Indiana Attorney General files suit against Ray
Herald Argus
Posted: Tuesday, March 4, 2014 - 12:00 am
Posted: Tuesday, March 4, 2014 - 12:00 am
LaPORTE — Despite filing a lawsuit Monday against former La Porte County deputy auditor Mary Ray for some $660,000 worth of allegedly embezzled money, Indiana Attorney General Greg Zoeller said it's going to be an uphill battle before all the funds can finally be collected.
Zoeller spoke Monday after filing the suit—officially a complaint to recover public funds—in the La Porte County Courthouse. La Porte County is a co-plaintiff in the case, and La Porte County Attorney Shaw Friedman is a signatory on the lawsuit.
Zoeller said the complaint is the first step in allowing his office, which acts largely as a collection agency for municipalities, to go after Ray's assets.
Ray is being accused of taking some $153,000 from the county between Sept. 19, 2011, and Dec. 31, 2012. According to an audit filed by the State Board of Accounts on Feb. 21, there were 150 instances where she allegedly embezzled the funds.
Ray's assets, including four vehicles and a house, were previously frozen on Sept, 6, 2012, after a temporary restraining order was filed in La Porte Count Circuit Court.
Since then the state has asked for an additional $45,815 to cover the cost of the audit, and Zoeller said his office and the county are also asking for treble damages, three times the amount of missing funds, to cover the expenses and troubles incurred by the plaintiffs because of the loss.
The treble amount is $459,000.
The lawsuit contains two counts, the first being the roughly $200,000 of the embezzled amount and the cost of the audit, and a second count for the treble damages. All together the amounts total some $660,000.
"We save these types of actions for people who have made off with public funds," Zoeller said. "But this one is going to be a little more difficult because the local government doesn't have a (surety) bond on the employee handling the funds."
He noted that the bonding company is usually the one to go after the assets, while the bond covers most of the county's losses.
La Porte County Attorney Shaw Friedman said the problem with the bonds has since been corrected. He said the current board of commissioners, who took office at the beginning of 2013, moved early on to cover elected officials and their deputies with bonds in case of financial mismanagement.
But he said the events of this case took place before that happened, so there were no bonds in place. He noted that the county has insurance, but commissioners have elected to go after whatever assets they can from Ray before filing any claims. He said these insurance policies are expensive and hard to get.
Zoeller said his office, if it wins the case, can garnish Ray's wages, go after her bank accounts and any other assets it can find to recover all the lost money. But if she doesn't have a lot of money, it will take years of using these methods to get the money back.
"We'll have to see what kind of assets we have to find," he said.
"But one of the reasons I always try and encourage local governments to have bonds is to make sure we have this insurance against embezzlement. It's not all that rampant throughout Indiana….it's less than 1 percent of the people, but it is a good insurance policy against those who might be tempted to take money."
The investigation began after a bank deposit bag was discovered with $3,200 in missing cash in a local library. When a $1,800 discrepancy between receipts and deposits was found, examiners from the State Board of Accounts launched a preliminary audit.
According to a press release from the attorney general's office, certain checks were held for a period of time instead of being recorded or deposited, and then substituted for unrelated cash payments to the county. Swapping the unrecorded checks for cash allowed the deposits to still balance with the amount of funds listed as receipted.
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