By Dawn Slade
Mille Lacs County Times

Mille Lacs Academy Executive Director Paul Smith has been indicted on federal charges stemming from his employment with Marie Detty Youth and Family Services Center, Inc., in Lawton, Okla., from 2001-2004.

Smith was arraigned in federal court on Monday, June 8 in Oklahoma City on charges of embezzlement, mail fraud, and making false statements to federal investigators. He is  scheduled to be heard in federal court Monday, July 13 in front of U.S. District Court Judge Robin J. Cauthron.

In a released statement from Nexus, Inc., which operates the Mille Lacs Academy in Onamia, Smith said, “These charges were thoroughly investigated in 2004 by the Marie Detty board of directors. I was exonerated of all allegations, and all charges were dropped. I’m sure the federal charges will be dropped as well.”

Seventeen of the original 27 counts in the indictment have been dropped, according to Nexus.

Smith joined Nexus in 2007 as executive director of the Mille Lacs Academy. Since that time, two annual independent, outside audits have been performed and an additional special independent, outside audit was completed in February 2009. No irregularities were found in the audits, according to Nexus officials.

Nexus CEO, David Hutchinson, said the audit findings are consistent with the performance he’s seen from Smith.

“Paul has demonstrated excellence in leadership at Mille Lacs Academy,” Hutchinson said. “We stand behind him as he counters these allegations.”

Hutchinson said in a released statement that Smith brought this matter to the Nexus management’s attention at the onset of his employment.

Hutchinson also said that Nexus will continue to monitor the situation as it unfolds. There are no plans to remove Smith from his post.

“We’ve seen the indictment, but have no direct knowledge of the facts on which the indictment is based,” Hutchinson said.

“An indictment is not a conviction,” Hutchinson said. “In our system of justice, a person is presumed innocent until proven guilty in a court of law. We plan to let the justice system run its course and will make appropriate decisions based on the outcome of the case.”

The embezzlement charge carries a maximum penalty of five years in prison and a $250,000 fine, while the mail fraud charge carries a maximum penalty of 20 years and $250,000, and the false statements charge carries a five year, $250,000 maximum.

The Mille Lacs Academy is a residential juvenile  sex offender treatment program.