A Madison County grand jury indicted former Innovate Mississippi CFO Tonya Klauser for three counts of embezzlement and false pretenses in September. The indictment states alleges Klauser used her American Express card from 2011 to 2013 to defraud Innovate Mississippi and also submitted 141 fraudulent expense reports for reimbursement. The indictment is posted below.
Klauser pleaded guilty to a similar charge in U.S. District Court but received a hand massage for her penalty. JJ reported in October 2015:
Former Innovate Mississippi CFO Tonya Klauser pleaded guilty to one count of embezzlement in U.S. District Court on October 21, 2014. The bill of information states she embezzled $395,484 from Innovate Mississippi. The embezzlement occured from 2010 to 2013. Judge Tom Lee sentenced her on September 3, 2015:
30 days incarceration; 2 months halfway house; 3 years supervised release, with 6 months being home confinement; $598,143.38 restitution; $100 special assessment. Signed by District Judge Tom S. Lee on 9/10/2015 (ND) Earlier post
Judge Tom Lee ordered her to pay restitution of over $498,000. However, the losses may have been more than what was stated in the federal court files. Innovate Mississippi sued its former accounting firm for allegedly failing to detect the fraud. The complaint states:
For each year it prepared audits for Innovate, CRI issued "clean" audit reports in every material aspect. At no time during its tenure did CRI ever raise a concern of any significance involving Innovate's management, internal contrnols, or financial practices. CRI repeatedly informed Innovate's board of directors that it uncovered no material deficiencies...
Innovate replaced CRI with BKD, LLP as its new auditor for the fiscal year ending on June 30, 2013.
Durins its initial assessment, BKD immediately discovered several issues of concern regarding Innovate's CFO, Tanya Klauser, and Innovate's internal controls.
BKD advised Innovate regarding its concerns and Innovate subsequently engaged BKD to conduct a full forensic investigation.
Through its forensic investigation, BDK discovered three types of unauthorized transactions perpetuated by Klauser:
1) unauthorized payments to Klauser's personal credit card.
2) unauthorized expense report charges
3) unauthorized charges to Innovate's credit card.
It was discovered that Klauser had embezzled more than $500,000 from Innovate during her employment. The exact amount of Klauser's embezzlement has not been finally commputed but is believed to be approximately $1.0 million....
Indeed, BKD discovered Klauser's fraudulent activity in a matter of days whereas CRI gave no hint during its long engagement (six years) that either fraud was occurring.... Earlier post
The two parties apparently settled the case because it was dismissed with prejudice on October 10.
Kingfish note: Mr. Guest probably wouldn't have to prosecute this case if the U.S. Attorney had bothered to do his job.