'Financial crimes' investigation results in federal charges filed against former Center Grove employee

News

File image

Data pix.

JOHNSON COUNTY, Ind. -- A former employee of Center Grove Community School Corporation is facing federal charges including wire fraud and identity theft.

CBS4 reported in May 2019 that an investigation of "financial crimes" was underway at the school corporation.

According to documents filed by U.S. prosecutors, Emily Holmes, was a payroll specialist for Center Grove.

Holmes is accused of inputting false hours into accounts of 35 different part-time and substitute employees of the school corporation.

After hours were paid, Holmes allegedly put the money in an account that she controlled.

Data pix.

The documents also show that she intercepted W2 forms so the employees would not find out about the transactions.

According to prosecutors, the 35 victim employees filed tax returns that did not match IRS records, which resulted in tax deficient notices being sent.

The U.S. government said, on or around June of 2017, Holmes generated 13 checks and 92 wire transfers that totaled a loss of $352,588.89 to Center Grove School Corporation.

Holmes is also accused of tax evasion for $30,441 of unreported income as part of the scheme.

Prosecutors said none of the employees were aware of Holmes' actions.

Documents show that Holmes plans to plead guilty to the charges.

Center Grove School Corporation Superintendent Richard Arkanoff sent the following letter to parents and faculty members:

Center Grove Families,

As we shared with you in early May, a terminated employee of Center Grove Schools was the subject of a fraud investigation. Now that the investigation has concluded, we can share additional information with you.

The person was employed in payroll in our district’s Business Office. As soon as our Business Office was made aware of improper practices, the Center Grove Police Department and the Johnson County Sheriff’s Department were contacted. The person was terminated and an extensive investigation began.

The US Attorney has now filed charges against the terminated employee. We can assure you that this fraud did not involve student information. The investigation determined the terminated employee used her knowledge and system credentials to make fraudulent payroll payments directed to her own accounts. They determined the fraudulent payroll payments were made using the names of 35 former employees, mostly part-time or substitutes, over the last four years and amounted to just over $350,000. The investigation revealed these people were not owed, nor did they receive these wages. However, some of the wages were reported to the Internal Revenue Service through Center Grove’s payroll system. The terminated employee is facing federal charges of wire fraud, aggravated identity theft, and tax evasion.

Center Grove has been working with an outside accounting firm for the last eight months to make right any issues created by this fraud for the former employees who were victims. That includes correcting IRS reports and any other related concerns.

As a public school corporation, we work very hard to be good stewards of the taxpayers’ hard-earned money. We have begun the process of recovering funds and will continue to do whatever we can to recover the funds taken from our accounts. We have contracted an independent review of our processes and put in place additional controls in our systems to ensure that an incident like this does not happen again.

We would like to thank the Johnson County Sheriff’s Department, the State Board of Accounts, the FBI, and the IRS for their work investigating this case and bringing the terminated employee to justice.

Sincerely,
Richard A. Arkanoff, Ed.D.
Superintendent

Most Popular

Latest News

More News