INDIANAPOLIS - A former Lebanon city employee has avoided prison time for stealing cash that people paid to apply for gun permits.

A 2012 audit from the Indiana State Police found suspicious activity in the City of Lebanon fund that was supposed to contain money for gun permit application fees.  The discrepancy started in 2006 and investigators quickly traced the money to Lebanon Police Department employee Jamie Houghton.

The FBI was called in and agents found she was the city worker responsible for collecting cash and check permit fees, ranging from $10 to $50 each. Houghton admitted to agents that she was pocketing the money and she signed a written confession.

She resigned her police department job on Oct. 5, 2012, according to federal court records.

Houghton was charged with a federal felony count of stealing from federal funds since the Indiana gun license program also involves federal money.

While she could have been sentenced to 10 years in federal prison, her plea bargain allowed her to receive probation.  She will serve three years of probation, and she was ordered to repay the $32,250 that she stole from the gun license account in Lebanon.

FBI agents noted that most of the gun permit fees were paid with money orders, and Houghton always deposited those funds as she was required to do.  Agents said she admitted to pocketing the fees that were paid in cash over the six-year time frame.