Tag Archives: theft

Comptroller: $563K Stolen from TN County Governments

News release from state Comptroller’s Office:
In the 2012 Report of Cash Shortages, auditors found that $563,372.50 of funds stolen from county governments, some dating back several years, had not been recovered. Details about the missing money can be found in the report, which was released today.
The news in the report wasn’t all bad: For the reporting period, auditors reported new thefts of $106,495.27 – down from $213,635.66 the year before. And – thanks to the recovery of $279,817.21 last year – the statewide balance of uncollected funds dropped from $736,694.44 cited in last year’s report to $563,372.50 in this year’s report.
Information about cash shortages is collected from the annual financial reports and special reports for the state’s 89 counties audited by the Comptroller’s Division of Local Government Audit and the six counties audited by private accounting firms.
In addition to a county-by-county breakdown of cash shortages, the report also provides explanations of how the shortages were detected, how the money was stolen, corrective steps taken by counties and legal actions taken against those responsible for the thefts.
“While it is good to see that the number of new thefts was down last year and a substantial amount of money was recovered, there’s absolutely no reason to be complacent about these statistics,” Comptroller Justin P. Wilson said. “It’s important for our local government officials to constantly remain on guard against the potential theft of taxpayer money. That means they need to have good checks and balances – what our auditors refer to as ‘internal controls’ – in their procedures for how money is collected, recorded, deposited and spent. If adequate safeguards aren’t in place, the amount of stolen money identified in future cash shortage reports is likely to rise.”
To view the report online, go to: http://comptroller.tn.gov/repository/CA/2012/2012%20Cash%20Shortage%20Report.pdf

Prosecutors Say Former Knox Trustee Paid Ghost Employees

KNOXVILLE, Tenn. (AP) — Prosecutors in Knoxville say former Knox County Trustee Mike Lowe paid employees who never performed work.
The Knoxville News Sentinel (http://bit.ly/14wTIJO ) reported documents recently filed in Knox County Criminal Court allege Lowe and two former aides conducted a “continuous larcenous scheme” in which ghost employees were on the payroll.
Lowe, Delbert Morgan and Ray Mubarak face multiple theft charges.
A bill of particulars filed by the district attorney’s office alleges Morgan bilked taxpayers out of nearly $197,000 by not showing up for work over four years.
The newspaper said Gregory P. Isaacs, Lowe’s lawyer, and Tom Dillard, Mubarak’s lawyer, declined comment Tuesday. Jeff Daniel, Morgan’s attorney, could not be reached for comment.
In April 2012, when indictments were returned, Isaacs said Lowe strongly denied the allegations.

Audit Finds Humane Society Employee Stole $51K

News release from state comptroller’s office:
An employee of the Morristown-Hamblen Humane Society altered receipts to conceal the theft of $51,130 from the organization’s adoption fees and other funds, an audit by the Comptroller’s Division of Investigation has revealed.
Receipts in the humane society’s computer system were backdated – up to 11 years before the installation of the computer system – so they would not be included in daily collection reports. That meant money from adoption fees and other sources didn’t appear in the organization’s records. Investigators concluded that money was stolen by the employee, who was later fired.
Investigative auditors reviewed records from July 1, 2009 through October 31, 2011 after Hamblen County officials discovered the altered receipts from collections were not deposited into the humane society’s bank accounts. The stolen funds should have been used to operate the animal shelter, enforce animal control ordinances and conduct animal cruelty investigations.
The employee involved had been responsible for gathering collections, matching collections with receipts and delivering those collections to the bookkeeper for deposit. During questioning by investigators, the employee admitted to backdating one receipt to “borrow” $120. The employee refused to speak with investigators after being fired.
Investigators also found weaknesses in the humane society’s accounting and record-keeping procedures, which made the theft easier to conceal.
“It is very important that there is an appropriate amount of oversight when public funds are being accepted, recorded and spent or deposited,” Comptroller Justin P. Wilson said. “Putting too many responsibilities in the hands of one individual without that kind of oversight can create situations that are ripe for fraud or abuse. It is very unfortunate in this case that money that could have been used to help stray and abused animals in Hamblen County isn’t available for that purpose because of this.”
The Comptroller’s Division of Investigation has forwarded copies of its report and supporting information to the Office of the District Attorney, Third Judicial District.
To view the report online, go to: http://www.comptroller.tn.gov/ia/

Probation Officer Charged With Stealing

SEVIERVILLE, Tenn. (AP) — A state probation and parole officer has been arrested and charged with stealing probationers’ money.
A statement from the Tennessee Department of Correction stated Officer Joshua Keith DeBord was charged with theft over $500 and was booked into the Sevier County Jail.
DeBord is accused of misusing money for fines and court fees paid by offenders he was supervising.
The department said DeBord is on administrative leave pending dismissal.

Political Fundraiser Arrested for Theft in Kingsport

Report from Hank Hayes in the Kingsport Times-News:
The Tennessee Bureau of Investigation today arrested a Greeneville man for stealing money raised by his political action group in charge of organizing a GOP Presidential forum scheduled for October 2011 at the MeadowView Marriott in Kingsport.
The event was never held.
Fabian Farrell Story, 36, was indicted by the Washington County grand jury in November of 2012 on one count of theft over $10,000. Story was the executive director of the group called Conservatives on the Move, allegedly coordinating the political event.
The TBI says Story contacted Johnson City political activist, Phyllis White, on July 1, 2011, to help him raise money and organize the event. White raised approximately $30,000 and deposited it in a Washington County bank. The TBI investigation revealed that Story withdrew the money and it was not refunded to the donors.
Story was arrested by the TBI at the Rutherford County court house where he was appearing on a child support case. He was booked into the Rutherford County Jail on $10,000 bond and will be transported to the Washington County Jail tomorrow.

McCormick Takes Down Democrat’s Signs, Confronts Irate Candidate

Democratic candidate Frank Eaton, who is running against Republican Rep. Richard Floyd of Chattanooga, charged that House Majority Leader Gerald McCormick took down two of Eaton’s campaign signs on Highway 153, reports the Times-Free Press.
McCormick…acknowledged removing the signs Saturday in a telephone call he made moments after a confrontation with Eaton. The lawmaker said the signs were illegally posted on the public right of way in front of a shopping center that he partially owns and manages.
McCormick said Eaton’s two signs and one belonging to a treecutting service were taken down as mowers cut grass. He said he called the treecutter, whose sign included a phone number, and left him a message to come pick up his sign. Not knowing how to call Eaton, McCormick said, he called and left a message for Floyd asking how to contact him.
Then, he said, Eaton and his wife drove up and the candidate demanded to know what he was doing.
“They jumped out and started taking pictures and put me under cross-examination,” McCormick said. “I was out in broad daylight on one of the busiest streets in the county doing my job and my private business, and he got upset about it.”
“I would have pulled down anyone’s sign,” McCormick said.
Eaton sent out a news release in which he described seeing McCormick carrying off one of his signs. (Note: There’s also a video of McCormick in his car, talking with Eaton, HERE.)
“He said the signs had been on his private property and he was removing them,” Eaton said. “I questioned whether the property was his, and then he said the signs were not allowed in the ‘right of way’ of that road.”
…According to Eaton, McCormick said he didn’t know exactly where the property line was.
“I asked if it was his statement that he had removed my signs from a public road without knowing whether they were on his private property or not. He became visibly angry and said, “Are you a lawyer? Is this a cross-examination?'”
He also said McCormick said, “I don’t give a [expletive deleted] what you do. If you want to turn this into a fight, that’s your choice. I guess I’ve given you a reason.”
McCormick said he would have removed anyone’s signs, including Floyd’s, had they been there.
He acknowledged he “may have used some stronger language than necessary but after 10 minutes of being seriously berated … I was fed up.”

State Sets Up New Identity Theft Law Enforcement Unit

NASHVILLE, Tenn. (AP) — Tennessee’s safety department is creating a new unit to investigate identity theft crimes that local law enforcement agencies don’t have the resources to target.
Commissioner of Safety and Homeland Security Bill Gibbons announced on Tuesday that the 14-member unit would be made up of personnel from the Tennessee Highway Patrol, the state Office of Homeland Security and the Driver Services division.
The unit will also work with the U.S. Secret Service in Memphis and Nashville, the federal Homeland Security Investigations department and the FBI’s Memphis division.
Gibbons said identity theft and fraud crimes are a growing problem in Tennessee, but many local law enforcement agencies don’t have enough resources or manpower to investigate these crimes.
“When you go to local law enforcement agencies across the state, they will pretty much tell you that identity crime is one of the toughest types of crimes for them to investigate,” he said. “Very few police departments have investigators that have the expertise to investigate these types of crimes.”

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Pikeville Mayor Charged With Misconduct, Felony Theft

Greg Johnson, who is in his third term as mayor of Pikeville, is free on $10,000 bond after being arrested Wednesday on charges of official misconduct and felony theft in the wake of a months-long investigation by the Tennessee Comptroller of the Treasury Office.
Further from the Chattanooga TFP:
Officials at Pikeville City Hall said Johnson had not come into the office on Thursday. City Hall staff also said he has not submitted any correspondence regarding his plans as mayor.
Johnson, 50, was first elected to the Pikeville Board of Aldermen at age 19.
Mike Taylor, district attorney in the 12th Judicial District, said Thursday that Johnson is charged with four counts of official misconduct and one count of theft in excess of $60,000 on grand jury indictments issued Monday.
Among the accusations is that Johnson spent more than $100,000 on used cars never put in the city fleet, cashed a check for $16,000 for his own use and took a monthly stipend from the city to pay for health insurance when he already had health insurance elsewhere.
The investigation, which covered the period between July 2010 and February 2012, arose from complaints made to the prosecutor’s office around the first of the year, Taylor said.
“Back in the late winter, I started receiving complaints initially about the purchase of some used vehicles that had been stored at [a] building at the industrial park there in Pikeville,” Taylor said.
Soon after, other complaints were made that the mayor “was using public monies for his own use,” Taylor said, so the district attorney contracted the state Comptroller of the Treasury Office.
Bledsoe County Sheriff’s Investigator Ricky Seals said Wednesday that Johnson surrendered at the jail after having his attorney contact local authorities.
Johnson could not be reached for comment, and messages could not be left on his home phone.
Johnson’s legal counsel, Dunlap, Tenn., lawyer Steve Greer, said Thursday he couldn’t comment until he sees the formal indictment and that his comments would be limited even then.
He did say, though, that Johnson probably will keep his mayor’s post for now.

Stealing from a School

News release from state comptroller’s office:
The former bookkeeper of Valley Forge Elementary School in Carter County misappropriated more than $8,000 from the school, an investigation by the Comptroller’s Division of Municipal Audit has revealed.
Investigators found that between July 1, 2009 and December 31, 2010, Tabitha Street, the former school bookkeeper, misappropriated at least $8,542 in various collections from the school and manipulated school records to conceal the thefts.
Street employed what is commonly known as a check-swapping scheme in which certain checks payable to the school were intentionally not recorded into the school’s computer accounting system. Later, Street removed amounts of cash from school deposits and used the unrecorded checks to replace the cash she had taken.
Additionally, investigators found that Street failed to record and deposit at least $2,317 in cash collections specifically related to the school’s 2009 gourmet fundraiser and spring 2010 candy sale fundraiser.
The information uncovered during the audit was referred to the local district attorney general’s office and Street was indicted last month on one count of theft over $1,000 and one count of official misconduct.
The audit, which was released today, also found the school lacked proper safeguards in its collections and financial record keeping and also failed to prepare and maintain profit analysis reports for resale or fundraising activities.
“It is always disappointing when someone abuses a position of public trust, particularly when that position involves handling of funds intended to benefit schoolchildren,” Comptroller Justin P. Wilson said. “This case also illustrates, once again, what can happen when organizations don’t have proper safeguards built into their accounting and record-keeping practices.”
To view the full report online, go to: http://www.comptroller.tn.gov/RA_MA_Financial/Report_Investigative.aspx

Stealing from a Library

News release from comptroller’s office:
A former employee of Millard Oakley Public Library in Overton County stole $5,999.53 in funds intended for the library, an investigation by the Comptroller’s Division of Local Government Audit has found. The investigation involved the review of library receipts, deposits and disbursements over an almost four-year period dating back to July 1, 2008.
The former employee used electronic withdrawals from the library’s checking account to pay for personal expenses such as satellite television, wireless telephone service and credit card bills.
Cash and checks collected on behalf of Friends of the Library, a nonprofit group, were deposited by the former employee into the library’s checking account to conceal the theft of funds resulting from the improper electronic disbursements.
The Comptroller’s report, which was released today, also identified other deficiencies in the way money was handled. For example, the library only issued receipts when they were requested by customers, meaning financial records were incomplete. Also, the former employee was given sole responsibility for making bank deposits, preparing monthly collection reports and issuing monthly checks, which meant no one was double checking that work.
In response to the auditors’ findings, the library director noted that a number of steps have been taken to reduce the likelihood of similar problems in the future.
“There are simple steps in accounting and bookkeeping that can be taken to avoid the types of problems our auditors discovered at Millard Oakley Public Library,” Comptroller Justin P. Wilson said. “I am glad that the library’s director has taken corrective action.”
To view the full report online, go to: http://www.comptroller.tn.gov/la/SpecialReports.asp