NORTH MEMPHIS (WMC-TV) - The head of Memphis community development admitted his office should never have allowed a convicted felon to lease public office space and serve as a community development corporation director.
Friday, a judge ruled that 43-year-old Steven Watson, formerly the executive director of the NEVETS Community Development Corporation and owner of NEVETS Construction, will serve out the remainder of his 6 year sentence for aggravated assault. The judge revoked Watson's probation.
Police arrested Watson Aug. 20 on a felony theft charge, alleging he stole thousands of dollars in cash and Social Security numbers in a bungled oil spill clean-up project he ran out of the city's Northeast Resource Center, 1583 Hollywood St.
Watson leased space at the center for $1 a year from the Memphis Division of Housing & Community Development to run his construction company and manage community outreach programs.
The Action News 5 Investigators were the first to report that at the time of his arrest, Watson was on probation for a 2005 aggravated assault conviction. He also carries a 1991 conviction for aggravated robbery.
Tuesday, Memphis DHCD Director Robert Lipscomb admitted his staff didn't check Watson's criminal history before granting him a lease.
"This guy, based on everything I've seen and everything I know, misrepresented the community," said Lipscomb. "That doesn't mean we shouldn't do our job going forward, and it's a lesson learned that we should do a more thorough background check on who we are leasing to."
Memphis Police Deputy Chief Joe Scott confirmed the theft charge against Watson alleges he stole an undetermined amount of cash from hundreds of applicants to conduct drug screenings for his clean-up program.
Assistant City Attorney Marcus Ward acknowledged the city has launched an investigation of all of Watson's activities at the resource center.
"First of all, whether or not any of the activities he's conducting with the program are illegal, " Ward said. "Whether they are, in any way, violating any of the lease agreements that we have, and if they expose the city to any additional liabilities."
Aug. 16, Lipscomb ordered Watson to cease all activities and vacate the center.
"We are not renewing NEVETS lease, and we are sending (Watson) a letter notifying him of same and advising him that he must cease all current activities in question," said Lipscomb Aug. 16.
Lipscomb evicted Watson after the Action News 5 Investigators reported Watson was assembling 150 unemployed Memphians and planning to bus them to Mississippi to help clean up damage caused by the BP oil spill.
"We're going to pay them $20 an hour and a $26 per diem for food," Watson said. He said he would personally finance the operation through his construction company.
But by his own admission, neither he nor his company has earned FEMA certification to assist in any oil spill clean-up.
According to Christopher Garrett of the Tennessee Department of Commerce & Insurance, NEVETS Construction does not maintain a construction/contractor's license in either Tennessee or Mississippi.
Records at the Tennessee secretary of state's office confirm NEVETS Construction's corporate status is active, but it was revoked in Aug. 2008, then reinstated Sept. 2009. The agency's spokesperson, Blake Fontenay, said the revocation was likely for non-payment of state excise taxes.
"We forgot to file our corporate annual report," insisted Watson.
After investigating three complaints by applicants who said they were asked to pay $65 cash up front for drug testing and offer their Social Security numbers, Watson revealed to Action News 5 that he has accepted 800 applications for the 150 temporary "oil spill" positions.
Officials with two drug-testing agencies and Jeff Hentschel, communications director of the Tennessee Department of Labor & Workforce Development, said it is unethical for Watson to administer the screenings without having them verified by a certified laboratory.
"I had started to feel funny (about the job opportunity)," said James Everett of Midtown Memphis, one of the 800 applicants who paid cash for the drug-testing. "A little alarm went off in my head, and I feel like I lost $65."
Watson said he had administered the drug screens at no cost until someone broke into his office at the resource center and stole 125 of his test kits.
As far as the Social Security numbers are concerned, Watson said he needed those to run background checks on the applicants.
"You know, of course, I can't take someone who is a felon or a sex offender to another state," Watson said, ignoring the irony of his own felony convictions. "I'm actually paying for their room and board, and I'm actually paying for the bus to take them down there.
"I think it's an excellent opportunity to for us to take some people to Shepherd, MS, and clean their community up."
Shepherd is in CENTRAL MISSISSIPPI, Calhoun County.
It's nowhere near the Gulf Coast.
That's where Watson started to back-pedal.
He invited us into his office while he checked his computer. For 10 minutes, he tried to locate where he said he planned to take his "oil spill clean-up crew."
"It's near Louisiana," Watson insisted.
After searching his computer in vain, he asked an associate to help him. She located SHEPARD STATE PARK IN GAUTIER, MISSISSIPPI on the Gulf coast.
"We got our geology straight," he said.
That's GEOGRAPHY, Mr. Watson.
"We have no oil at Shepard State Park, and no one has contacted us about cleaning anything up," said Jim Walker, media director for the Mississippi Department of Wildlife, Fisheries & Parks. "Nor have we asked anybody, especially people who don't have haz-mat certification."
When Action News 5 expressed its concern that Watson was neither qualified nor properly prepared to carry out his oil spill jobs program, he answered, "Well, that's probably so. That don't make it illegal. That don't make it immoral."
"That's not fair," said Robert Moore of North Memphis, after Watson declined to reimburse him when he showed up at the center, demanding his cash back. Moore carried a receipt indicating he, too, paid the $65 for a drug test.
"It's too hard out here to get a job and, I mean, doing stuff like this? I mean, it's totally uncalled for," said Moore.
It's unclear whether any of the applicants who paid cash for the drug-testing and submitted their personal information will receive a refund or their documentation.
"We evicted him," reiterated Lipscomb. "We've made sure he cannot receive any further HUD (Housing & Urban Development) funding."
Watson's being held without bond. His Sept. 17 court hearing is before Shelby County Criminal Court Judge Jim Lammey.
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