Call 6 Investigation: Two-thirds of public officials accused of misusing tax dollars not prosecuted

AG files civil suits, hoping to recoup money

INDIANAPOLIS - A three-month Call 6 investigation revealed public officials accused of misusing and even downright stealing tax dollars often escape criminal charges and prison time.

The results come despite a statewide effort by law enforcement, the State Board of Accounts, the Attorney General's Office and other agencies to crack down on public corruption.

Public employees, such as clerk treasurers, trustees and board members, have misappropriated more than $5 million statewide over the past three years, according to the Attorney General's Office.

The Call 6 Investigators spent months digging into public corruption cases and court records and found that just a third of public employees ever faced criminal charges in missing money cases.

Rebecka Fee, former clerk treasurer of Brownstown in Jackson County, was convicted in 2010 of defrauding the town out of $370,000, a quarter of the town's yearly budget. As a result, town employees have gone without raises for six years.

"It's hard to understand. Why do I have to pay for someone else's mistake?" said David Willey, the town's new clerk treasurer. "It's just mistrust, and it's hard to get that trust back."

Willey pointed to buildings that haven't been revitalized because of the public corruption case.

"It hurts the morale of everybody," he said.

Fee is serving 33 months in a federal prison camp in Lexington, Ky., but she is in the minority.

The Call 6 Investigators examined more than 200 public corruption investigations, most from the past three years, and found local prosecutors criminally charged a third of public servants. Of those, only a few served time in prison.

"It’s definitely frustrating," said Deputy State Examiner Paul Joyce, of the State Board of Accounts. "I hear that from our examiners all the time. 'Why did that not go anywhere?’ You know, I really can't answer that question."

Many financial public corruption cases start with the State Board of Accounts, which regularly audits state and local agencies and points out when tax dollars are misappropriated.

"We work hard for our money," Joyce said.

The State Board of Accounts forwards cases to local prosecutors, who have discretion over whether to file criminal charges, and to the Attorney General's Office, which can decide whether to file a civil suit, send demand letters or take other action.

"Not every case is a criminal case," said Johnson County Prosecutor Brad Cooper. "Mismanaging things is not a crime. If we can prove the case, we'll file the case and prosecute it."

Cooper's office did not file criminal charges in any of seven Johnson County public corruption cases examined by the Call 6 Investigators, including a former animal shelter warden who admitted to state auditors she took thousands of dollars. 

"The statute of limitations had run out on the case," Cooper said.

Call 6 Investigator Kara Kenney asked Cooper why charges were not filed in any of the public corruption cases the Call 6 Investigators examined.

"Because we have to have the evidence to prove a case beyond a reasonable doubt," Cooper said, adding that public officials are not given special treatment. "If they're given special treatment, it's to their detriment, because they're looked at more closely."

Cooper said it is frustrating when he knows someone took tax dollars, but he can't file charges.

"Happens all the time," said Cooper. "We’re given an extremely high burden because we don't want to convict innocent people."

The State Board of Accounts estimates about half of public corruption cases involve government employees outright stealing, while the other half involves public servants just not doing their jobs well, at taxpayer expense.

The Call 6 Investigators analyzed court records and found that many involved in public corruption are facing other pressures, such as foreclosure, bankruptcy and divorce.

The Attorney General’s Office has filed civil suits in more than half of the public corruption cases examined by the Call 6 Investigators.

The AG's office told RTV6 that it's easier to prove a civil case than a criminal case.

"Our job is just about the money," said Attorney General Greg Zoeller. "(Local prosecutors) have a harder burden. They've got to prove the intent, and they've got to convince a jury of local residents that may all know this person."

Zoeller’s office uses civil lawsuits, demand letters, promissory notes and other means to get people to pay up.

They’ve collected $2.4 million, in part because the office doesn't give up easily.

"Some of them tell us they were going to put the money back," said Zoeller. "I’m not in the position to feel sorry for people. I'm there to collect the public's money back."

Former Family and Social Services Administration employee David Scott served four years in prison for stealing from the taxpayers, and the AG's office is still trying to get him to pay up 13 years after the conviction.

"It’s important these ex-public officials understand, the state is patient and won't give up in trying to get some of the money back," said Andrew Swain, deputy attorney general. "The state will keep chipping away to get some of these monies back."

Scott still owes $464,000, according to the state.

"I am sorry," Scott said as he ran down stairs and away from Kenney.

Scott and his convicted accomplice, Brenda Mayfield, would not tell RTV6 why they stole from taxpayers, but both told the judge they would pay $50 a month in restitution.

"No questions," said Mayfield when asked about the $218,000 she owes. "I apologize. I’m going to do my best to repay everything and make everything right."

The Call 6 Investigators were in Bedford as former Mitchell school clerk treasurer Kathy Kirk pleaded guilty to forgery, theft and corrupt business influence.

"Why would you take $110,000 from the taxpayers? You pleaded guilty. Can you give us some sort of explanation of why you did it?" Kenney asked Kirk, who responded by saying she is sorry.

A judge is set to decide Nov. 27 whether to send Kirk to prison and if she will have to repay the money.

In Howard County, prosecutors didn't charge former Harrison Township Trustee John Harbaugh Jr., yet the AG's office is suing him in a case in which $16,000 of taxpayer funds were misappropriated.

"You want to talk to my lawyer," Harbaugh said. "I'd rather just end it."

The Marion County Prosecutor's Office has not filed criminal charges against former Indiana Department of Correction Clerk Melody Snelson, who was accused of misappropriating more than $100,000.

Brienne Delaney, spokeswoman for the prosecutor's office, would not confirm if an investigation is ongoing.

The Attorney General's Office has filed a civil suit against Snelson and is awaiting a judgment.

The Call 6 Investigators mailed more than 65 letters to public officials accused of misusing or stealing tax dollars, but none would agree to do an on-camera interview, including Snelson and Fee.

In Brownstown, workers and citizens are still trying to move on from the effects of Fee’s public corruption case.

Fee has already repaid $500 in restitution, but still owes more than $369,000. She is expected to be released from prison in May.

The Attorney General’s Office plans to push for legislation in the upcoming session that would require an additional signature on expenses, thus providing an extra set of eyes on the books.

More: Top 10 defendants by current balance owed (from the Indiana Attorney General's Office) -- http://media.theindychannel.com/docs/10-2-12-AG-Civil-Prosecution-Chart-Updated.pdf

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