Jim Dey: Champaign entrepreneur's new bankruptcy filing includes payments to family

Nov. 28—A Champaign entrepreneur whose bankruptcy filing is being challenged by the state has filed a revised financial statement that details payments to family members.

Last week's filing by Sally Carter comes in the aftermath of embezzlement allegations by the Illinois Attorney General's Office.

Bankruptcy trustee James Inghram gave Carter and her second lawyer, A. Christopher Cox of Bloomington, until Dec. 27 to respond to the allegations that are key to the state's effort to block her request to discharge debts, a separate but related process within bankruptcy.

It is within the original bankruptcy venue that her original lawyer, Urbana's Roger Prillaman, filed the revised financial statement.

The state wants Carter to repay $1.8 million in grant money awarded to her to oversee social-service programs for young people.

Because the state never received any accounting of expenditures, it sued Carter in Champaign County Circuit Court for repayment.

Carter filed for bankruptcy in federal court after Circuit Judge Jason Bohm ordered her to repay the money. Her filing claimed $640,000 in debts and $118,000 in liabilities.

Carter's filing included the judgment but did not disclose the $1.8 million owed.

The controversy involving the high-profile entrepreneur and motivational speaker has generated a morass of litigation in small-claims court, circuit court and federal bankruptcy court.

Her earlier filings and testimony have been replete with inconsistencies, one highlighted in her most recent filing.

She initially claimed $241,000 in income in 2021. During bankruptcy-court testimony, Carter said it was actually $16,000. In the latest filing, she repeated the $241,000 figure.

The new filing also acknowledges cash payments to family members within both a year and two years of her bankruptcy filing.

Within one year, Carter identified payments of $9,000 to her husband, $930 to her daughter, $2,300 to her mother and $7,300 in legal fees to two lawyers. One represented her in the state's civil case over the grant while the other represented her son in a criminal case.

Carter also acknowledged various payments, donations and gifts within two years to the same people as well as others. One $834 payment went to her father, George Henderson, a Dixon Correctional Center inmate.

She also claimed a cash donation of $4,280 to the Blessing Sally Akinyousoye Foundation in Nigeria.

The filing listed Carter's once-extensive business operations.

One is a sole proprietorship involving work for the University of Illinois. Another business — Sally K. Carter LLC — was described as "inactive."

Three other corporate entities — Tap In Leadership, the Royal Academy and the Royal Angels Foundation — were described as "dissolved."

Carter is currently employed by state Rep. Carol Ammons, D-Urbana.

She recently settled one aspect of the bankruptcy case, agreeing to pay Bridget Kao of Urbana for work performed but never compensated.

Kao sued Carter in small-claims court to recover the money she was due. She then fought Carter's effort to discharge the debt in bankruptcy, prompting Carter to arrange for a friend to finance a cash settlement.

In addition to the $1.8 million owed the Illinois Department of Human Services, Carter owes $65,000 to the Illinois State Board of Education.

The latter sum was part of a multiyear $5.4 million Carter grant to oversee after-school programs in Champaign schools. The district terminated them early because of concerns over their effectiveness.

That prompted the state to seek repayment of $65,000, but education officials gave up when Carter did not respond to their letters.