CALL 6: Ex-Treasurer must pay $89,412 in restitution, serve two years probation

New audit criticizes Karen Stanley, town

HENRY COUNTY --  The former clerk treasurer for the Town of Kennard in Henry County must pay $89,412 in restitution after pleading guilty to wire fraud.

Call 6 Investigates first told you about Karen Stanley in 2016 when a federal grand jury indicted her on three counts of wire fraud.

Stanley was accused of stealing more than $80,000 in taxpayer money by overpaying herself while in office, from 2012 to 2015.

According to an audit released this week from the State Board of Accounts, Stanley used taxpayer money to pay thousands of dollars in personal utility bills.

State auditors also criticized the town’s lack of internal controls.

“Stanley, as the only employee in the accounting office, was responsible for billing wastewater customers, collecting payments from customers, preparing deposit slips, depositing payments, posting the funds ledger, reconciling bank accounts, and maintaining and reconciling accounts receivable records,” read the newly released audit. “The Town Council did not routinely compare the monthly activity to any ledgers or bank statements or review any accounts receivable records.”

In a written response to the State Board of Accounts, town officials said they improved their procedures.

“The elected officials of the Town of Kennard will take the appropriate steps to make certain that procedures are instituted which will prevent occurrences such as the ones presented in this audit from reoccurring,” read the town’s response.

READ | Ex-Kennard clerk-treasurer indicted for wire fraud

As part of a plea agreement reached in 2017, Karen Stanley pleaded guilty to one count of wire fraud and the court dismissed the other counts.

She received two years probation, which would likely run until May 2019.

Stanley must pay $89,412 in restitution including $75,318 to the Town of Kennard and $14,094 to CNA Surety.

The Town of Kennard has a population of just under 500 people.

The FBI and Indiana State Police conducted a criminal investigation which led to the wire fraud indictment.

It’s not yet clear if Stanley has paid any of the restitution.

Call 6 Investigates was unable to reach Stanley’s attorney, Mario Garcia, for comment Friday afternoon.

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