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Lawsuit says Kansas City development agency controller lied about his past, stole millions

The Economic Development Corporation of Kansas City is an influential organization that has shaped commercial development in the city.
Carlos Moreno
KCUR 89.3
The Economic Development Corporation of Kansas City is an influential organization that has shaped commercial development in the city.

The Economic Development Corporation of Kansas City sued Lee Brown, claiming he misrepresented nearly every fact about his professional life to get the job and then used his position to steer agency funds to his bank account.

When Lee Brown applied to the Economic Development Corporation (EDC) of Kansas City to oversee the agency’s finances in 2015, he said he held degrees in law and accounting, had worked at a prestigious accounting firm and earned a license as a certified public accountant.

Discrepancies about Brown’s past surfaced during his background check, but the EDC hired Brown anyway. In his position as the EDC’s controller, Brown held considerable influence over how money flowed for a nonprofit that oversees several powerful agencies that grant tax breaks and make deals for development projects.

But Brown did not have the degrees he said he held. He never worked at PriceWaterhouseCoopers. He did not have a CPA license.

Instead, Brown was a criminal, having served time in prison for stealing money during a short stint working at Union Station as well as for forgery in Johnson County, among his other encounters with law enforcement.

Brown also stole, or caused to be misappropriated, nearly $2.4 million during his time at the EDC by diverting funds to personal bank accounts for his own use or to others, and tried to conceal what he had done by altering the agency’s bookkeeping records and misleading its auditors.

That’s all according to a lawsuit filed Friday in Jackson County Circuit Court by the EDC and some of the agencies it supervises. The lawsuit accuses Brown and former interim chief executive T’Risa McCord of breaching their fiduciary duties, among other things.

Former federal prosecutors Patrick McInerney and Dan Nelson, now in private practice with the Spencer Fane law firm, represent the EDC in this lawsuit. The Industrial Development Authority, an agency overseen by the EDC, is represented by Andrea McMurtry and Robert Horn of the Horn, Aylward & Bandy law firm.

The accusations mark another public embarrassment for the EDC, an organization that has played a significant role in reshaping Kansas City’s skyline through hundreds of development deals that it and its agencies have facilitated.

The EDC is the umbrella organization over agencies like the Tax Increment Financing Commission, the Planned Industrial Expansion Authority and the Land Clearance for Redevelopment Authority. Each has various powers they can exercise, ranging from tax breaks for development projects to eminent domain.

Meetings of EDC’s board and its various agencies for years have been active affairs, attracting influential business people and the press to watch the formation of deals like those that helped the Power & Light District and Union Hill become reality.

In more recent years, the EDC operated without a permanent chief executive. Last year it fired McCord for misappropriating the agency’s funds. And there have been questions in the past about how well the EDC handled and tracked its money.

Now accusations in a lawsuit suggest that the EDC hired someone who misrepresented nearly every fact about his professional life and allowed him to continue working with so little oversight that he managed to steer at least $2 million in funds that belonged to the agency and used much of it for himself.

McCord could not be reached for comment. A letter with questions was left at her door on Thursday. Brown died in April 2022, nearly a year after submitted his letter of resignation to the EDC. At her home on Thursday, Brown's widow said she was “just finding out about all this” and declined to comment further.

New EDC president and chief executive Tracey Lewis also declined to comment.

Kansas City Mayor Quinton Lucas said he was disappointed that former senior EDC leaders "lied about this misconduct for several years."

"Once learning of their bad acts, City leaders working with the EDC board hired independent counsel to uncover all situations of wrongdoing and has now launched legal action to recover any misappropriated taxpayer funds," Lucas said in a statement. "Under new leadership, the EDC is committed to full and complete transparency as it supports Kansas City businesses in building a strong future for the people of our city.”

What follows is a summary of the accusations from the EDC’s lawsuit.

A failed background check

Brown’s 2015 application to the EDC for its controller position relayed impressive credentials. It said he held an accounting degree from the University of Missouri and graduated from Howard University with a law degree and a grade point average of nearly 3.7.

The application said Brown worked as a tax manager at PricewaterhouseCoopers, often referred to as PwC, from 1992 to 2001 and later as a controller for a furniture company. He held a CPA license in Missouri and furnished a license number in his application.

“In reality, nearly every item in his application was false,” the lawsuit said.

The CPA license number Brown provided in his application belonged to someone else with the same last name.

When the EDC asked Brown to fill out an authorization for a background check, he put down that his name was Raphael L. Brown and provided a Lenexa address, even though his application materials referred to himself as Lee Brown living at a Kansas City address.

A company the EDC hired to perform background checks noticed that the social security number did not match Brown’s name. Brown provided the same information for a second try and still no match turned up. On the third try, Brown provided a nearly identical social security number – one digit was changed – which matched with someone named Raphael B. Brown, different from any of the names in his application materials or background check authorization.

McCord received emails about these discrepancies, but recommended that the agency hire Brown anyway. By the end of 2015, McCord sent Brown an offer letter to work at the EDC with an annual starting salary of $85,000.

“When KCEDC approved Defendant Brown’s hiring – including because Defendant McCord did not verify any of his background information – it believed that Defendant Brown was ‘Raphael’ Lee Brown, a CPA and attorney with extensive experience at Price Waterhouse Cooper (sic) and Surfacetech,” the lawsuit said.

A proper effort at vetting Brown’s background would have turned up a history of criminal and civil matters brought against him.

For example, Brown started working at Union Station in 2007 as its controller. Union Station suspended Brown a month after he started his job when it learned he falsified information in his background check, according to a probable cause statement written by the Kansas City Police Department in 2009.

A subsequent investigation found that Brown used a Union Station credit card to make unauthorized purchases in the amount of nearly $3,000, including at a bar in Grandview.

In 2013, Brown pleaded guilty to a charge of felony stealing and served 120 days in prison, followed by two years on probation. That same year, Brown pleaded guilty to a misdemeanor charge of fraudulent use of a credit card in Johnson County, Missouri.

Also in 2007, the Johnson County District Attorney charged Brown with nine counts of felony forgery and one count theft of more than $25,000. He pleaded guilty to some of the charges and received a 14-month suspended sentence. Johnson County online court records show he spent two years and six months in custody after several violations of his probation and for failing to show up to court hearings.

The Jackson County lawsuit filed this month outlines other civil and criminal cases against Brown, including unpaid taxes and fraudulent use of a credit card.

‘I lived a pretty good life’

The lawsuit suggests that EDC employees knew little, if anything, about the true nature of Brown’s life.

For example, the lawsuit said that Brown told his colleagues that his one marriage ended in a divorce and that he had no children. But Brown had been married three times — his third marriage began in 2013, before he started work at the EDC, and lasted until he died last year — and had three children.

The larger deception occurred with his handling of EDC funds.

In 2020, the Industrial Development Authority (IDA), an agency overseen by the EDC, received $206,056 from the Missouri Attorney General’s Office. That amount represented the IDA’s portion of a larger settlement reached by the attorney general in a lawsuit against Switzerland-based UBS AG Bank for alleged manipulation of the London Inter-Bank Offered Rate, or LIBOR, a benchmark interest rate for global banks.

Brown deposited the attorney general’s check into an EDC bank account. The next day, he wired the same amount from the EDC account to a Wells Fargo bank account Brown controlled.

McCord, who by that time became the EDC’s interim chief executive, received a call from the EDC’s bank to double-check the validity of the wire transfer request. The EDC’s bank completed the wire transfer to Brown’s bank after McCord verified it.

Later in 2020, the IDA received $790,300 in fees from the issuance of bonds to finance the new Kansas City International Airport Terminal. A few days later, City Hall in Kansas City accidentally sent the EDC a wire for the same amount.

Ultimately, Brown transferred $790,300 from an IDA account to his Wells Fargo account, creating a hole in the IDA’s finances that Brown covered up with bogus accounting entries.

The lawsuit alleges that Brown on several occasions diverted funds belonging to the Land Clearance for Redevelopment Authority, another agency overseen by the EDC, to his personal accounts.

The lawsuit also said that Brown wired money from other EDC funds and initiatives, including federal coronavirus relief funds.

The EDC believes Brown diverted agency funds for his own use.

Brown sent the EDC his resignation letter in 2021.

The EDC fired McCord later that same year after discovering that McCord changed the agency’s policies to delete a prohibition against paying family members without board permission. Records at the time showed that McCord paid her husband a total of $1,400.

She also received a $15,000 loan from the EDC without board authorization.

McCord repaid the loan and said the agency’s accusations against her at the time amounted to a smear campaign. She said at the time she never acted without the board’s knowledge.

Overall, the EDC claims Brown caused a total of $3.1 million in losses from his activities. That amount includes the salary and retirement he received after misrepresenting himself to land his job; the money he allegedly diverted from the EDC, money he helped McCord obtain for herself and her family and a $200,000 life insurance policy for which he paid the premiums with EDC money. The lawsuit said the insurance policy paid out to his widow in September, five months after Brown died.

Brown’s online obituary is written in the first-person. In it, he refers to himself as Lee “Bryce” Brown. His name, according to a Jackson County marriage certificate from 2013, was Lee Arthur Brown.

The obituary said he graduated from college — it didn't say which one — and spoke of his love for cars and his attire. The lawsuit against him claimed he appropriated EDC funds to buy cars, clothes and jewelry, among other things.

“I’d have to say I lived a pretty good life,” Brown’s obituary said. “I had a job I loved with great co-workers I will miss.”

This story comes from the Midwest Newsroom, an investigative journalism collaboration including IPRKCUR 89.3Nebraska Public Media NewsSt. Louis Public Radio and NPR.

Steve Vockrodt is the former investigative editor for the Midwest Newsroom.
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