UPDATE: The former executive director for the South Pittsburg Housing Authority is facing charges, accused of stealing money from the organization.

Terry Case was was indicted last week after in investigation from Tennessee Comptroller's Office.

The special investigation also found that South Pittsburg Housing Authority and South Pittsburg Elderly Housing Authority commissioners received at least $37,975 in unauthorized compensation from 2010 to 2014. Housing authority officials told investigators these payments were discontinued after they became aware of the state law prohibiting compensation to housing authority commissioners.

Investigators discovered that Case requested and received fraudulent checks written to him totaling at least $7,000.

These payments were ostensibly for administering the housing authority’s summer food program, however Mr. Case admitted to investigators that the true reason for these payments was that he had not received a pay raise in five years.

Earlier this year two former employees were indicted for embezzling money. Channel 3 spoke with the current chair of the board for the authority. He says new policies are in place and they are hoping to move past this accused corruption.

"It has been very hard for us. We've had to kindly start from scratch," says Virgil Holder, Chairman of the Board for the South Pittsburg Housing Authority.

The South Pittsburg Housing Authority has taken a major financial hit over the past several years.

"The financial hole will not be made up. It can not be. What we've had to do is we've had to apply for grants," says Holder.

Over the course of four years, state investigators say former employees Janice Brooks and Leslie Jackson stole close to $230,000 from the authority. They were arrested earlier this year.

Now, Terry Case, who served as executive director for eight years, is accused of using housing authority funds for his personal use. He was fired in in July 2014 when a stereo system, video games, tools and other items belonging to the authority were taken from his home. He says he was just storing them.

 "It's very unfortunate," says Holder.

Holder says the new executive director and staff have worked hard to get things back to normal.
"The board now has full oversight of all financial operations that occur," he says.

Case was not at his home Wednesday and could not be reached for comment.
"Terry Case is my friend. I stand by him," says Jim Lewis.

People like life-long friend Jim Lewis are coming to Case's defense.

"My opinion is Terry may have made an error but he did not purposely take any money that he didn't think was due him," says Lewis.

In the meantime, Case's role with the Marion County school board is up in the air. He has served on the board for 11 years, most recently as chair.
"There will be a conversation between myself and Mr. Case and my other board members as to his status on the board and his future there and we can put this behind him and move forward," says Mark Griffith, Superintendent of Marion County Schools.

Case is out of jail on a $10,000 bond. He is expected to appear in court Friday where he will have the opportunity to enter a plea. 

Leslie Jackson pleaded guilty to theft between $1,000 and $10,000 last week. She was sentenced to two years probation with the condition she would testify against Terry Case if his case goes to trial. She was ordered to pay more than $5,000 to the housing authority. 

Janice Brooks has a status hearing for her case this Friday. 

Count on channel 3 to follow the latest in this case. 

The former executive director of the South Pittsburg Housing Authority has been arrested following an investigation by the Tennessee Comptroller’s office.

Marion County deputies arrested Terry Case Tuesday night after a grand jury indicted Case on theft charges on December 7.

The indictment comes after an investigation by the state comptroller into allegations Case used Housing Authority funds for personal use. 

In 2014, a stereo system, video games, tools and other items were taken from Case’s home and returned to South Pittsburg Housing Authority. He said he was only storing them.

Details of that investigation were presented to a grand jury earlier this month, resulting in a warrant being issued for Case’s arrest this week.

Case served as executive director to the Housing Authority for eight years. He was dismissed in July 2014, amid the allegations. 

Case currently serves as chairman on the Marion County Board of Education. It is not clear if he will remain in that role following his arrest. 

Case was released from jail shortly after his arrest on a $10,000 bond. He’s due in court for an arraignment hearing, where he will be asked to enter a plea, on Friday at 9am.

Stay with Channel 3 for more on this story.