Former Kennard Clerk Indicted
Posted April 7, 2016
A federal grand jury in Indianapolis has indicted the town of Kennard's former clerk-treasurer on three counts of wire fraud related to more than $80,000 she overpaid herself the three years she was in office.
The indictment against Karen Stanley was handed down and filed with the U.S. District Court for the Southern District of Indiana late Tuesday afternoon. That was the same day the Indiana State Board of Accounts released a special investigation report revealing that agency wants to hold Stanley accountable for more than $100,000 related to malfeasance while in office.
According to the indictment, Stanley “devised, intended to devise, and participated in a scheme to defraud Kennard, and to obtain money and property from Kennard by means of materially false and fraudulent pretenses, representations, and promises, and by concealment of material facts. ...”
The indictment alleges Stanley “falsely presented in Kennard's payroll system that she was entitled to a salary in the amount of $33,000 per year,” double her $16,500 annual salary. The document says Stanley “presented falsified expense reports that included the unauthorized payroll amounts” to the Kennard Town Council at that body's monthly meetings.
As a result, Stanley is alleged to have received approximately $80,160 in unauthorized payments from when she was appointed clerk-treasurer in August 2012 until her resignation late last October. The indictment goes on to say that at least 58 paychecks containing unauthorized payments, drawn on the town's bank account at the Star Financial Bank in Shirley, were deposited in a personal checking account Stanley maintained at Huntington Bank in Columbus, Ohio.
The indictment charges Stanley with three counts of wire fraud for three specific instances where town funds were transferred from the town's bank account to hers: a $1,192.37 deposit in December 2012; a $1,169.87 deposit in May 2013; and a $2,227.74 deposit in August 2013. It is not clear from any of the court documents why there were no counts in the indictment for the more than four dozen other overpayments.
According to the indictment, the government intends to pursue forfeiture of any property “derived from proceeds traceable” to the unauthorized overpayments. If such property is not able to be located, the government could seek forfeiture of other “substitute property,” as permitted by federal statute.
A copy of the indictment and other documents filed in the case were to be served personally on Stanley, along with a summons requiring her to appear for an initial hearing. When contacted this afternoon, district court staff could not confirm whether these items had been served yet and would not reveal the date and time of Stanley's initial hearing. That information is expected to be released in coming days.
This case is tentatively set for a jury trial on June 27, although that date is likely to change. A copy of Stanley's indictment is available for viewing on The Banner's website, www.thebanneronline.com.
The Banner first reported on this matter in October 2015 and detailed how the newspaper's reporting and an alert citizen discovered the situation. A front page story in the April 6 issue of The Banner detailed the information of the State Board of Accounts investigation.
A copy of the indictment is available here.