JB McCuskey Story Archives - West Virginia Public Broadcasting

State Recovers Nearly $1 Million From Check Fraud Scheme

State officials report that more than $1 million was stolen from the Department of Health and Human Resources in a check fraud scheme. Roughly 85% of the stolen funds have been recovered so far.

State officials recovered more than $966,000 from a fraud scheme involving paper checks and a state agency, according to state Auditor JB McCuskey during a Friday press conference.

After the Department of Health and Human Resources (DHHR) sent more than $1 million in checks to a Texas vendor, it was soon intercepted as part of a fraud scheme.

Fraudsters now under investigation used a chemical agent to remove the vendor’s name from the DHHR’s checks and redirect the funds to their own accounts.

Details on the incident — like the individuals responsible, and a timeline on when the fraud and investigation occurred — remain scarce, because McCuskey said the investigation remains ongoing.

So far, approximately 85 percent of the stolen funds have been recovered by McCuskey’s office, alongside investigators with the state treasurer’s office, the U.S. attorney’s office, the governor’s office, the West Virginia State Police and Truist Bank.

Agencies involved in the investigation described the recovery of stolen funds as a success story, but one that points to deeper concerns.

“Unfortunately, in the world we live in, there are a lot of fraudsters. They are very creative,” said Truist Regional President Patrick O’Malley. “It continues to be the number one risk in the banking industry.”

McCuskey said that particular risk to the state comes from the use of paper checks to transfer large amounts of money. These can be more easily redirected by outside parties, he said.

Since taking office in 2017, McCuskey said he has made a concerted effort to reduce the number of paper checks sent by state agencies. On Friday, he urged current state officials to consider opting for electronic forms of payment instead.

“If you haven’t signed up for electronic funds transfer, please do so,” he said. “You’re actually doing yourself a favor. But more than that, you’re doing the taxpayers of West Virginia a favor because it makes our jobs in finding fraud much, much easier.”

United States Attorney for the Southern District of West Virginia Will Thompson said that instances of check fraud have been growing nationwide.

“It’s happening with obviously the state of West Virginia, but it’s also happening in private industry and private individuals,” he said. “I want to make people aware of it.”

Thompson said his office will continue to pursue a criminal investigation into the perpetrators of the fraud. He has not yet provided a timeline for the investigation or said what charges will be filed.

W.Va. State Auditor McCuskey Exits Governor’s Race, Enters 2024 Attorney General Campaign

State Auditor J.B. McCuskey announced Monday he has dropped out of the governor’s race and is now running for attorney general.

State Auditor J.B. McCuskey announced Monday he has officially dropped out of the governor’s race and is now running for attorney general.

In changing campaigns, the former delegate and two term state auditor said he realized he was behind in the polls and fundraising in a primary race for governor that included a U.S. Senator’s son, Del. Moore Capito, R-Kanawha, businessman Chris Miller, current Attorney General Patrick Morrisey and current Secretary of State Mac Warner. McCuskey said seeking the AG’s office was a better goal.

“I looked at the offices,” McCuskey said. “I believe that the combination of my experience as the executive of one of the largest constitutional offices in the state of West Virginia, with my extensive legal background, makes me an ideal candidate to be the next attorney general.”

McCuskey says his nearly $700,000 campaign war chest stands strong in running against the other republican AG candidates, State Sens. Ryan Weld, R-Brooke, and Mike Stewart, R-Kanawha. He came in fourth in fundraising for the governor’s race, showing $412,083 cash-on-hand.

That’s a good deal more than his two AG primary opponents.

Stating he’s a strong and principled conservative, McCuskey said the AG’s office acts as the state’s lawyer for all of the agencies, all of the boards and commissions, and all the constitutional officers.

“As the person that managed all the finances for every single one of those agencies,” he said. “Often dealing in the legal realm as to what is legal and what is possible, I think that being the state’s lawyer with all those relationships is going to be a huge help.”

McCuskey said he wants “to continue what Patrick Morrisey has accomplished over his time as attorney general that has been wildly successful.” He said his campaign will focus on being a consumer protection advocate, civil rights protector, criminal justice reformer and empowering the state’s public defender service.

“We have worked long and hard in our office to make sure that they’re getting paid very quickly,” McCuskey said. “We need to make sure that we’re paying them appropriately so that we can have a great public defender’s office to ensure all of those duties are running smoothly.”

J.B. McCuskey lives in Charleston, with his wife Wendy, and daughters Martha and Charlotte.

Senator Asks Feds For CARES Money Investigation

Senate Finance Committee Chairman, Sen. Eric Tarr, R-Putnam, is questioning if Gov. Jim Justice has violated federal law and has requested the federal Office of the Inspector General to investigate.

Updated on Monday, March 20, 2023 at 5:50 p.m.

Senate Finance Committee Chairman, Sen. Eric Tarr, R-Putnam, is questioning if Gov. Jim Justice has violated federal law and has requested the federal Office of the Inspector General to investigate.

At issue is the movement of $28,375,985.43 in CARES Act funding to a special account controlled by the governor’s office for non-COVID-19 related expenses.

Congress passed the Coronavirus Aid, Relief, and Economic Security Act in 2020 at the beginning of the pandemic to provide aid to individuals struggling with job loss. The state of West Virginia received $1.25 billion in aid as well, but it came with stipulations on how the state could spend the money as well as time limitations.

In a Senate Finance Committee meeting on Feb. 3, during the regular session of the West Virginia Legislature, the governor’s chief counsel, Berkeley Bentley, explained that the governor approved the transfer of the money to his discretionary fund.

Testimony indicated the money was to be used for COVID-19-related expenses for the Department of Corrections and Rehabilitation. Jeff Sandy, the secretary of the Department of Homeland Security, testified that prior to this transfer, the department did have COVID-19 expenses, but it had already been reimbursed for that expense. After that transfer, only an additional $280,721 was transferred to the Department of Corrections.

State Auditor J.B. McCuskey testified that the transfer was unusual for its type and amount for this fund. Previously, the largest transfer into the fund was $250,000. One of the most notable uses of the money was $10 million to Marshall University for the baseball stadium.

Tarr sent his letter to the Office of the Inspector General in Washington, D.C. asking for a response regarding concerns about the ethics, legality and risk of any future clawbacks of the money by the federal government.

Letter-from-Senator-Tarr-to-Office-of-Inspector-General-Letter-03-20-23 Download

In an emailed statement from the governor’s office, Press Secretary C.J. Harvey said, “This letter is simply a regurgitation of old news. Unfortunately, Senator Tarr can’t let it go. The Governor’s Office firmly believes that all transactions involving the use of CARES Act funds were legal and appropriate. Decisions on the use of funds were made with the advice of legal counsel and two national CPA firms, including one who completed an independent audit and found no issues.”

Senate Finance Investigates Governor’s Donation To Marshall For New Baseball Stadium

The Senate Finance Committee wants to know how $10 million in CARES money ended up being donated by Gov. Jim Justice’s administration to Marshall University for its new baseball stadium.

The money was donated to the university from the governor’s Gifts, Grants and Donations Fund, and was transferred into that account days before the federal deadline to spend CARES funds.

Senate Finance Chair Sen. Eric Tarr, R-Putnam, questioned why a total of $28 million of CARES money was transferred to the gifts account in the first place, given the qualifying expense for the money was listed as the Division of Corrections and Rehabilitation.

“I understand that we still have National Guard in our corrections facilities and we have 1,000 FTEs [full-time employees] unfilled in our corrections facilities and we have a request for a $200 million deferred maintenance to go to corrections,” Tarr said.

“We’re under that state of emergency right now, and when you transfer the last $28 million, which doesn’t come close to covering any of those corrections expenses, the governor decides to put it into a discretionary account and then start putting AstroTurf on baseball fields. I want to ask you what part of that is appropriate,” Tarr said to Berkeley Bentley, general counsel to Justice.

Bentley told the committee that as special federal revenue, the money could only be transferred into a special revenue account.

“When the state reimburses itself, there is no direction under federal law or state law that directs where that money goes. It could not go into the governor’s civil contingent fund, rather it had to go to a special revenue account, and the most likely candidate was the gifts and grants fund,” Bentley replied.

“And ultimately a baseball field,” Tarr said.

Earlier this week, the Senate Finance Committee heard directly from the Division of Corrections and Rehabilitation about their $200 million deferred maintenance costs, including at least $27 million worth of locks that need to be replaced across the system.

Bentley told the committee that the transfer was made to officially spend the CARES money by the Sept. 30 deadline, and avoid returning the money to the federal government. Once the qualifying expense was paid, he said the state can use those funds for any legal purpose.

“We spent $1.25 billion. We did that, and we transferred it out. It’s no longer CARES, but the money is still available for any lawful purpose,” Bentley said. “The money was transferred over to pay the invoices we hadn’t received yet, not timely, what have you, but it’s also available for any other purpose that is legal under state law, no longer subject to the CARES Act requirements.”

Tarr also called on State Auditor JB McCuskey to discuss the process around the fund transfer. Under questioning from Tarr, McCuskey categorized the requested transfer of funds as “unusual.”

“We were working with cities and counties a lot to try to make sure that they were able to obligate their funds legally to ensure that the money that was given to us was spent on things that were legal,” McCuskey said. “Our office processes thousands of transfer requests a week probably … but this was a large number. And I was unfamiliar with the fund, but prior to that request, and you know, pretty obviously the name of it, it pops out pretty quickly.”

When asked why his office approved such a large and unusual transfer request, McCuskey said the governor’s office provided detailed opinions on the legitimacy of the transfer from global accounting firm BDO and the law firm Bailey Glasser.

“We can’t supplant our legal opinion of what their appropriations are if there’s a rational basis for them, and it was close,” McCuskey said. “We decided at the end of the day, it was better to make sure that effectuated what the governor’s office wanted, but to keep a record and an accounting of what happened and why.”

The meeting ended with the Senate Finance Committee agreeing to request more information on the COVID-19 money transfer from the Office of the Inspector General, as well as the Department of the Treasury.

For the First Time in 40 Years, Someone Other Than a Gainer Will Hold W.Va. Auditor's Office

Long-time Democratic state auditor Glen Gainer announced in 2015 that he would not seek re-election this year and in the spring, stepped down from his post 8 months before the end of his term.

With a wide open seat, a politically connected Republican and an underdog Democrat have traveled West Virginia rounding up support for their candidacies, but the election marks the first time in 40 years someone with the last name of Gainer will not be elected to the office.

The previous auditor, Glen Gainer III, was first elected in 1992. His father, Democrat Glen Gainer Jr., was elected auditor in 1977 and held the office until his son’s election.

The Candidates

Republican John McCuskey, known as J.B. around the statehouse where he represents Charleston’s 35th House of Delegates District, was born in Clarksburg. He’s the son of a former judge and a graduate of the West Virginia University College of Law.

McCuskey says as he’s campaigned across West Virginia, he’s found himself having to educate the electorate about the office itself and his race, likely because the previous auditor held the office for more than 20 years. He also focuses, though, on sharing a positive message with West Virginians.

“Every time I make a speech I like to tell people that I am just wildly optimistic about the future of West Virginia and I think that’s very motivating for people because they hear a lot of negative stuff about our state,” McCuskey said in an interview with West Virginia Public Broadcasting in September.

“I encourage people to, when they tell their friends that live other places, try to be as positive as possible, try to focus on the things we have going right because if we don’t, it’s not going to get turned around.”

His Democratic opponent is Mary Ann Claytor, the daughter of a coal miner. Born near Campbell’s Creek in Kanawha County, Claytor has 20 years of experience as an employee of the auditor’s office, where she actually audited the finances of local governments.

“I think when they think of a bean counter they think of a very boring person, but I have a very energized base, both Democrats and Republican honestly because even when I meet those people that are strictly party lines on the other side they understand, yea, that needs a skill set,” she said, adding that with an accounting degree and experience working in the office, she has that skill set.

OASIS

When it comes to the policy issues in the auditor’s race, they’re pretty technical. Beginning under the Manchin administration, the state has invested hundreds of millions of dollars in a new computer operating system and the Auditor is a major player in its implementation.

OASIS, as it’s known, allows a variety of systems in state government to talk to one another. It controls payroll and budgeting and tracks the timelines of state projects like new roads or bridges, among many other things.

The system that has had a number of issues and faced major delays and both candidates said had state leaders known of the budgetary issues ahead for West Virginia, they would have waited to invest in it, but McCuskey and Claytor want to make sure the state is getting what it paid for.

“Since we’ve already done it, you know, and we’ve spent that money, we need to make sure that the product that we have purchased works to our best interest and the best interests of the citizens,” Claytor said.

As auditor, Claytor would orchestrate a review of the initial contracts for the OASIS operating system and take the issues straight back to the vendor to be fixed. McCuskey said he’ll also review the system issues, but his priority is to make sure employee trainings are completed and the system is fully operational.

“Because the taxpayers of this state have spent dearly for this system and they deserve the results they were promised,” he said.

Budgetary Constraints

Over the past four years, the Auditor’s Office has had to endure budget cuts of up to 32 percent.

Both McCuskey and Claytor say they want to balance continued savings with protecting the important services the office provides.

McCuskey said from the outside looking in, it’s hard to tell exactly where those savings are, but Claytor said she’ll look to the top ranks of the office staff to find them.

Candidates for Governor Debate Taxes and Trump

After an NPR investigation into Jim Justice’s business operations, the Democratic candidate for governor takes on Republican Bill Cole in the second West Virginia gubernatorial debate.

A leaked tape where Republican Presidential candidate Donald Trump can be heard describing sexually assaulting women causes waves in West Virginia politics, but will either scandal swing the vote?

Ann Ali, managing editor of the State Journal, and MetroNews Statewide Correspondent Brad McElhinney join us to discuss the race.

It hasn’t been that long since the state Democratic Party rarely had to worry about the Republicans winning a race over their candidates, but in 2014, things really changed in West Virginia.

After 80 years of holding a Legislative majority, the Democrats lost their hold of both the state House and Senate and shifted the nation away from thinking of West Virginia as a solidly blue state. Anne Li took a deeper look at what happened leading up to the flip and whether voters’ feelings then will impact this year’s state legislative races.

J.B. McCuskey may be a familiar name to some folks in Charleston. A resident of the capital city, McCuskey was elected to represent the 35^th House of Delegates District in 2012, but this year, he’s attempting to appeal to a much wider swath of the electorate.

McCuskey is the Republican running for Auditor, a statewide office left vacant this year when long-time Auditor Glen Gainer retired. McCuskey sat down with me in September to discuss his ideas for the office and the race that isn’t getting quite as much attention on a statewide scale.