The former CEO of the defunct nonprofit manager Strong City Baltimore has pleaded guilty to one count of federal misdemeanor bank theft, admitting that he misused paycheck protection funds to cover the organization’s mismanaged finances.

Reginald Davis entered the plea Friday during what had been scheduled to be a motions hearing ahead of his upcoming trial, according to court records. His sentencing is now scheduled for Sept. 30.

Davis “did not take one penny for himself in this case,” his attorney, Gerald Ruter, said on Monday.

“We did not believe Mr. Davis was guilty of wire fraud or money laundering,” Ruter said, referring to charges included in the initial indictment. “However, Mr. Davis has accepted responsibility and pled guilty to a misdemeanor knowing that PPP money should not have been used to repay fiscal sponsored organizations money that was rightfully theirs.”

Davis was charged in 2023, three years after Strong City clients began speaking out, saying the nonprofit once known as the Greater Homewood Community Corporation had botched their finances and left them unable to carry out their missions. Strong City served in the role of a fiscal sponsor, managing more than $14 million in funds and administrative work on behalf of more than 150 smaller organizations. The organization also ran the Adult Learning Center on East Biddle Street.

The indictment alleged that in 2021, Davis took out Paycheck Protection Program loans to cover shortfalls in the money Strong City owed to nonprofits. He did so, according to prosecutors, without telling the organizations they worked with that the funds were proceeds of a PPP loan or that there were restrictions on how the funds could be used.

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“Davis actually intended to purloin and use the funds impermissibly to pay off Strong City’s pre-existing debts to other non-profits,” his signed plea agreement reads.

Davis was the only employee charged even though the indictment accuses him of devising a scheme to defraud with “others known and unknown to the grand jury.”

In recent months, federal prosecutors raised more questions about Davis’ conduct, saying that Strong City was the victim of a $170,000 check fraud at the hands of “unknown actors” and that Davis avoided reporting the theft to conceal his own crime.

Prosecutors said a Strong City board member at the time urged Davis to report the fraud.

“Do you agree? I believe we need answers on this matter urgently,” the board member wrote, according to prosecutors.

“It is not necessary to alert the FBI at this point,” Davis replied.

Nearly three months later, Davis walked into the Baltimore Police Department’s Eastern District precinct shortly before midnight to report the theft to an intake officer, prosecutors said.

“The theft occurred only days after the same bank account received the very PPP funds at issue in this case,” Assistant U.S. Attorneys Joseph L. Wenner and Ariel D. Evans wrote of the allegedly misused Paycheck Protection Program funds.

Davis’ plea agreement says he faces a maximum sentence of one year in prison and a $100,000 fine. Actual sentences tend to be far lower than the maximum penalty.