CRANSTON, R.I. (WPRI) — R.I. Attorney General Peter Neronha announced Monday that R.I. Division of Motor Vehicles administrator Walter “Bud” Craddock won’t face charges over an alleged sex-for-pay operation at one of his rental properties, but said he still had serious questions about the top state official’s judgment.

The announcement comes nearly one year after Gov. Dan McKee directed the state police to investigate Craddock following a raid last June by Cranston police as part of a sweeping investigation into suspected prostitution operations across the city. One of the properties raided was 1732 Broad St., which is owned by Craddock and his wife Lynne Urbani-Craddock — who serves as policy director for the R.I. House of Representatives — through their real estate holding company LUC Realty Holdings LLC.

Neronha’s office said state police investigators finished their probe of the matter last October, finding there was “no evidence that Mr. Craddock had any criminal liability,” and at that point asked the attorney general to review their findings.

“Having reviewed the State Police investigation, this Office concludes that we have not been presented with evidence sufficient to establish, beyond a reasonable doubt, the requisite knowledge by Mr. Craddock of the criminal commercial sexual activity occurring on his property such that a criminal prosecution is possible and warranted,” Neronha wrote in a letter to State Police Col. James Manni made public on Monday.

At the same time, Neronha wrote, “there was no official record of a business registered at that location, no massage license displayed inside the unit, no business name on the exterior of the building or door, an interior surveillance camera, and garbage bags taped over the windows.”

“These are not the trappings of a legitimate commercial operation,” he added.

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1732 Broad St. in Cranston.

Craddock, who previously served 26 years as a Cranston police officer, declined to comment through a personal spokesperson.

The governor’s office offered no response to the criticisms of Craddock leveled by Neronha, issuing a statement that emphasized the investigation was requested by McKee and that “two highly respected organizations” have now found “no criminal activity or evidence of wrongdoing.”

“This matter will now be referred to the state’s HR department,” McKee spokesperson Matt Sheaff said.

Craddock, 69, has repeatedly denied knowledge of anything nefarious happening at his property. The building was raided for the same reason in 2017, and he’d had the same tenants since 2016, but the DMV leader claimed that nobody ever alerted him to the fact that there’d been a problem.

Following the 2021 raid, Craddock filed court documents to evict his tenant. A R.I. Superior Court judge ruled in favor of Craddock last August, according to court records.

Despite not finding enough evidence to charge Craddock, Neronha laid out in detail why he thought the former police officer should have recognized that an illicit business was operating on his property.

“Certainly, the information presented by the State Police to this Office suggests that there were multiple red flags that should have at least given Mr. Craddock pause concerning the nature of the business operated by his first-floor tenant,” Neronha wrote.

“Given his law enforcement background, Mr. Craddock likely had reason to suspect that this was not a legitimate commercial enterprise,” he added.

The attorney general said some of Craddock’s answers to State Police “strain credulity.” As an example, he pointed out that Craddock said he began collecting rent in cash from the tenant during the pandemic, which Neronha said “makes little sense.”

“If nothing else, the pandemic prompted most people to have fewer personal interactions, rather than more,” Neronha wrote. (The rent was $1,125 a month, according to a lease reviewed by investigators.)

Neronha also pointed out that Craddock didn’t seem to notice that State Police had busted down the door of his Broad Street property in 2020, when the High Intensity Drug Trafficking Task Force had served a search warrant tied to a drug investigation in Central Falls. No drugs were found, according to Neronha.

“His statements to investigators that he believed that the plastic bags taped over the windows (as compared to more typical window treatments, such as shades) were to keep light out (as opposed to preventing someone from observing the activity within), and that he never learned why the broken-down door to the firstfloor unit required replacement, are curious, at best,” Neronha wrote.

“Putting all this together, regarding the critical issue of whether Mr. Craddock had knowledge of the criminal commercial sexual activity occurring at his building at 1732 Broad Street, there is ample smoke,” he added.

Neronha’s announcement puts an end to one of multiple investigations his office is leading into the McKee administration. The attorney general continues to investigate the governor’s former chief of staff, Tony Silva, in connection with a controversial wetlands property in Cumberland. As with the Craddock case, McKee also requested the Silva investigation.

Separately, Neronha, the Rhode Island U.S. Attorney’s Office and the FBI are investigating whether any laws were broken when the McKee administration awarded a lucrative state education contract to the politically connected consulting firm ILO Group. McKee did not request that investigation and has repeatedly denied any wrongdoing.

Neronha’s report evoked sharp criticism from Rhode Island GOP chairwoman Sue Cienki, who issued a statement calling on the governor to “can Craddock,” arguing he either knew illegal activity was going on “or he should have known there was.”

“The question now is whether McKee will fire Craddock,” Cienki said. “If McKee does not fire Craddock, then either McKee is a fool who believes Craddock is completely honest or McKee is fine if a member of his administration turned a blind eye to human trafficking.”

Eli Sherman (esherman@wpri.com) is a Target 12 investigative reporter for 12 News. Connect with him on Twitter and on Facebook.

Tim White, Ted Nesi and Alexandra Leslie contributed to this report.