The Salt Lake Tribune

Published Dec 2, 2010 06:54PM

Updated Dec 2, 2010 11:40PM

http://www.sltrib.com/sltrib/home/50796023-76/butterfield-layton-2006-allh.html.csp

Former Layton economic development specialist Seth Butterfield was indicted Wednesday on two counts each of wire fraud, money laundering and theft from federally-funded programs.

These grand jury charges, filed in U.S. District Court, focused on Butterfield’s actions while administering community development block grant (CDBG) funds between 2000 and 2006.

Federal guidelines mandate that at least 70 percent of the dollars — dispersed by the U.S. Department of Housing and Urban Development (HUD) — go to benefit low and moderate-income residents.

As grant administrator, Butterfield determined how Layton’s CDBG funds were spent.

In January 2002, Butterfield formed the nonprofit Affordable Land Lease Homes Inc. (ALLH). When he joined its small board of directors, he told Layton officials and HUD that the position was voluntary and unpaid.

In October 2002, ALLH contracted with JEMS, Inc.— a small company that Butterfield and his wife own and control — for executive director services. Butterfield then stepped into the lead ALLH position.

Functioning in his dual roles, Butterfield then negotiated and authorized three low-income housing contracts between Layton and ALLH from 2003 to 2005, the court document alleges.

The indictment further states that Butterfield used $116,064 in grant funding to pay part of his $279,000 executive salary between September 2004 and May 2006 — all while concealing that compensation from HUD and the city.