NEW ALBANY, Ind. (Legal Newsline) - Indiana Attorney General Greg Zoeller filed a lawsuit on Thursday against a former county highway superintendent and a surety company to recover more than $17,000 in public funds.
Ronald Quakenbush, who recently retired as the Floyd County Highway Department superintendent, and the Western Surety Company were named as defendants. Western Surety allegedly wrote a $15,000 surety bond, a type of insurance policy covering county government employees. The lawsuit seeks $17,745.34, in addition to treble damages, costs and attorney fees.
Zoeller filed the civil lawsuit in Floyd County to recover the amount from the defendants named in a State Board of Accounts audit issued Dec. 5.
"The State Board of Accounts examiners determined that this was not merely a case of bad bookkeeping," Zoeller said. "It is my responsibility to the public to recover these public funds. When those entrusted with responsibility over taxpayers' money violate that trust, then the attorney general's office is authorized to take legal action to reimburse the public treasury."
Between Jan. 1, 2006-Aug. 31, 2011, Quakenbush allegedly misappropriated funds in multiple instances that must be repaid. Quakenbush oversaw the county highway department and its removal and disposal of guard rails, old culverts and other salvageable items.
Drivers with the highway department brought metal to multiple recycling companies that paid for the scrap and then the cash and receipts were to be turned over to Quakenbush to be remitted to the county auditor, Zoeller says. The SBoA audit says Quakenbush failed to remit $12,526.67 in cash payments from the recyclers. Quakenbush allegedly stored $1,492 in a locked highway office drawer and used it for miscellaneous purchases for the department, such as snacks and equipment, bypassing normal appropriation procedures.
The audit says some payments from recyclers were deposited into a bank account Quakenbush opened in 2006. Over the course of four-and-a-half years, 24 withdrawals were made from that account.
The remaining amount of allegedly unremitted payments, $11,034.67, must still be reimbursed, Zoeller says. As superintendent, Quakenbush is legally responsible for paying the unremitted payments, he added. In addition, the SBoA incurred $4,846.88 in costs conducting the audit, for which the lawsuit seeks repayment.
Western Surety allegedly had a continuous $15,000 surety bond over county employees acting as an insurance policy against misconduct or theft. By naming the bonding company in the lawsuit, the state seeks to redeem the bond to reimburse the county for part of the owed amount. Any portion that is not covered by the bond would be the personal responsibility of Quakenbush.