Targeting stolen money

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The Office of the Indiana Attorney General has filed more than three-dozen lawsuits against public officials accused of misappropriating taxpayer money, and local courts and clerks are not immune to those issues.

More claims have been filed since Greg Zoeller took office as compared to previous AG administrations, in part because of a law enacted in 2009. The statutory change has given the state’s top attorney more scrutiny of these situations earlier in the process, allowing for the attorney general to freeze a person’s assets until a final audit report is completed and any legal action is decided. The statutory change also increased the surety bond amounts that local governments carry, meaning that bond can be used to reimburse public funds after a theft or fraud.

greg zoeller Zoeller

Zoeller’s increased attention on public office conduct continues his track record of targeting public corruption and making sure public money is used properly. His efforts have also opened up discussion about how misappropriations are happening in the first place.

“Employee theft and embezzlement is all the more serious when the person is a public servant,” Zoeller said. “Our office zealously pursues those officials who violate the public’s trust to recover for the taxpayers the public funds owed to them.”

Since Zoeller took office in January 2009, he’s filed 37 suits against former public employees to recover more than $1 million. Those suits range from school, police and fire officials to local government officials at county and township offices.

The State Board of Accounts reports that these situations don’t seem to be happening more, but that the new state statute is allowing the AG to file more actions in court to recover money. Often, the audits find local officials don’t keep adequate records. It’s only when the audits show clear evidence that a pattern exists or someone intended to misappropriate money that the AG is brought in to file suit and recover money.

Four cases have been filed as a result of audits showing problems in some small town Indiana courts and clerks’ offices relating to court operations.

The most recent examples came within a week of each other in late September and early October, involving local court operations in Martinsville and Merrillville.

On Sept. 27, Zoeller filed a suit against Cathy Neal, former court clerk of the Martinsville City Court who’s accused of misappropriating $35,569. Neal was responsible for receiving court money such as bond payments and fines, but a state audit found she delayed depositing money for significant lengths of time – on average 62 days. An audit showed the unpaid balance once receipts were reconciled with deposits, and the State Board of Accounts seeks that amount plus $14,265.62 in auditing costs.

On Oct. 4, Zoeller filed a civil suit against former Merrillville Town County Clerk Virlissa Crenshaw to recover funds that had been diverted inappropriately. Crenshaw, as town court clerk, was responsible for collecting bond money, turning it over to the court and keeping records of those amounts. But a State Board of Accounts audit found that for more than five years, Crenshaw appeared to have diverted $310,325 in cash and surety bonds from 456 cases, and some records were entered incorrectly to conceal the loss.

In July, the AG filed a case involving the incumbent LaGrange County Clerk Beverly S. Elliott. According to the state audit, between September and December 2008, the clerk’s office received $6,401 in court fines and fees by credit card, but records show that amount was never deposited into the bank. Another problem found in the state audit involved a trust fund that had been earning interest, and after the trust fund was closed, the clerk overpaid the recipient by $1,600 out of the wrong account. Other bank account shortages were also found, reflecting a total of $18,387 that Elliott owes.

The civil lawsuits against Neal, Crenshaw and Elliott are pending.

misappropriationPrior to Elliott’s case, the last court-related misappropriation suit was in late 2009 and that was one of the first filed under the state’s revised statute.

Non-attorney Bicknell City Court Judge David Andrew Moreland was the sitting judge at the time he was accused and eventually convicted of theft of nearly $21,000 in court funds. A State Board of Accounts audit found Moreland began pocketing the money when he became a judge in January 2008.

The civil suit accused Moreland of failing to enter motorists’ traffic violation payments into the court’s cash book; that he and his wife wrote themselves checks for personal use from the court-fees account; and Moreland used his sole key to a lockbox to conceal fines that people had paid to the police department when the court office was closed. A total of 93 infractions tickets weren’t entered into the system and that money was misappropriated, the suit said.

Moreland was ultimately removed from the bench and the Knox Circuit lawsuit recovered the money and court costs. He and his wife were also convicted of theft in a separate criminal lawsuit.

While those four cases may seem small in comparison to the 37 total, the AG’s office says they reflect a systematic flaw that must be fixed. Those public offices are supposed to be held more accountable because they’re responsible for administering justice. AG spokesman Bryan Corbin said accurate numbers weren’t kept before Zoeller took office on the amount of public misappropriation cases, but he said the sense from those in the office is that these suits are happening more often because of Zoeller’s continuing effort to combat public corruption statewide.

“This has been a trend only in the sense that misappropriation occurs in various city, county, town and township offices all across the state,” Corbin said. “Regardless of the level of government or geography, what these cases typically have in common is there was insufficient oversight.”

That oversight is a focus for Zoeller during the next legislative session. He’s recommending legislation that would require additional safeguards such as dual signatures on expenditures and involvement by multiple people during the bookkeeping process.

No draft bill has been prepared at this time, according to Corbin, but he said the AG plans to push that effort once the session begins.

“We must do more to protect against breaches of public responsibility and reassure the public that this will not be tolerated,” Zoeller said. “This is why I will be asking the Indiana General Assembly next session to pass a bill that would deter such embezzlements.”•


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  1. Especially I would like to see all the republican voting patriotic good ole boys to stop and understand that the wars they have been volunteering for all along (especially the past decade at least) have not been for God & Jesus etc no far from it unless you think George Washington's face on the US dollar is god (and we know many do). When I saw the movie about Chris Kyle, I thought wow how many Hoosiers are just like this guy, out there taking orders to do the nasty on the designated bad guys, sometimes bleeding and dying, sometimes just serving and coming home to defend a system that really just views them as reliable cannon fodder. Maybe if the Christians of the red states would stop volunteering for the imperial legions and begin collecting welfare instead of working their butts off, there would be a change in attitude from the haughty professorial overlords that tell us when democracy is allowed and when it isn't. To come home from guarding the borders of the sandbox just to hear if they want the government to protect this country's borders then they are racists and bigots. Well maybe the professorial overlords should gird their own loins for war and fight their own battles in the sandbox. We can see what kind of system this really is from lawsuits like this and we can understand who it really serves. NOT US.... I mean what are all you Hoosiers waving the flag for, the right of the president to start wars of aggression to benefit the Saudis, the right of gay marriage, the right for illegal immigrants to invade our country, and the right of the ACLU to sue over displays of Baby Jesus? The right of the 1 percenters to get richer, the right of zombie banks to use taxpayer money to stay out of bankruptcy? The right of Congress to start a pissing match that could end in WWIII in Ukraine? None of that crud benefits us. We should be like the Amish. You don't have to go far from this farcical lawsuit to find the wise ones, they're in the buggies in the streets not far away....

  2. Moreover, we all know that the well heeled ACLU has a litigation strategy of outspending their adversaries. And, with the help of the legal system well trained in secularism, on top of the genuinely and admittedly secular 1st amendment, they have the strategic high ground. Maybe Christians should begin like the Amish to withdraw their services from the state and the public and become themselves a "people who shall dwell alone" and foster their own kind and let the other individuals and money interests fight it out endlessly in court. I mean, if "the people" don't see how little the state serves their interests, putting Mammon first at nearly every turn, then maybe it is time they wake up and smell the coffee. Maybe all the displays of religiosity by American poohbahs on down the decades have been a mask of piety that concealed their own materialistic inclinations. I know a lot of patriotic Christians don't like that notion but I entertain it more and more all the time.

  3. If I were a judge (and I am not just a humble citizen) I would be inclined to make a finding that there was no real controversy and dismiss them. Do we allow a lawsuit every time someone's feelings are hurt now? It's preposterous. The 1st amendment has become a sword in the hands of those who actually want to suppress religious liberty according to their own backers' conception of how it will serve their own private interests. The state has a duty of impartiality to all citizens to spend its judicial resources wisely and flush these idiotic suits over Nativity Scenes down the toilet where they belong... however as Christians we should welcome them as they are the very sort of persecution that separates the sheep from the wolves.

  4. What about the single mothers trying to protect their children from mentally abusive grandparents who hide who they truly are behind mounds and years of medication and have mentally abused their own children to the point of one being in jail and the other was on drugs. What about trying to keep those children from being subjected to the same abuse they were as a child? I can understand in the instance about the parent losing their right and the grandparent having raised the child previously! But not all circumstances grant this being OKAY! some of us parents are trying to protect our children and yes it is our God given right to make those decisions for our children as adults!! This is not just black and white and I will fight every ounce of this to get denied

  5. Mr Smith the theory of Christian persecution in Indiana has been run by the Indiana Supreme Court and soundly rejected there is no such thing according to those who rule over us. it is a thought crime to think otherwise.