The Justice Department has formally charged a Fairbanks man with illegally spending $315,000 of a river conservation group's money to buy an airplane, guns, pornography and other items for his personal benefit.
David M. McGraw, 38, improperly funneled funds from the Yukon River Inter-Tribal Watershed Council, a nonprofit corporation where he was finance director between 2010 and 2014, the U.S. Attorney's office in Alaska asserted on Thursday.
In each fiscal year during that time, the council received more than $1 million in federal funding.
The agency said McGraw has been indicted with seven counts, including misapplying funds and money laundering.
McGraw's attorney, Robert Downes, would not comment on details of the case.
"We'll deal with this in court and hopefully the matter can be resolved, that's all I can say," Downes said.
Founded in 1997, the council consists of more than 70 Alaska tribes and Canadian First Nations groups. It seeks to protect water quality in the nearly 2,000-mile-long river in Alaska and Canada, and its tributaries.
The council's governing body immediately acted after "questionable activities" involving McGraw surfaced, said Kelly Donnelly, the council's Alaska executive director.
"This is a step toward justice we've been waiting for for almost four years now," Donnelly said. "We're all saddened that a former employee felt they could exploit the federal government and all our member tribes and First Nations and chose to divert money for their own use rather than protecting and restoring the Yukon River."
McGraw directed council money to companies he established, Clear Skies Aviation LLC and Interior Rentals LLC, the Justice Department statement said.
"McGraw used the money he diverted to these corporations to purchase and maintain an airplane and to make a down payment on real estate," the agency said in a statement.
The money also paid for McGraw's flight school lessons, more than a dozen guns and online pornography fees, the statement says.
Donnelly said the council did not know of McGraw's purchases of pornography or firearms, until the federal government brought charges related to those items.
The agency said that between 2011 and 2013, McGraw filed false personal income tax returns as well. If convicted, McGraw faces sentences that include up to 10 years in prison and a $250,000 fine.
Donnelly said the council and its effort to protect the river have been severely affected by the issues involving McGraw.
The group's ability to receive federal grants was damaged, and the council today operates with a much smaller staff of nine employees, Donnelly said. Offices in Fairbanks and Whitehorse, Canada, were closed, leaving only the group's Anchorage office.
"We have worked really hard to recover our reputation and the trust of our funders," she said. "We are strong and growing again, and working toward a resolution of this black chapter is a positive step from our perspective."