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The Minneapolis-St. Paul Star-Tribune online for January 7, 2011, is running an article authored by James Walsh and headlined Former Revenue Department auditor charged with stealing nearly $2 million.
The article explains how a former auditor for the Minnesota Department of Revenue embezzled state money by creating fictional tax refunds and depositing them in various bank accounts. The former auditor, her sister, and her niece are being charged by federal authorities with conspiracy to commit mail fraud and money laundering. The state investigation is ongoing and could result in additional state criminal charges.
Minnesota’s Governor Mark Dayton said, “I am requesting the legislative auditor undertake a detailed examination of the department’s internal controls to ensure that this kind of criminal fraud against the state of Minnesota cannot be committed again. I am mindful of the warnings the legislative auditor has issued previously that the management of certain state agencies lacks the necessary oversight and controls to prevent the misuse of public money.” Apparently the Governor and others had been warned but chose not to listen.
The press release from the Office of the US Attorney for the District of Minnesota notes that the scheme ran from January 2005 through September 2010. It was investigated by the Minnesota Department of Revenue, the Minnesota Bureau of Criminal Apprehension, and the Internal Revenue Service-Criminal Investigation Division. It is, of course, being prosecuted by the US Attorney for Minnesota.
Thanks Bill, but this can’t happen in IDAHO :>)
Comment by Ancientemplar — January 8, 2011 @ 9:40 am
Ancientemplar,
Usually when subordinates embezzle/steal/accept bribes or gratuities/etc., people tend not to look upward. Remember, every subordinate has a supervisor, and one of the supervisor’s responsibilities is making sure that subordinates neither fortuitously find or intentionally create the conditions that can lead to improper or illegal conduct. In the Minnesota case, look at how long this went on — five years! How does a properly supervised subordinate get away with embezzlement for five years?
She was an auditor, but someone audits the auditors (if they don’t, then there is another problem). In five years, did not one auditor (either a management auditor or a financial auditor) check these accounts? Or if someone did raise a flag, if someone did request a detailed or forensic audit, was that person’s request pooh-poohed?
The point is that when an ongoing, longstanding crime like this is uncovered, a collateral investigation needs to look at the accused’s supervisor(s) to see if they were complicit or negligent or dumber than a box of sawdust.
Comment by Bill — January 8, 2011 @ 10:57 am
“How does a properly supervised subordinate get away with embezzlement for five years?”
A good question. I wonder what Dan formerly of the County would say about that?
Comment by Pariah — January 8, 2011 @ 12:01 pm
Pariah,
Oh, I think it would closely parallel his court testimony, something like, “My staff handles that.” And that’s why he is now Dan Formerly of the County.
Comment by Bill — January 8, 2011 @ 4:14 pm
Isn’t it alleged, Bill, that the embezzlement in Dan English’s office was going on for at least 10 years?
Comment by mary — January 8, 2011 @ 5:08 pm
Yep.
Comment by Ancientemplar — January 8, 2011 @ 5:16 pm
Could the resignation and allegations concerning the Idaho State Tax Commissioner be connected to the local embezzlement allegations within the KC’s clerk’s office? It has been reported that Martinson worked closely with the state tax commission.
Comment by Stebbijo — January 8, 2011 @ 5:35 pm
I hope someone is delving into the whole network. Get the city in there too and take a close look.
Comment by mary — January 8, 2011 @ 6:18 pm
Mary,
That is what the former Commissioners Piazza and Currie and present Commissioner Tondee along with former Kootenai County Clerk Dan English alleged at a very premature press conference last Tuesday. To my knowledge, Sandy Martinson has not been indicted, charged, or arrested for any crime including embezzlement.
Stebbijo,
That is a good question. From what has been alleged so far, one of the tax Commissioners was playing favorites on decisions with political friends of his and the Governor’s. To my knowledge, though, the embezzlement alleged up here was not connected with the allegations there.
Mary (again),
So do I. Hopefully, though, we won’t know if it is until the subpoenas are served and indictments handed down.
Comment by Bill — January 8, 2011 @ 7:01 pm