Wednesday, September 11, 2013
According to an article in our news partner The Seattle Times today, the former office manager of the Lake Forest Park Water District pleaded guilty today to changes of wire fraud for embezzling more than $350,000 from the small water district, using a variety of schemes over a period of seven years.
The water district serves about 900 customers in Lake Forest Park from its artesian well, with an annual budget of about $600,000.
According to the federal indictment, Jackee Bormann-Zweekhorst used a variety of schemes between 2004 and 2011 to embezzle the money. She used the water-district credit card for personal expenses, including college tuition for her child, hot-tub parts and service, boating and automotive equipment, and fishing gear.
She also falsified time cards, billing the water district for more than $100,000 in wages for work she said was done by her three children.
In addition, she put in for about $70,000 in reimbursement for things she either did not buy, or bought for personal use.
As a trusted employee, board members routinely signed off on her expense statements. They were hampered by a complex and archaic accounting system which made it difficult to balance and verify statements.
After the thefts were discovered, a team of forensic accountants worked for six months to correct the books and set up accounting systems that a layperson could use. Due to illness, death, and retirement, the Board of Commissions is new, and one member has been designed as Treasurer, with the responsibility to verify staff accounting.
Bormann-Zweekhorst will be sentenced Dec. 13. Wire fraud is punishable by up to 20 years in prison and a $250,000 fine.