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Monday, October 14, 2019

Ind. AG sues trustee

By Bryan Cohen | Sep 9, 2011


KOKOMO, Ind. (Legal Newsline) - Indiana Attorney General Greg Zoeller announced a civil lawsuit on Thursday against a former Harrison Township trustee in Howard County, Ind., to recover public funds.

Zoeller is requesting that John Harbaugh, Jr., repay more than $16,000 in public funds that are allegedly the ex-trustee's personal obligation and should not have been charged to taxpayers. As a township trustee, Harbaugh was legally responsible for the finances of the trustee's office. His term expired on December 31

"The trustee's office's funds are for emergency poor relief, but instead they were paid to satisfy tax penalties and interest because of the former trustee's negligence," Zoeller said. "These penalties are the personal obligation of the responsible officials even after they leave office; and we are asking the court to require this individual to repay what he owes to reimburse the public treasury."

Zoeller alleges that between January 1, 2008 and December 31, 2009, the trustee's office paid thousands of dollars in penalties, interest and fees to the Internal Revenue Service and Indiana Department of Revenue to cover unpaid tax obligations. The amount of fees, penalties and interest paid to the two taxing entities that could be fully documented was $7,821.90. Harbaugh paid another $8,549.77 to the IRS and Department of Revenue for which there is not adequate documentation.

The State Board of Accounts found that Harbaugh should repay a total of $16,371.67 for the misfeasance. A certified audit report issued by the SBoA on July 15 authorized Zoeller's office to act as the state's collection agent and to seek to recover public funds. Zoeller's office sent a letter demanding repayment within 30 days to Harbaugh last month. After a response determined payment was not forthcoming, Zoeller filed suit on Thursday, seeking $16,371.67, plus triple damages, prejudgment interest and attorney's fees from Harbaugh.

If the court later enters a civil judgment against a defendant for an amount sought by the state, Zoeller can start a collections action against the ex-official to recover the money owed to taxpayers. The state can garnish pensions and wages, attach liens, seize property and take other legal actions a creditor can take against a debtor to collect on a debt.

Zoeller's office has been in contact with an insurance company that had a $15,000 surety bond on Harbaugh during his term of office as a trustee. These types of bonds can act as an insurance policy to reimburse the public in case of a misfeasance or misappropriation by a public official. The insurance company has not been named as a defendant in the lawsuit at this time while discussions with the state are ongoing. If any bond money is received from the insurance company, the state would seek the difference from the defendant.

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