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Liberty Township trustee arrested on theft, official misconduct charges

Posted: 1:36 PM, Feb 22, 2017
Updated: 2017-02-22 18:36:39Z

HENRY COUNTY, Ind. --  Liberty Township Trustee Phyllis Shafer was arrested Wednesday on six theft charges and three counts of official misconduct.

Shafer is accused of stealing more than $9,000 from the taxpayers in the eastern Henry County community of 1,455 people. 

Call 6 Investigates was unable to reach her for a response.

State examiner for the State Board of Accounts Paul Joyce said if Shafer is convicted of the crimes, she would have to forfeit her elected position and a caucus would have to select a new township trustee.

A recent SBOA audit found Shafer paid herself excess salaries in 2013, 2014, 2015.

She and the township clerk, John Shafer, also received reimbursements for supplies and services without the proper documentation including computer ink, stamps, tree removal, and cemetery repair.

“No evidence was provided to support the validity of these payments,” according to the audit.

Joyce said current law allows for township officials to be married to each other, such as a township trustee and township clerk.

The township also racked up $1,365.34 in penalties and interest from the Internal Revenue Service because claims and taxes were not submitted on time.

The audit also pointed out that the trustee served as the township executive and the township fiscal officer, and was responsible for all aspects of the township’s financial activity.

“As a result, there was no oversight of Township financial activity on an ongoing basis by another individual,” read the audit. “Due to this lack of segregation of duties, fraudulent payments and improper recordkeeping were able to occur and not be identified timely.”

State auditors spent so much time looking for records, they racked up $2,707 in additional investigation costs they’re also asking Phyllis Shafer to repay.

Call 6 Investigates was unable to reach John Shafer and members of the township board, including the president, for comment Friday morning.

The audit covered January 1, 2013 and December 31, 2015.

Phyllis Shafer has been in office since at least January 1, 2011, records show.

Shafer must pay $15,279.88 in salary overpayments and other misappropriated funds, according to the Indiana State Board of Accounts.

Phyllis Shafer did return $1,360 by personal check on March 19, 2015, records show.

When questioned by state auditors, Shafer said that she was “messed up.”

When contacted by Call 6 Investigates in 2016, Phyllis Shafer asked if the audit would be on the news, but did not provide any further comment.