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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. One can only wonder whether Mr. Kimmel was paid for his work by Mr. Burgh ... or whether that bill fell to the citizens of Indiana, many of whom cannot afford attorneys for important matters. It really doesn't take a judge(s) to know that "pavement" can be considered a deadly weapon. It only takes a brain and some education or thought. I'm glad to see the conviction was upheld although sorry to see that the asphalt could even be considered "an issue".

  2. In response to bryanjbrown: thank you for your comment. I am familiar with Paul Ogden (and applaud his assistance to Shirley Justice) and have read of Gary Welsh's (strange) death (and have visited his blog on many occasions). I am not familiar with you (yet). I lived in Kosciusko county, where the sheriff was just removed after pleading in what seems a very "sweetheart" deal. Unfortunately, something NEEDS to change since the attorneys won't (en masse) stand up for ethics (rather making a show to please the "rules" and apparently the judges). I read that many attorneys are underemployed. Seems wisdom would be to cull the herd and get rid of the rotting apples in practice and on the bench, for everyone's sake as well as justice. I'd like to file an attorney complaint, but I have little faith in anything (other than the most flagrant and obvious) resulting in action. My own belief is that if this was medicine, there'd be maimed and injured all over and the carnage caused by "the profession" would be difficult to hide. One can dream ... meanwhile, back to figuring out to file a pro se "motion to dismiss" as well as another court required paper that Indiana is so fond of providing NO resources for (unlike many other states, who don't automatically assume that citizens involved in the court process are scumbags) so that maybe I can get the family law attorney - whose work left me with no settlement, no possessions and resulted in the death of two pets (etc ad nauseum) - to stop abusing the proceedings supplemental and small claims rules and using it as a vehicle for harassment and apparently, amusement.

  3. Been on social security sense sept 2011 2massive strokes open heart surgery and serious ovarian cancer and a blood clot in my lung all in 14 months. Got a letter in may saying that i didn't qualify and it was in form like i just applied ,called social security she said it don't make sense and you are still geting a check in june and i did ,now i get a check from my part D asking for payment for july because there will be no money for my membership, call my prescription coverage part D and confirmed no check will be there.went to social security they didn't want to answer whats going on just said i should of never been on it .no one knows where this letter came from was California im in virginia and been here sense my strokes and vcu filed for my disability i was in the hospital when they did it .It's like it was a error . My ,mothers social security was being handled in that office in California my sister was dealing with it and it had my social security number because she died last year and this letter came out of the same office and it came at the same time i got the letter for my mother benefits for death and they had the same date of being typed just one was on the mail Saturday and one on Monday. . I think it's a mistake and it should been fixed instead there just getting rid of me .i never got a formal letter saying when i was being tsken off.

  4. Employers should not have racially discriminating mind set. It has huge impact on the society what the big players do or don't do in the industry. Background check is conducted just to verify whether information provided by the prospective employee is correct or not. It doesn't have any direct combination with the rejection of the employees. If there is rejection, there should be something effective and full-proof things on the table that may keep the company or the people associated with it in jeopardy.

  5. Unlike the federal judge who refused to protect me, the Virginia State Bar gave me a hearing. After the hearing, the Virginia State Bar refused to discipline me. VSB said that attacking me with the court ADA coordinator had, " all the grace and charm of a drive-by shooting." One does wonder why the VSB was able to have a hearing and come to that conclusion, but the federal judge in Indiana slammed the door of the courthouse in my face.

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