NC auditor sees ‘potential criminal activity’ in spending by former Cary town manager

An initial forensic analysis shows that some transactions made under Cary’s ousted Town Manager Sean Stegall indicate potential criminal activity, the State Auditor’s Office says.

A review of procurement card data found “several transactions that are potentially indicative of fraud,” the office’s Investigative Division announced in a Monday press release.

Referencing the auditor’s report and publicly reported information, Wake County District Attorney Lorrin Freeman said that it is likely that she, along with Cary Police Chief Police Terry Sult, will request an independent review by the State Bureau of Investigation.

Some of the potential crimes that could be investigated include misuse of public funds, obtaining property by false pretenses and embezzlement, Freeman said.

She is reviewing the preliminary report from the State Auditor’s Office and expects to make a decision on whether to open a criminal investigation in “the next day or two,” she said.

Stegall was placed on leave and ultimately resigned late last year under pressure from the town council for “over-the-top” spending, questionable decisions made without the full council’s knowledge and creating an unhealthy work environment, according to Cary Mayor Harold Weinbrecht. The State Auditor’s Office began its investigation in early December.

“As we move forward with our own review into the Town of Cary, the State Auditor’s Office will continue working with law enforcement officials and the Wake County District Attorney’s Office on this matter,” the auditor’s office press release said. “Our goal is to be as useful as possible in providing information that may support any prosecution of criminal activity.”

Weinbrecht released a written statement late Monday afternoon that read: “The State Auditor has raised concerns about potential legal violations by Sean Stegall that we take very seriously. Once presented to us, we will review the Auditor’s findings carefully and will partner fully with any additional investigations.”

The statement added that when town leaders acted in November, the month when Stegall was put on involuntary leave, the decision “was based on values, not legal determinations. If legal lines were crossed, that reinforces the importance of acting when standards aren’t being met.“

The News & Observer has reached out to Stegall for comment.

Questionable spending in Cary

If the state finds credible evidence that Stegall broke the law while Cary’s town manager, his almost $200,000 in severance pay could be in question. No severance is to be paid if he is found guilty of “fraud or moral turpitude,” according to his contract.

That fact, and a call to withhold the severance until the auditor has completed the investigation, has been highlighted by the Wake County Republican Party, The News & Observer has reported.

The investigation comes after Stegall’s departure and after The N&O’s reporting into an over $1 million land deal made without council’s approval and town money being spent to fund Mayor Pro Tem Lori Bush’s Northwestern master’s degree, which she repaid.

The N&O also revealed that Stegall submitted a lost-receipt form for $3,400 spent at a hotel “for multiple staff” during a trip to Austin, Texas. But documents obtained by The N&O show that staff attending the conference stayed at a different hotel.

And the town also paid over $150,000 to produce and promote a book that, in part, lauds Stegall’s vision for municipal leadership, records obtained and reviewed by The N&O show.

The paper revealed those transactions shortly before Cary residents voiced concern and frustration with the mayor and town council during a town meeting last week over decisions Stegall made.

Cary also has hired Womble Bond Dickinson Law Firm to investigate the situation, Weinbrecht said in December “to ensure that we are fully aware of any problems and that we put process changes in place so that something like this will never happen again.”

This story was originally published January 12, 2026 at 4:26 PM.