John McCarthy
By: Virgin Islands Free Press News Desk
KINGSHILL — A explosive civil lawsuit filed in the Superior Court of the Virgin Islands alleges a pattern of severe financial non-compliance, conflict-of-interest violations, and retaliatory firing inside the Virgin Islands Housing Finance Authority (VIHFA).
The complaint, filed by St. Croix attorney Lee J. Rohn on behalf of former Chief Operating Officer Stephanie Berry, names the VIHFA, former Interim Executive Director Dayna Clendenin, and current Executive Director Eugene Jones Jr. as co-defendants.
Berry, who served as COO from January 2023 until her sudden dismissal on October 7, 2024, claims she was wrongfully terminated after repeatedly raising internal flags regarding improper procurement practices, unvetted tax exemptions, and federal compliance risks that threatened millions in HUD and FEMA funding.
Procurement Conflicts and Unchecked Accounts
According to court filings, Berry discovered almost immediately upon taking office that key internal controls were being bypassed.
Among the detailed allegations in the 27-page filing:
- Conflict of Interest in Bidding: Staff in the Planning and Construction (P&C) division who wrote project specifications and pricing were repeatedly assigned to Evaluation Committee Panels (ECPs) that awarded those same contracts. Berry claims bids frequently matched “supposedly confidential” specifications, with work consistently going to favored contractors.
- Improper Tax Exemption Approvals: Construction managers were allegedly directed to sign off on tax exemption request forms under the Affordable Housing Development Program for projects they had no direct involvement in or oversight over.
- Unauthorized Payment Approvals: A P&C construction manager was allegedly tasked by Clendenin with approving payments and timesheets for a third-party vendor handling hurricane recovery materials at a St. Croix warehouse—bypassing the full-time warehouse manager on site. The owners of that vendor were later indicted in a federal HUD fraud scheme.
- Landscaping Expenditures: The complaint alleges over $100,000 annually was funneled into landscaping undeveloped lots through simplified e-bid processes. In one instance, a $12,000 “first cut” was authorized for a site slated for demolition within 60 days. When Berry refused to sign off on the payment, she was terminated shortly thereafter.
‘Stop Putting Things in Writing’
The suit paints a grim picture of executive oversight under both Clendenin and Jones.
Berry alleges that after Eugene Jones Jr. took over as Executive Director in April 2024, she met with him in St. Thomas to discuss operational compliance. During that June 2024 meeting, Jones allegedly stood over her desk and warned that “if she kept putting things in writing, it would be to Plaintiff’s detriment.” Jones allegedly repeated the directive during a subsequent executive leadership meeting, instructing staff to cease creating written records of operational concerns.
Berry further claims that top leadership failed to act on warnings regarding non-compliance with the federal Davis-Bacon Act and Section 3 guidelines on FEMA projects, putting an estimated $1.3 million at risk.
The Termination
On October 7, 2024, Jones called Berry into his St. Croix office and terminated her effective immediately, claiming she was “not a good fit”. Berry notes she had never received prior disciplinary notices or performance warnings during her tenure.
The lawsuit alleges four counts:
- Violation of the V.I. Whistleblowers Protection Act (against VIHFA)
- Tortious Interference with Contract (against Clendenin and Jones)
- Defamation (against all defendants)
- Breach of Contract (against VIHFA)
Berry is seeking compensatory and punitive damages, along with legal fees. The case is assigned to Superior Court Judge Douglas A. Brady on St. Croix.
