City's Audit of BizLINC Finds Inflated Numbers But Leaves Questions Unanswered

A long-awaited audit of the operations of a business incubator funded by the City of Lake Wales using federal grant funds has turned up several shortcomings but few details, despite a long delay.

The audit, which covers only the first year of operations of the incubator, operated Florida Development Corporation, was ordered by the city following the arrest of the former FDC chief financial officer Charles Young on felony fraud charges.

Courtesy Hillsborough County Jail

Former BixLINC chief financial officer was arrested in April and faces two first-degree felony counts.

Young was accused by his former business partners, Derrick Blue and Frank Cornier, of embezzling tens of thousands of dollars from the business. He was arrested on two felony counts in Hillsborough County in April.

The firm had collected $900,000 of the funds before questions were raised in an article in Lake Wales News in February. A further payment of $300,000 has been delayed by the city pending the audit results.

The CPA firm of Carr Riggs & Ingram (CRI), who performed the "Agreed-Upon Procedures" (AUP) audit, reported that FDC delivered only one of the four progress reports required under their contract, and by using 50% samples to verify data, said that the reported numbers representing technical assistance to business owners were significantly inflated.

The audit found that only five of the reported ten business seminars were held during the fiscal year, and that 1,365 hours of technical assistance hours were recorded, although 2,000 were reported.

"Deliverables on the report submitted on June 20, 2023 did not agree to results from Item 3.a and 4.a," the report stated.

The audit did not address the financial records of the corporation, or the allegedly missing funds. The audit also did not address any new jobs that may have been created, although FDC reported assisting businesses in areas of Florida far from the intended Lincoln Avenue business district. FDC reports claim a total of 45 "jobs" created in the fiscal year, but the term is not defined.

In response to a question from Lake Wales News, Lake Wales City Manager James Slaton said "the audit appears to be consistent with FDC's annual activity report presented to our city commission last year."

Slaton said that he has "already ordered a second-year AUP to measure FDC's performance over the last 12 months as well." Third-year funding "is withheld until the city receives confirmation that FDC has met their deliverables for both years one and year two as agreed upon."

The original intent of the incubator was the creation of local jobs through assistance to growing businesses. That help was proposed to include training in QuickBooks, website development, arranging financing, coaching with "elevator speeches," and developing business plans.

Courtesy City of Lake Wales

FDC's CEO. Efrain "Frank" Cornier, center, and COO Derrick Blue,, left, accused the former chief financial officer, Charles Young Jr., (standing between them) of stealing more than $250,000 from the company. Young has been charged with obtaining property by fraud, grand theft, $50,000 or more, and a second count of grand theft of $100,000 or more. Both counts are first-degree felonies. Bond on each count was set at $25,000,

Shortly after entering into the $1.2 million no-recourse contract with the city, the officers of FDC created a new corporation, which they dubbed "BizLINC," an apparent nod to their location on Lincoln Avenue.

The News story in February followed a months-long investigation of the BizLINC operations run by FDC that revealed several irregularities, drawing into question the quality of the advice they were offering new start-ups. Among those were the company's failure to obtain business tax receipts, formerly referred to as occupational licenses, from either the county or city.

Also of concern were instances of plagiarism and fake testimonials on the BizLINC website, which also had non-functioning email addresses and phone numbers, preventing contact from potential clients.

The former CFO of both corporations, Charles Young Jr., was listed as the registered agent of both FDC and BizLINC, along with numerous others, at three different locations including a UPS post box in Spring Hill, in violation of state statutes.

The News article raised questions about more than 50 businesses the Blue had registered with the Florida Division of Corporations, of which all but 10 had been involuntarily dissolved by the state. In response, Blue told city commissioners that he was "a serial entrepreneur."

Blue and Cornier reported to law enforcement that Young's alleged theft of corporation funds was detected only when they received a "low balance" notice from their bank. They reportedly "fired" their partner and received the second tranche of funds from the city before reporting the suspected crime.

According to an anonymous law enforcement source, Young was found living in a home he was renting for $7500 a month.

Throughout the AUP audit report, CRI repeatedly misspelled the BizLINC firm as "BizLINK."