WINCHESTER, Ind. (Legal Newsline) - Indiana Attorney General Greg Zoeller filed a lawsuit on Wednesday against a former Randolph County school treasurer who allegedly billed more than $39,000 in fraudulent expenses and overpayments to taxpayers.
Sharon Lankford was named as the defendant in Zoeller's lawsuit. Lankford was the treasurer of the Union School Corporation in Modoc through June 2009. Zoeller is seeking to recover $39,213.39 in public funds and is requesting a temporary restraining order and preliminary injunction to freeze any assets Lankford might have until the resolution of the lawsuit.
"The State Board of Accounts audit provides the basis for a claim that this individual covered her tracks to conceal her malfeasance of public dollars," Zoeller said. "This case is yet another example of the need for better protection of taxpayer's money.
"Since January 2009 my office has filed 39 lawsuits such as this across the state to recover public funds and reimburse the public treasury. We are also asking the legislature to tighten state law so dual signatures are required of local officials in making expenditures of public funds so that such embezzlement would be more difficult to perpetrate in the future."
According to a certified audit by the State Board of Accounts of the Union School Corporation, between July 2006 and June 2009, Lankford allegedly engaged in multiple acts through which she unlawfully pocketed the money of taxpayers. Lankford allegedly wrote nine checks and made one debit card purchase on the school account for personal expenses in the amount of $19,753.16. The examiners compared the cancelled checks to the school's check records and found that the names of those paid had been fraudulently listed in the records, Zoeller says.
Lankford also allegedly purchased items using school funds in the amount of $2,832.32 that the school never received, including a copy of Quicken 2007 software and a table saw and blades. The school does not use Quicken and the school industrial technology teacher confirmed that no saw was ordered or received. Lankford allegedly signed off on all the claims despite the fact that making personal purchases using public funds is unlawful.
Additionally, Lankford allegedly received overpayments of her compensation totaling $7,941.79 and underpaid for her employee health benefits, reducing her withholding by $4,680.38 over four years. The total amount sought for this alleged violation was $12,622.17. In addition, Lankford was also excessively reimbursed by her healthcare spending account for more than she contributed for a total of $528.86.
The SBoA examiners incurred audit costs of $3,476.88 in reviewing the records, for which the state is seeking repayment from Lankford, bringing the total amount sought in the lawsuit to $39,213.39. The state can also seek treble damages.
Zoeller is seeking a civil judgment against Lankford. Zoeller can then pursue a monetary judgment through collections and could garnish wages, attach liens on property or take other actions a creditor could take against a debtor to collect on the debt.
Fidelity and Deposit Company of Maryland is also named in the lawsuit because it allegedly wrote a $50,000 surety bond on Lankford for two of the years she was treasurer as an insurance policy against official misconduct. Anything not covered by the bond would by the personal responsibility of Lankford.
In a separate audit case, Lankford is awaiting trial on criminal charges in Delaware County on three alleged counts of theft, stemming from her employment as a school treasurer with Yorktown Community Schools. Lankford has already reimbursed the $4,387.68 in allegedly misappropriated funds in the Yorktown case, so there is no collections action to pursue in civil court. Zoeller has the legal jurisdiction to bring civil suits to recover public funds, but criminal charges are solely the legal jurisdiction of the county prosecutor. Zoeller's office acts as the state's collection agent in SBoA certified audit cases