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The Scoop

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Zoeller seeks $18,000 from LaGrange County clerk

The Indiana attorney general's office issued this news release today:

INDIANAPOLIS – Today Indiana Attorney General Greg Zoeller filed a civil suit against the county clerk of LaGrange County to recover more than $18,000 misappropriated from the government office and reimburse the public treasury.

“It is truly disappointing when a sitting officeholder sworn to uphold the public trust fails to properly handle the tax dollars entrusted to her care. Such a breach of trust leaves the State no choice but to file suit,” Zoeller said.

The Attorney General today filed a lawsuit for recovery of public funds against Beverly S. Elliott, the incumbent LaGrange County clerk. The civil case was filed today in LaGrange County Superior Court 1.

Examiners from the State Board of Accounts (SBoA) reviewed the finances of the Clerk’s Office. Their certified audit report of June 28 found several instances of misappropriation:

  • From September to December of 2008, the Clerk’s Office allowed citizens to pay court fines and fees by credit card. But $6,401 in payments that the clerk’s records show were made by credit card were never deposited into the Clerk’s Office bank account, almost all of them from a single day, September 5, 2008. Elliott as county clerk is legally responsible for the amount and the SBoA asks that she reimburse it.
  • The Clerk’s Office was in charge of maintaining a trust fund that had been earning interest since January 2006. In December 2009 the court ordered the trust fund closed and the proceeds disbursed to the trust recipient. Appraisals costing $1,600 should have been paid out of the trust fund, but instead the clerk paid the appraisal fee out of the wrong account – meaning that when she disbursed the trust fund, she overpaid the recipient by $1,600, the audit report said. Noting that the overpayment would not have occurred if the clerk had properly reconciled bank accounts and interest payments to her records, the SBoA asks that Elliott reimburse the county the $1,600.
  • Shortages in bank accounts the clerk’s trust fund totaled $1,308.56 on February 28, 2011.
  • A discrepancy between the Clerk’s Office receipts and bank account totaled $500 on December 9, 2010.
Before the SBoA audit began, a cash deposit of $4,866.43 was made into a dormant account on February 17, 2011, that partially covers the amount owed to the county, the audit report said. Funds misappropriated, diverted or unaccounted for are the clerk’s personal responsibility, the audit noted. Another $8,593.75 in SBoA audit costs was charged to Elliott, meaning the audit report found she owes a total amount of $18,386.88.

When the State Board of Accounts certifies an audit report, it authorizes the Attorney General’s Office to serve as collection agent for the State and recover misappropriated money. The lawsuit Zoeller’s office filed today seeks triple damages, attorneys’ fees, costs and interest. If the court enters a civil judgment against the defendant, then the State can pursue a collections action like any creditor seeking to collect from a debtor.

Simultaneously, the Attorney General today also filed a motion seeking a preliminary injunction. It asks the court to freeze Elliott’s assets to prevent her from selling, transferring, or dissipating any financial assets – including real estate at 1400 N. 200E in LaGrange, Ind., a 2003 Oldsmobile Silhouette, a 2003 Ford Taurus, bank accounts, pensions or retirement accounts. The objective in freezing the assets until the underlying lawsuit is resolved is to ensure some funds are available later to reimburse the public treasury. A hearing on the motion for preliminary injunction is scheduled for 11 a.m. Friday in LaGrange Superior Court 1 before Senior Judge Walter Palmer.

The Attorney General’s lawsuit also names Auto-Owners Insurance Company of Indianapolis as a defendant. The county clerk was covered by a $60,000 surety bond, and the lawsuit seeks to redeem the bond to reimburse the amount owed, similar to filing a claim on an insurance policy.

While the Attorney General’s Office has legal jurisdiction to file civil suits to recover public funds, county prosecutors have legal jurisdiction to decide whether to file criminal charges in such instances.

Over the past two and a half years Zoeller has filed numerous lawsuits against current and former government employees and elected officials to recover misappropriated public funds. Zoeller also advocated for passage of House Enrolled Act 1514-2009, a state law that allows the Attorney General’s Office to intervene earlier if the SBoA examiners suspect misappropriation, and to require local officials to carry at least $30,000 in bond coverage so that funds are readily available to reimburse taxpayers in case of theft or loss.

“If the State Board of Accounts determines that money must be repaid to a government office, then my office will act diligently to obtain a judgment, collect on the amount and restore the public trust,” Zoeller said.

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