Here we go: The Ellis administration unraveling

UPDATE: We'll be updating throughout the day. The latest story is here with Ellis saying he's confident the grant money was spent appropriately and he doesn't fear any criminal repercussions.
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Smoke starts to become fire. So far the feds are only talking (in a letter just made public) about civil actions against the city. But "misuse of funds" and "false statements" sound criminal to me.

Developing story:

Former Mayor Jack Ellis' administration has been accused of misusing federal funds and making false statements to government officials, according a letter to the city from U.S. Attorney Max Wood's office.

The government wants much of the grant money back, as well as civil penalties that altogether could reach in excess of a $1 million, the letter states. The letter doesn't mention any potential criminal actions but states that the Ellis administration told the federal government that "the city had spent the funds in accordance with the terms of the grant."

"All those certifications were false," the letter states.

This is straight from the letter:

"I have recently met with an investigator for the Office of the Inspector General. As a result of their investigation, I find there is evidence to support the conclusion that approximately three hundred fifty thousand dollars of the award was applied in ways that were contrary to the terms of the grant. During the grant period of performance, officials certified that the city had spent the funds in accordance with the terms of the grant. According to the evidence developed through the investigation, all of those certifications were false."

Folks, there's a reason I've had about $900 worth of open records requests about this grant sitting in a box for the last three years. We always saw some shady things in the way the money was used, but could never quite connect the dots. It sounds like someone has connected them, and that someone is the United States government.