card with no receipts to substantiate the spending, including charges to Bed Bath & Beyond and a high-end steakhouse. Auditors also said Everette-Oates received $3,289 for travel expenses that weren't documented.

Bonner suggested Everette-Oates might sue state officials for false prosecution.

"There is a debt, and the debt must be paid," he said.

Everette-Oates, who lost her re-election bid three months after she was indicted, declined to comment on her political future.