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Young Accused of Defrauding Partners in City-Funded Business Incubator

An affidavit released by Lake Wales Police and the District State Attorney’s office Monday afternoon contains new details in the case that has resulted in the arrest of Charles Young, CEO of BizLinc, a city-funded business incubator in Lake Wales.

Young was arrested on two felony counts by Hillsborough County Sheriff’s Deputies at a Lithia residence on Saturday, to be transferred to Polk to face the charges.

Young was a partner in Florida Development Corporation. FDC received a three-year, $1.2 million no-bid contract with the City of Lake Wales in July, 2022 to operate the incubator, based partially on Young’s credentials. The city was using the $7 million in Federal funds received as part of the Recovery Act, which must be directed to economic development projects.

According to the affidavit, Young’s business partners in Florida Development Corporation, Derrick Blue and Efrain “Frank” Cornier, reported to local police that Young had refused to share access to the corporation’s books with them, and had been abusing a shared American Express card account. Some $322,002.99 was paid to American Express by Young, mostly without his partner’s knowledge, they assert.

The affidavit does not specify what the missing funds were spent on.

The partners further claimed that Young had increased his own rate of pay after all three agreed that each would earn $87,550 from the business during the contract period, or $2,823 each two-week pay period.

Jacob Raines of the Lake Wales Police Department reported that his review of corporate documents indicated that Young was paying himself well over $4,000 each pay period, well in excess of the amount agreed.

Raines’ affidavit says that “CFO Charles Young did knowingly and intentionally engage in a scheme to defraud and thereby obtained monies belonging to FDC.”

Young has been charged with obtaining property by fraud, grand theft, $50,000, and a second count of grand theft of $100,000 or more. Both counts are first-degree felonies.

Lake Wales News had raised questions about the BizLinc operations in February after a public records request for the quarterly reports called for in the contract with the city produced only a single-page spread sheet document that was little more than pre-contract projections of numbers of participants. No financial reports were included..

The contract with the city was based on FDC’s offer to the city. No other proposals were considered at the time. The contract was signed by Mayor Jack Hilligoss for the city, and Cornier as president of FDC, but there were no personal guarantees attached, and little descriptive language relating to the details of operations or reporting of financials during the contract. Cornier did not use his legal name in signing the contract.

No financial statements were presented to the city during the 18 months of the contract, during which time FDC drew payments of $500,000 and $400,000 from city coffers.

The News investigative report raised multiple issues that sparked doubts about the quality of the advice the business was offering to clients depending upon their guidance. Following that story Blue and Cornier engaged in a vigorous public relations campaign in defense of their incubator, calling upon their clientele to defend them.

City Manager James Slaton then received permission from the city commission to conduct an audit of the FDC incubator operation by an Orlando CPA firm, which is ongoing.

 

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