3 Family Members, Former Employees Allegedly Stole Thousands from Maud City Funds

News9.com

OKLAHOMA CITY – A special auditor's investigation found a trio of family members working for Maud, Oklahoma, may have stolen thousands of dollars of city funds.

"Maud had three employees, a mother, a son, and a daughter-in-law, running amok, writing themselves checks, and destroying public records," said State Auditor Steve Burrage. "When you look at what was going on for several years, you have to ask yourself who was minding the store. No oversight. There was absolutely no oversight of the city clerk or deputy city clerk and no reconciliation by bank records by someone other than the person who made deposits and wrote checks."

The three officials are identified as the deputy city clerk Natalie Meadows, her daughter-in-law Heather Bowers-Horton, and Meadows' son, Justin Horton. Meadows had worked for the city for 22 years. Bowers was employed in April 2007 as city clerk-treasurer and married Horton in August 2008, who was employed by the Maud Municipal Authority in April 2009.

"The search for records in this case was complicated by a reported theft of a utility billing computer, court docket records and various receipt books," Burrage said. "Our auditors were able to reconstruct some of the activities from available bank records. Overall, it looks like as much as $2,500 a month was disappearing from cash accounts. Meanwhile, the three in question were writing payroll advances without authorization and without the knowledge of the governing boards. We recently learned that the computer had been found in a nearby lake."

The audit report includes information including payroll check advances to Meadows, Bowers-Horton, and Horton from April 2007 to November 2009. Police said Horton told investigators he would come though the back door of the city hall while his mother and wife were away at lunch or running errands, write himself advances. He would then use a rubber stamp to approve the expenditures. Police said Bowers-Horton stated she wrote payroll advances for all three.

The report also includes payments to vendors without supporting documentation, blank purchase orders that had been executed, payment records that did not match purchase orders and evidence of the city's funds and the authority's funds being intermingled, resulting payments being made from inappropriate accounts at times.

"The 40-page report details instances of Meadows using court fund payments to cover mysterious shortages in utility fund payments," Burrage said. "It looks like sales tax money was inappropriately deposited into a trust account and Bowers-Horton failed to transfer the funds to two city accounts. Gambling at areas casinos appears to have played a roll, as well. Maud officials have a real mess on their hands because of a lack of internal controls and no segregation of duties.

"I've been holding meetings across the state over the last two years with governmental entities and individuals serving on their boards," Burrage continued. "I've been stressing the importance of internal controls and segregating certain functions in the management of funds. As a result, I do believe boards and citizens are starting to ask more questions and demand answers. That is what has led us, and prosecutors, to cases like this one and will continue to help us identify and detect fraud early on to prevent these devastating losses you continue to read about."

The special audit was requested by Pottawatomie County District Attorney Richard Smotherman. A copy of the audit report has been provided to Smotherman's office for its consideration.

Smotherman said investigators are gathering more evidence and will be filing formal charges soon.

Read the full report.

"I wish they'd had taken a different route when they got into problems. They were means with other people that would have helped them instead of taking funds from the city, from the people," said Maud Mayor Bobby Watson.

The mayor said this situation put the city in a big financial hole, but they're catching up fast. Since the three employees resigned in November of 2009, revenue from utility payments alone has increased by an average of $2,000 a month.