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August 8, 2020

Former Landis Town Manager Reed Linn, others indicted for felony embezzlement

By Shavonne Potts

shavonne.potts@salisburypost.com

LANDIS — A year and a half after questions were raised about the town’s finances, a Rowan County grand jury has indicted former Landis Town Manager Reed Linn, former finance officer Ginger Gibson and former recreation director Andrew Morgan for felony embezzlement.

Linn, 61, of China Grove, was arrested Thursday afternoon after turning himself in. Warrants were issued for his arrest for one count of felony conspiracy and 10 counts of felony embezzlement of public funds by a public officer/trustees.

Linn did not respond when asked if he wanted to comment about the charges.

Gibson, 55, of Kannapolis, faces similar charges and was arrested Thursday after turning herself in. According to court records, Gibson faces two counts of felony conspiracy and 10 counts of felony embezzlement of funds by a public officer/trustees.

Asked for a comment when being arrested, Gibson said, “I haven’t done anything.”

Shavonne Potts / Salisbury Post – Ginger Gibson is arrested Thursday after being indicted on charges of embezzlement.

Morgan, 35, of China Grove, faces one count of felony conspiracy and seven counts of felony embezzlement of funds by a public officer/trustees. Morgan was not previously named by officials for any alleged involvement. He was also arrested Thursday after turning himself in.

The court records, filed Wednesday, say the offenses occurred between 2010 and 2019. Specifically, the years in question are 2010, 2012, 2013, 2016 and 2019.

An investigation was sparked following a January 2019 article by the Post when state officials raised concerns about the town’s finances from its 2017-18 fiscal year. The Local Government Commission had concerns about salary overspending and noted that several accounts were over budget. The LGC also mentioned the lack of communication between the agency and town staff.

The town board met on Feb. 4, 2019, in front of a standing-room-only crowd and announced that Linn would retire as the town manager but stay on as the fire chief. Linn, who was not in attendance at that meeting, wrote a letter saying that he was honored to have worked for the town. He also addressed the January Salisbury Post article, and then-Mayor Mike Mahaley called the article “fake news.” The public’s questions about the town and/or Linn were “ludicrous,” Mahaley said.

Three days later, the State Bureau of Investigation opened a criminal probe into the town. Then-Alderman Seth Moore said he received a tip that he referred to Landis Police, who then passed the matter to District Attorney Brandy Cook. Cook asked the SBI to open an independent investigation. Instead of retiring, Linn resigned and Gibson also stepped down the same day the investigation was announced.

Salary records released by the town in March 2019 showed Linn and Gibson took home a salary considerably higher than the board approved over the course of a 10-year period. The higher salaries came at a time when the town board was forced to lay off several firemen and police officers as well as raise taxes and utility rates in order to balance their budget.

Linn’s approved compensation in 2018 was $69,077, he actually took home $285,541 in 2018, according to the W-2 data released. His salary topped out at nearly $350,000 one year earlier.

Gibson’s earnings rose as high as $248,008, while her approved salary was about $50,000, according to the W-2 data.

The release came one day after Town Attorney Rick Locklear filed a civil suit against Linn and Gibson for misappropriating town funds.

The civil lawsuit alleged then-Landis police officer Roger Hosey reviewed the payroll system and discovered “monies assigned in excess of $25,000 for the unauthorized payment of salary and contributions to the (retirement) plan on behalf of or to the benefit of Linn.”

The lawsuit alleged Gibson also received benefits over $25,000.

According to the suit, Gibson presented employee compensation in a lump sum to the Landis aldermen, instead of itemizing by an employee, and it said Gibson’s and Linn’s compensations were inflated.

The investigation led to the appointment of then-Police Chief Kenny Isenhour as the interim town manager and Hosey as the interim finance officer. Hosey briefly served as town manager before an election brought new aldermen into office. The new group of aldermen fired Hosey from his town manager position, and he resigned from the police department.

The board of aldermen cited “just cause” as the reason for the firing, but Hosey’s contract says that phrase means a felony conviction or crime of moral turpitude. Hosey hasn’t been convicted or charged with any crimes and is suing the town for wrongful termination

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