After KSAT reports, state funding suspended for nonprofit AS which used money for travel, smokehouse, land for hemp
A San Antonio nonprofit that provides assistance to pregnant women and young parents has had its state funding suspended after an investigation by the KSAT 12 Defenders found it used the money for trips , a smokehouse and land later registered to produce industrial hemp.
A state official confirmed Monday that A New Life for a New Generation suspended its taxpayer-funded reimbursements on Dec. 23, a day after the release of the second part of the Defenders investigation. Last year, that figure was over $1 million.
A source close to the funding cut said a majority of New Life staff were also made redundant in late December, after the KSAT Defenders report made the spending public for the first time.
While executives say the nonprofit provides material assistance such as diapers and infant formula and program services such as counseling to families in San Antonio, New Life financial records showed that She also funded several out-of-state trips and a smokehouse business owned by the nonprofit’s president and founder. , Marquica Reed.
Reed did not respond to inquiries sent to his personal and New Life email accounts.
“Using state money for personal gain”
The Texas Attorney General’s office became aware of financial irregularities within New Life in a complaint filed in mid-October. The suit accused Reed of “using money received from the state and donors for his own personal gain.” These types of expenses are prohibited by the taxpayer-funded public health program that provides the majority of New Life’s money.
In response to a public request for information from defenders, the attorney general’s office released a copy of the complaint and background information it had compiled on New Life. However, agency officials did not respond to multiple inquiries about the status of the case.
New Life’s reimbursements, which regularly exceed more than $100,000 a month, come from the Texas Health and Human Services Commission’s Alternatives to Abortion program.
Funding is provided to trustees, in New Life’s case, the Texas Pregnancy Care Network (TPCN), which then disburses money to nonprofits in the form of reimbursements for services provided.
Contacted by email last week, TPCN executive director John McNamara declined to comment on New Life’s status, but that his agency is “still reviewing the allegations made against its contractors.”
An HHSC spokeswoman, however, confirmed late Monday that TPCN had suspended repayments, which make up the vast majority of New Life’s funding.
Purchase of land for hemp production
Financial records provided to Defenders by a New Life source — covering January 2020 through September 2021 — have raised questions about how the nonprofit spent state reimbursements as well as funds from two Federal Paycheck Protection Program loans.
In late March, a New Life executive issued a check from his account to Daryl Wayne Shelton for $25,000 for “purchasing property.”
The warranty deed for the vacant West Side lot, located at 6743 Buena Vista St., was finalized Aug. 20 and signed to Reed by Shelton for $25,000, according to a Bexar County Clerk’s filing. containing their two signatures.
Shelton told Defenders last year that Reed said she wanted to use the property to store New Life vehicles, but also said she planned to build a house there for her grandchildren.
Texas Department of Agriculture records, however, showed that the property at 6743 Buena Vista St. was instead registered in late August by a member of Reed’s family to be part of a hemp production program of the state.
The license, which runs until the end of August 2022, allows the property to be used to produce industrial hemp.
The license lists the business registered as “Marquica R. Reed, 6743 Buena Vista, San Antonio, TX 78227”.
Reed posted a photo of the hemp license on his Instagram page on October 19 with the caption, “I can now grow CBD.
R&J CBD Smoke and Vapor Lounge
Public records show Reed filed company formation paperwork for R&J CBD Smoke & Vapor Lounge in early June, listing himself as the owner.
The Smokehouse, located at 137 S. Acme Rd., is about a block from the New Life Commerce Street headquarters.
A builder hired last summer to renovate R&J confirmed to the Defenders that she accepted a $2,000 check from New Life on July 10, which was signed by Reed, in payment for work done at the smokehouse.
The builder, who asked that the Defenders not use her name, said she took measurements and photos at the New Life’s Commerce Street location but never did any work there of renovation.
Builder Earl Greenwood told Defenders in a recorded telephone interview that he accepted a check for $20,000 written to him by New Life in late March for ‘water damage repair’, even though he had never done this type of work.
Instead, according to Greenwood, he cashed the check at New Life’s bank and returned the money to Reed, who then gave him about $1,000.
“I went through it, what is it, Woodforest Bank. I got that money back and gave it back to him,” Greenwood said. say, they hired someone else to do the job.
The owner of the Commerce Street location in New Life told the Defenders in a separate telephone interview that he had paid for repairs to the water damage, which stemmed from the winter storm in February.
In addition to the questionable checks, financial records also show that New Life funds were used to pay for airfare, hotel reservations and limos for out-of-town trips that Reed, members of his family and some New Life employees attended in 2020 and 2021, as well as for entertainment.
Purchases of questionable vehicles
Deeds from the nonprofit show Reed last January agreed to sell her organization a red 2015 Dodge Charger she owns in exchange for $35,000.
At the time of sale, the Charger had 82,000 miles, according to records.
The same day the bill of sale was drawn up, Reed received a New Life check for $10,000 for a “deposit for the vehicle.”
Through the end of September 2021, Reed had collected checks for the vehicle, its registration renewal and maintenance totaling more than $32,100, according to New Life records.
State title records, however, show the Charger was still in her name and she originally purchased it in 2019 for just $21,982.
Kelley Blue Book, a vehicle appraisal company, quotes a fair market price for this stylish vehicle with more than 80,000 miles on its odometer of $18,560, about half the amount New Life promised to pay. pay to Reed.
Footage captured by the Defenders last year showed the Charger wrapped in the New Life logo and the rear portion of its body now painted pink.
Federal records show New Life received two Paycheck Protection Program loans totaling $139,600.
The first PPP loan for New Life, in the amount of $56,600, was approved in August 2020 and deposited into the non-profit organization’s main account in early September of the same year.
Days before New Life received funds for the first PPP loan, records show the organization purchased a three-wheeled Polaris Slingshot motorcycle from a local dealership.
A “You Owe-We Owe” document from the dealership obtained by Defenders and bearing Reed’s name and signature, contains Reed’s home address and personal email account, but does not mention the nonprofit .
Photos and videos of the bike appear frequently on social media, especially when it is being ridden by a member of Reed’s family.
The second PPP loan, for $83,000, was approved last January and deposited into New Life’s account in late March, according to financial records.
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