A D.C. jury found that a nonprofit group and its director misappropriated more than $300,000 from the city's HIV/AIDS program for renovations on a proposed job-training center that instead opened as a strip club.
The jury found damages of $329,653 against the nonprofit Miracle Hands Inc. and its director, reformed gangster Cornell Jones, after a four-day trial in D.C. Superior Court.
D.C. Attorney General Irvin B. Nathan said Tuesday the verdict "should serve as a warning to all those who would attempt to misuse District grant funds."
The funds, which originated from the Department of Housing and Urban Development and were distributed by the District's HIV/AIDS Administration from 2006 to 2008, required that a Northeast warehouse be converted into a job-training facility for people with HIV/AIDS, according to the attorney general's office.
Yet the conversion did not occur and the job-training facility never opened, prosecutors said. Instead, witnesses testified that four months after receiving the grant funds, Mr. Jones signed a letter of intent stating that he was negotiating a lease for the same warehouse to be used as a nightclub that would eventually be called the Stadium Club.
By early 2007, according to prosecutors, Miracle Hands had decided to move the job-training facility to 2145 Queens Chapel Road, yet it continued to submit invoices to the District for renovation work at 2127 Queens Chapel Road.
And while defendants contended that the location of the job-training facility had changed, the attorney general's office said witnesses testified that Mr. Jones did not obtain a building permit for the new location until the second year of the grant had nearly expired.
The complaint largely mirrored the findings of a 2011 investigation by The Washington Times, which reported that the Stadium Club operates with a liquor license reserved in 2007 for the blighted warehouse property at 2127 Queens Chapel Road. Mr. Jones owned the property at the time and used it as the Miracle Hands office. By 2009, he had leased the property to a pair of businessmen who were in the process of purchasing the liquor license and planning to open a strip club there.
In 2010, Mr. Jones, a convicted drug trafficker immortalized in the Black Entertainment Television series "American Gangster," sold the property for $2.7 million, according to D.C. property records. The Stadium Club opened at 2127 Queens Chapel Road in March 2010.
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