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Keely Thompson, the director of Keely’s District Youth and Boxing Center in Columbia Heights, has been arrested for pocketing money that belonged to at-risk kids. The former boxer allegedly stole $500,000 of grant money to have a good time.

A press release from the U.S. Attorney’s office notes that the affidavit issued in connection to his arrest says “a bank record analysis revealed that Keely used the organization’s debit card to obtain more than $150,000 cash while on several cruises or at Bally’s casino in Atlantic City. In addition to a yearly salary that grew from $46,000 in 2004 to $81,000 in 2009,” Keely also received 127 checks, totaling $355,210, it says. “The organization’s accounting records did not identify a legitimate purpose for these additional payments and when asked by financial professionals, Keely failed to provide supporting documentation.”

The shenanigans seem to have been happening since 2004. “I used the money in the wrong way. I done it and I can’t change it,” Keely reportedly told the FBI.

But it gets even more interesting.

Thompson seems to have had at least one powerful supporter: Ward 1 Councilmember Jim Graham.According to a 2004 Washington Post article, Graham was pivotal to the gym opening:”Thompson said he opened the gym with the aid of Graham, who helped him find the funding and the space.”

The gym has publicly thanked Graham for looking out for it. A former Graham staffer says that’s because, in the past, the councilmember helped steer city earmarks toward the non-profit. But the ex-staffer also says that it was Graham who dropped the dime on Thompson. He learned of  “accounting irregularities” at Keely’s a year ago, and sent a letter about the problem to Attorney General Peter Nickles. Nickles hasn’t returned a call asking about the letter.

Still, that letter wasn’t the first time the allegation that Thompson was misusing funds had surfaced. Back in 2006, in a civil trial in which Thompson was taken to task for firing a boxing trainer, a complaint filed on behalf ofthe trainer included references to Thompson using grant money allocated to the gym in 2004 by community organization Columbia Heights Shaw Family Support Collaborative—to buy vans to shuttle kids on field trips—to instead buy himself a BMW.

The case, which was settled, paints Thompson pretty monstrously: The suit alleges that the trainer “a man living with Human Immunodeficiency Virus(HIV), was fired from his job as a boxing trainer after his supervisor, Mr Thompson, discovered that he is HIV positive, and after [the trainer] reported that the center and/or Mr. Thompson appeared to be engaging in fraudulent and possibly criminal behavior.”

The suit also says the trainer was paid less than minimum wage for his work and that Thompson, after firing the worker, falsely told a prospective employer that the trainer had AIDS and was an active drug user. He also told kids at the gym as much, the suit claims.

Thompson had grown angry with with the trainer for voicing suspicions about him to the collaborative. If the rumors were out there, one wonders why Thompson’s allegedly free-wheeling ways didn’t show up on Graham’s radar until 2009.

Despite Graham’s letter and an investigation, city funds routed to Keely’s slowed, but they didn’t stop. Financial documents obtained by City Desk show that in 2009, Keely’s received at least one $20,000 grant from the city and at least one $75,000 grant this year. But that was all chump change compared to the past. In 2008, Keely’s received a $200,000 city grant. According to documents obtained via a FOIA request, the organization entered invoices that indicated the money went to things like a $58,000 boxing exhibition. Records indicate that from 2008 to 2010, Keely’s received more than $600,000 in city grants and earmarks. According to the Post, the organization has received $1.4 million in municipal funds since 2004.

Contacted today, Graham said he’s no longer talking to Washington City Paper (though 15 minutes later, he commented to Housing Complex reporter Lydia DePillis on another matter). Graham hung on me before I could ask about the letter. A call placed to Thompson hasn’t yet been returned.

*Photo by Darrow Montgomery