Panama City transfers $455K to fix overspending by arrested city official Michael Johnson

PANAMA CITY − Local officials continue efforts to correct mistakes of a former city employee arrested on embezzlement charges.

Panama City commissioners on Tuesday agreed to transfer $455,000 from the city’s general fund to its community redevelopment fund. According to Jared Jones, assistant city manager of Panama City, the transfer was to correct overspending by Michael Johnson, the former community redevelopment director, who resigned from his position in October after City Manager Mark McQueen confronted him about sloppy management practices.

Johnson was arrested about two weeks after he resigned on charges of embezzling more than $470,000 from the Friends of After School Assistance Program, a nonprofit organization that supports the city’s After School Assistance Program.

To correct overspending of Michael Johnson, the former community development director of Panama City, officials transferred $455,000 from the city’s general fund to its community redevelopment fund.

“These dollars were spent to benefit the ASAP program out of our HUD (Community Development Block Grant Program) trust fund, (but the overspending by Johnson wasn’t) eligible for reimbursement or coverage by those funds, so (the city) actually accrued a negative balance,” Jones said. “(His overspending) has been going on for several years, and this (transfer) was the clean-up action to repair that.”

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In his former role, Johnson oversaw CDBG funding Panama City received from the U.S. Department of Housing and Urban Development for the ASAP program.

Johnson was arrested after an account for the ASAP program was discovered at Hancock Whitney Bank that only had him on its signature card. He has directed the program since 2012, and he had sole access to its checkbook.

Statements from Hancock Bank show Johnson wrote himself checks, the first of which was written on Feb. 1, 2012, for $9,839. The largest check was written on Nov. 13, 2020, for more than $37,215.

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As of Thursday, Jones said he did not know if Johnson used the overspending of CDBG funds to facilitate his alleged embezzlement. The Panama City Police Department, along with the FBI, are investigating all programs and funds Johnson had access to or authority over.

Johnson faces one count of grand theft over $100,000, one count of money laundering involving more than $100,000 and 19 counts of official misconduct related to the misuse of funding from the city’s Community Redevelopment Agency.

“HUD’s controls and their reporting are extremely stringent, but that doesn’t negate the fact that we’ve had a bad actor who may or may not have done that,” Jones said.

This article originally appeared on The News Herald: Panama City transfers $455K to correct Michael Johnson’s overspending