WINSTON-SALEM, N.C. — On Tuesday, a federal grand jury indicted Derwin Montgomery on wire fraud charges.
The indictment comes after a lengthy investigation by the Federal Bureau of Investigation.
They accuse Montgomery of embezzling upwards of $23,000 from the Bethesda Center for the Homeless in Winston-Salem. The indictment stated Montgomery stole the money during his time as the center's executive director, between 2015 and 2020.
Along with the indictment, the court issued a warrant for Montgomery's arrest. It set his bail at $100,000.
Montgomery appeared in court on September 7 and pleaded not guilty to all 15 charges against him.
The FBI says Montgomery frequently charged the Bethesda Center for the Homeless (BCH) for what he said was BCH business:
"Montgomery charged BCH for certain expenses that he represented were incurred in the course of BCH business, all while knowing that they were personal in nature."
The FBI says, between 2018 and 2019, Montgomery claimed a handful of charges to the BCH were for "travel, lodging and staff training". The indictment continues, accusing Montgomery of using that money for a vacation to Cancun, Mexico with a romantic partner; luxury hotels in Los Angeles, Charleston, SC and Washington DC, as well as a gentlemen's club in Nevada.
The indictment lists several specific charges in this 2018-2019 window:
- June 2018: $1,666 for a flight from Charlotte to Cancun
- July 2018: $360 for a flight from Charlotte to Seattle
- November 2018: $828 for a flight from Charlotte to Los Angeles
- November 2018: $1,076 for a luxury hotel in Los Angeles
- March 2019: $260 for services at the Sapphire Las Vegas Gentlemen's Club
Montgomery was also accused of charging the BCH $54,865 for personal use of a 2020 GMC Yukon Denali for what he claimed was for "shelter operations."
The FBI accuses Montgomery of funneling even more money to a media company he owned, UPLIFT Media LLC. It says Montgomery charged BCH $23,000+ for "marketing, audio/video contracting and media services". However, the FBI claims either "no services were provided or the charges associated with services were grossly out of proportion to the value of the work performed".
Between March 2020 and November 2020, Montgomery charged BCH nine times for services from UPLIFT Media LLC, totaling $19,750.
BCH had a financial policy that all expenses exceeding $5,000 required approval from a member of the BCH Board of Directors. The FBI claims Montgomery intentionally kept his charges to BCH below that threshold so he could avoid oversight from that board.
Linda Jackson Barnes, the President of the Bethesda Center Board, wrote in a statement the Montgomery's employment with BCH ended in December 2020.
She continued, "Bethesda expresses its appreciation for the work by the U.S. Attorney's Office for the Middle District of North Carolina and the Federal Bureau of Investigation on this matter and looks forward to a resolution of the charges set forth in the indictment."
Jackson Barnes also wrote that the Bethesda Center would update its financial policies, specifically around reimbursement.
She wrote, "Bethesda has enhanced its reimbursement policies and internal controls concerning claimed business-related expenses. Bethesda also has hired an outside accounting firm to manage all of Bethesda's financial operations, including the administration of grants, expense reimbursement, credit card payments and payroll."
Derwin Montgomery served as a Winston-Salem city councilmember from 2009 to 2018. He served as a North Carolina State House Representative for District 72, from 2018 to 2020. He ran for U.S. House in 2020 but lost in the democratic primary to Congresswoman Kathy Manning who went on to win the general election.
Montgomery is also listed as a pastor at First Calvary Baptist Church in Winston-Salem.
Neither the city of Winston-Salem nor First Calvary Baptist Church have responded to request for comment on the charges against Montgomery.