Sharon Paterno ran a $4.4 million welfare car program for a Morgantown-based nonprofit organization. She also sold her 1993 Oldsmobile 88 to the same federally funded program for $3,500.
Larry Richards worked under Paterno and was second-in-command of Wheels-to-Work at Human Resource Development Foundation. He, too, sold his car to the program. Richards collected $2,500 for his 1996 Ford Escort.
"If those staff sold cars, it was a good deal," said Homer Kincaid, the foundation's executive director. "I would not allow our staff to make money off the program. That's not acceptable."
Paterno and Richards oversaw the purchase and sale of hundreds of vehicles over the past two years as part of the Wheels program, which leased cars to low-income West Virginians so they could drive to work and job-training programs.
Those transactions are now being scrutinized by investigators as part of a statewide probe into the Wheels program. Three other nonprofit agencies that ran Wheels programs also are being questioned.
A Charleston Gazette review of Wheels program records shows:
"There wasn't a license in the whole train of transactions," said Ruth Lemmon, executive vice president of the West Virginia Auto Dealers Association, who has reviewed documents related to some of the purchases. "They were skating the system."
Last year, the state Department of Health and Human Resources reviewed the foundation's purchases and found no wrongdoing. In fact, reviewers praised the foundation's program, saying it put safe, reliable cars in the hands of low-income West Virginians.
The state recently awarded the foundation, an offshoot of the state AFL-CIO, a $1 million contract to run a donated-car program in which the agency collects donated cars and gives them to welfare recipients.
Kincaid said the DHHR approved the vehicle transactions.
He noted that Paterno and Richards sold their cars to the Wheels program below book value. Paterno's Olds sold for $700 less than its value as priced by the National Auto Dealers Association. Richards sold his car for $50 below value.
Paterno and Richards could not be reached for comment.
Kincaid said Wheels car values depreciated quickly because welfare recipients mistreated the vehicles. More than 160 of the leased cars were damaged in accidents.
Kincaid acknowledged that the foundation didn't have a dealer's license, but it didn't need one at the time, he said. The agency recently applied for a license, which the new donated-car program requires.
The foundation sold most of its used cars last summer after state officials directed nonprofit organizations to unload vehicles that needed costly repairs. In July, the state quietly decided to scrap the lease program, which officially ends Dec. 31.
"We were selling them for the DHHR," Kincaid said. "They're a state agency. They told us the program was ending and we needed to get rid of the vehicles."