Former Raleigh Assistant City Manager Lawrence Wray, 70, was arrested Tuesday morning on charges of embezzlement and obtaining property under false pretense from a business incubator formerly funded by the city, according to news reports.
Wray served as chairman of the board of the nonprofit, Raleigh Business and Technology Center.
The center is now under investigation by the Raleigh Police Department.
The grand jury indictment alleges that Wray took tens of thousands of dollars from the center, which offers office space and mentoring to small businesses.
The indictment says that Wray negotiated a $25,000 loan to the center in November 2009, but wired the loan directly into a personal account.
The center then repaid the loan, with $23,000 in interest, to the lender, an Alicia Lockard, according to the indictment.
The center paid back the loan, with the interest, over a period of just six months, according to the indictment.
The center’s then-director, Bob Robinson, executed the promissory note on the loan but said it was under Wray’s command. He said that the loan included some of Wray’s own land put up as collateral. Wray has claimed the opposite, saying he was acting under Robinson’s orders when he put the loan money into his personal account.
No charges have been filed against Robinson. Robinson resigned as CEO of the center after an internal audit of the center was released in 2013.
The city elected not to renew a contract with the center, cutting ties with the incubator.
In the years leading up to the split, the city was giving the center $162,000 annually.
After the audit, questions were raised about various loans given to the center by board members as well as loans given out to groups affiliated with board members.
So far Wray is the first to face charges in connection with the center.
Raleigh police arrested Wray about 8 a.m. Tuesday morning at his home on Willow Run South Drive in Raleigh, according to police.
Wray posted a $25,000 bail bond shortly after and was released later that day.
Smith said that they were preparing for a potential trial.
Smith said that there are good reasons for Wray’s actions at the center. The indictment claims the funds were never transferred back to the center, but were used for Wray’s own personal benefit.
Wray worked for the city from 1973 until his retirement in November 2010.