A bogus letter of credit (L/C) has emerged in a welter of documentation turned over by Cincinnati city officials to FBI agents investigating a failed theatre project in the city.

What purports to be an L/C turned up in response to a new round of federal grand jury subpoenas related to the failure of the Empire Theatre project, in which a former basketball player said he would convert the 89 year-old theatre into a nightclub.

Grants and loans

The subpoenas probe into how the city authorities handled the US$184,172 in grants and loans to LaShawn Pettus-Brown for the project.

Specifically, the FBI asked for documents related to the authorities' internal audit division's review of the project and those to a city officer who resigned earlier this year.

Investigations

Internal auditors investigating the project questioned development officials involved in the deal. Summaries of those statements were included in thousands of pages of documents already turned over to the jury but many of those statements were missing from the audit report.

The missing statements are believed to have placed the blame on low-level development officials who failed to review Pettus-Brown's business plan.

Bogus L/C

The project stalled in late 2002 after city officials stopped making payments on invoices because Pettus-Brown failed to provide evidence of outside financing.

He later provided what purported to be a L/C from PNC Bank, which the bank said was bogus.

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