HAZARD—The case of the missing more than half a million dollars from the tax rolls of the Perry County Sheriff’s Office has been settled—but for much less than the originally alleged stolen amount.
The case was first brought before the grand jury in October 2012, resulting in the indictment of 66-year-old Lana Dean, a former employee of the sheriff’s office who was accused of having stolen around $580,000 from the county’s franchise tax fund from 2002 to 2006. A state audit preformed in 2008 by then Auditor Crit Luallen detailed a laundering scheme which she called one of the largest in the history of the state auditor’s office.
On March 27, Dean accepted a settlement agreement from the Perry County Commonwealth’s Attorney’s office for $20,000. Commonwealth’s Attorney John Hansen said this amount was likely half of what his office could actually prove was even missing from the tax fund.
“We had a problem where I could not, based on the evidence that we had, based upon conversations with investigators, I did not feel that I could prove that the money was missing, that the money was stolen,” Hansen said.
Hansen said the only evidence that money was missing from the franchise tax fund was from the targeted sampling audit from the state auditor’s office.
“No one in the state auditor’s office ever went over these records with a fine toothed comb,” Hansen said. “It was not an in depth audit.”
Hansen added that the auditor who normally audits the sheriff’s office had found no evidence that money was missing to the extent that the state auditor’s office had.
“I believe that if we were able to prove anything that that amount would have been far less than $580,000, far less than that,” he said.
Hansen explained that there were other issues regarding the case and the evidence that would be needed if it went to trial. An insurance claim was not filed for more than three years after the money was found to be stolen, though officials knew of the missing money for that length of time, and Dean’s lifestyle did not fit that of a person who had been lining her pockets with over $500,000 in four years.
Also, Hansen said, there was no recorded affect of a loss in tax funds in the county.
“The franchise tax money is distributed to eight major entities. None of them ever reported a loss in what they received of the franchise tax money,” he said. “They all got just as much, if not more.”
Hansen said his office would only be able to prove that around $40,000 was missing from the fund for that period of time, however the exact cause of those missing funds would be difficult to pinpoint due to some unorthodox practices at the sheriff’s office.
“The biggest problem was actually that a couple of former sheriffs were actually allowing employees to cash checks, to cash personal checks, from the tax money,” Hansen said. “Who does this?”
Hansen said that current Sheriff Les Burgett has stopped this practice.
Hansen said based on all of these factors, he thought it wiser to settle the case instead trying it in court where the lack of evidence would speak for itself.
“With the witnesses and the credibility of ascertaining a specific amount of money that was missing, the source from which it was missing, it would be confusing at best,” Hansen said.
Amelia Holliday can be reached at 606-436-5771, or on Twitter @HazardHerald.