The Virginia State Police’s criminal probe into alleged financial crimes at the Suffolk Shelter for the Homeless continues to expand.

&uot;We started out looking at one thing but every day something new surfaces,&uot; said Lt. S.L. Chumley, head of the agency’s Chesapeake division office. &uot;I expect it will take us several weeks to go through the documents.&uot;

State police launched the investigation about two weeks ago at the request of its board of directors.

The move came days after Terry Miller, the shelter’s executive director for the past four years, resigned under pressure from the board.

Miller said she quit after being unable to answer questions over her mileage reimbursements, which totaled about $12,500 in 2004.

Chumley refused to elaborate on details of the investigation, only saying it involves embezzlement and mismanagement of money.

According to recent published reports, the shelter submitted duplicate bills and received reimbursement from two different agencies on multiple occasions between July 2004 and February 2005.

Both the city of Suffolk and the Virginia Department of Housing and Community Development disburse grant money to the shelter, most of which is provided by the U.S. Department of Housing and Urban Development (HUD), the report said.

A call to Miller was not returned.

The HUD has offered to send in a team of specialists to assist with the investigation, Chumley said.

&uot;We welcome the suggestions from HUD,&uot; Chumley said. &uot;We are not opposed to their offer but details haven’t yet been decided.&uot;

Because federal dollars are involved, the case, if charged are filed, may be prosecuted in federal court, he said.

The state is using special agents who specialize in checking audits and financial records for evidence of various types of fraud, he said.

The city recently decided to withhold the federal grant money it administers, as well as the city’s annual allocation, until changes are made in the shelter’s operations, said city spokesman Dennis Craff.

This year, the shelter received $65,000 in federal Community Development Block Grant money through the city.

Also, the Suffolk Redevelopment and Housing Authority didn’t give the shelter its usual $25,000 allocation this year.

The funding reduction accounts for nearly half – $123,000 – of the shelter’s $300,000 annual budget for the fiscal year beginning July 1.

allison.williams@suffolknewsherald.com