Federal and state law enforcement officials searched the Madison residence of former Switzerland County treasurer Ann Geyman last Thursday, and although officials are mum on what they found – if anything, documents submitted to the United States District Court to obtain the search warrant show that investigators believe that more than $1 million was taken over a five year period.
In the document, officials state that Ann Geyman, during a period beginning on February 11th, 2003, through April 16th, 2007, wrote a total of 190 checks that totaled $1,054,289.15.
The document, “Application and Affidavit for Search Warrant”, was filed on June 5th in United States District Court, Southern District of Indiana, in the court of U.S. Magistrate Judge Tim A. Baker. The documents were prepared by Charles L. Cohen, Special Deputy with the U.S. Marshal’s office; and spells out the case against Ann Geyman as evidence of needing the search warrant to possibly obtain more evidence. Because the school corporation receives more than $10,000 per year in federal money through the U.S. Department of Education; and because Ann Geyman is believed to have used the U.S. Postal Service to mail the fraudulent checks, and because there are issues concerning the funds that involve the Internal Revenue Service, the case now has federal implications.
Vevay Newspapers obtained the document from the Switzerland County School Corporation under the federal “Freedom of Information Act” and Indiana’s “Open Door Law”.
The document asked permission to search the home and out buildings at the home of Raymond and Ann Geyman, which is located at 1829 E. Telegraph Road in Madison. In the document, which covers more than 40 pages including photographs, law enforcement officials laid out the evidence that they have already gathered:
SCHEME
In a section of the document titled “Scheme”, law enforcement officials said that an audit by the Indiana State Board of Accounts found that Ann Geyman had written 190 checks over a period of more than four years to various credit card companies. Auditors found credit card numbers on the faces of the checks that were not accounts of the Switzerland County School Corporation.
The report summarized the illegal activity:
– From January 20th, 2003 to June 30th, 2003, auditors found 33 checks that totaled $144,607,21.
– From July 1st, 2003 to June 30th, 2004, auditors found 51 checks that totaled $269,702.64.
– From July 1st, 2004 to June 30th, 2005, auditors found 40 checks that totaled $240,534.26.
– From July 1st, 2005 to June 30th, 2006, auditors found 40 checks that totaled $230,666.24.
– From July 1st, 2006 to May 9th, 2007, auditors found 26 checks that totaled $168,778.80.
Ann Geyman was employed by the Switzerland County School Corporation on January 20th, 2003. Auditors found that the first check that was fraudulently written was dated February 11th, 2003 – just 22 days after starting her job – to Capital One in the amount of $2,195.
According to the document, on May 9th of this year, Switzerland County School Superintendent Tracy Caddell, Assistant Superintendent Darin Gullion, and School Attorney Ron Hocker met with Ann Geyman regarding three checks. The payee’s name on all three checks was believed to have been altered.
This finding came in part through an audit being conducted by the Indiana State Board of Accounts, with Richard N. Ahlrich being the Auditor in Charge.
“Caddell told Ahlrich that Ann Geyman acknowledged to the School Corporation officials that she paid personal bills with the checks that were shown to her,” the document states on page 13. “Caddell said Geyman told them that a family member had a ‘gambling problem’ and that she (Ann Geyman) had a ‘spending problem’.”
The document says that the superintendent then asked if the amount that she had taken exceeded the amount of her bond, which is $100,000. It says that Ann Geyman first indicated that the amount would not exceed the bond, but later said that she did not know, and that the money may have exceeded $100,000.
Public and private entities carry insurance bonds on employees who routinely handle money as a means of protection against theft or misappropriation of funds.
Tracy Caddell said that he has heard that there are rumors in the community that the school’s bond on the treasurer used to be $1 million, but that he has researched back to the early 1990s and that the bond here has always been $100,000.
“In fact, in speaking with other school corporations, our bond is higher than most schools in the area,” Tracy Caddell said.
The insurance bond is issued each year, so one issue according to school officials will be whether or not the school can make a claim for each year dating back to 2003. If that is the case, then $500,000 will be able to be reclaimed in a short period of time while any court proceedings are held in civil or criminal court.
In the meeting of May 9th, the document says that when Tracy Caddell asked Ann Geyman when she started taking money from the school corporation, she told him that she began in 2005.
DISCOVERY
The document says that in early May of 2007, the criminal activity was uncovered by Richard Ahlrich when he identified four payroll entries dated June 23rd, 2006, totaling $96,830.65 in the federal Title I Fund.
“These entries were not supported by a payroll distribution report that identifies employees being paid,” the report states. “The School Corporation’s computer system did not identify what use made the entries.”
When Richard Ahlrich asked Ann Geyman about the entries, she falsely told him that the entries were made to reimburse the General Fund for Title 1 salaries paid from the General Fund.
“Because there were no receipt entries in the General Fund according to an analysis of the accounting ledger, the ledger cash balance was falsely failed to identify the embezzled funds,” the document states. “This also meant that the bank reconcilement on June 30th, 2006 prepared by Ann Geyman and presented for audit was not accurate.”
The report goes on to say that Richard Ahlrich identified two payroll entries from June of 2006 in the General Fund and Transportation Fund that appeared to be duplicate payments. Because assistant treasurer Melissa May prepared the payroll, Richard Ahlrich questioned her about the entries. She stated after checking her work that she did not make an error and that she did not make the two payroll entries on the accounting ledger.
“In or about the time that Ahlrich questioned the Deputy Treasurer regarding the payroll entries to the General Fund and Transportation Fund, he also reviewed the June 2006 duplicate copy of the payroll checks that the School Corporation maintains,” the report continued. “Ahlrich noticed Check Number 020830 to ‘Med Ben’ dated June 23, 2006 in the amount of $12,107.37 located in a pouch of the binder in which payroll checks are maintained. The check to ‘Med Ben’ appeared to be a proper check since this company is a normal vendor used by the School Corporation and there was nothing unusual about the backside or endorsement side of check. The bank markings showed the check cleared in June 2006.”
But when Richard Ahlrich traced the check to the bank statement of June, 2006, the check was not listed on the bank statement.
Richard Ahlrich then brought that question to the attention of Ann Geyman, who told him that she would look into what happened. She then brought back another bank statement that she told the auditor she got from the bank, and that statement had the check in question on it.
“Ann Geyman stated that the bank said it was a computer glitch caused when MainSource Bank took over the predecessor bank, People’s Trust Company,” the document says.
The affidavit then says that Melissa Meyer reported to Richard Ahlrich that she had traced the entries on the June payroll report to the checks that had cleared the bank, and that she had not found any problems.
Melissa May then said that she took a further step and added up the checks listed on the bank statement and found that the detail listing of the checks was $23,737.16 less than the total amount that the bank showed had cleared the bank.
Taking into account the “missing” check total of $12,107.37 – that would lower the discrepancy to $11,634.79; but before she told Richard Ahlrich about the difference, the report says that Melissa May told Ann Geyman.
The document says that at the time she was notified by Melissa May, Ann Geyman was at her home in Madison getting ready to attend a statewide school meeting in Fort Wayne. When asked, Ann Geyman then Faxed copies of the checks to the school corporation office, but assistant superintendent Darin Gullion could not read the FAX copies because of the size of the copies and that there was no back side of the checks.
Believing that the FAX machine had reduced the size of the check copies. Darin Gullion then asked Melissa May to have Ann Geyman send the check copies to the School Corporation office by overnight mail. On May 8th, 2007, the School Corporation received from Ann Geyman copies of two checks:
– Check Number 18940, payable to Aflac in the amount of $2,012.87, with the date not being legible.
– Check Number 18941, with neither the amount or the date not being legible.
Seeing that the mailed checks were exactly the same at the Faxed copies he got the day before, Darin Gullion showed the copies to Richard Ahlrich on May 9th, who also could not read the information.
Richard Ahlrich then told Darin Gullion to get copies of the checks directly from the bank, so he sent assistant Cindy Haskell to the bank on May 9th to get copies of the two checks in question. When she returned, investigators found the following information:
– Check Number 18940 with a date of June 13th, 2006, payable to American Express in the amount of $2,012.87.
– Check Number 18941 with a date of June 14th, 2006, payable to Citibank, in the amount of $9,621.92.
As Darin Gullion, Tracy Caddell, and Ron Hocker began to investigate the matter, the checks were shown to Richard Ahlrich. Because the checks were also hand written and made payable to credit card companies, MainSource Bank also began an investigation, according to the document.
MainSource Bank employees then identified several more checks that were similar to the first two.
ADMISSION
The document states that Tracy Caddell told Richard Ahlrich that on May 10th, 2007, Ann Geyman made an admission to him, Darin Gullion, and Ron Hocker that she had used school corporation funds for personal gain, but that she did not state any specific dollar amount.
On May 11th, Indiana State Board of Accounts Field Supervisor Ron Robertson scheduled a meeting with Ann Geyman to talk about the embezzled funds.
“Ann Geyman agreed to meet with representatives of the Indiana State Board of Accounts on May 14, 2007,” the affidavit continues. “During the morning of May 14, 2007, School Corporation officials advised the State Board of Accounts that Ann Geyman was in King’s Daughters’ Hospital in Madison, Indiana due to a drug overdose. Later than day, Ann Geyman called school corporation officials and requested that a meeting be rescheduled with the State Board of Accounts. Ann Geyman did not show up at that meeting.”
FINDINGS
The affidavit says that Ann Geyman devised a scheme that allowed her to conceal the checks that she wrote to credit card companies from school officials.
– Credit Card Payments Not Posted to Accounting Records: “The checks written to the credit card companies were not posted to the School Corporation’s accounting ledger and as a result would not be reported on Expenditure Reports that are subject to the review of the Superintendent of Schools,” the document states. “In addition, these disbursements were not submitted to the School Board for approval as required by Indiana statute.”
- Vendor Bank Account – Use of Out of Sequence Check Series: “The State Board of Account determined there were thirty-two (32) instances in which Ann Geyman used an old series of checks that the School Corporation discontinued using after the School Corporation switched to a laser printer,” the report states. “That checks were processed through the School Corporation’s vendor bank account. Melissa May was responsible for preparing the checks processed through the vendor bank account and tracked the checks she (Melissa May) used.
“However, Melissa May did not perform the bank reconcilements and would not see the out of sequence check series processed through the vendor bank account and she was unaware of these checks because they were not posted to the accounting records.”
– Payroll Bank Account – Not Making Required Bank Transfers: “…Approximately 80% of the theft occurred through the payroll bank account,” the report continued. “It was the School Corporation’s practice to transfer gross payroll from the vendor bank account to the payroll bank account. Net payroll checks and certain payroll withholding checks would be paid from the payroll bank account….Because the gross payroll had been remitted to the payroll account, Ann Geyman was supposed to transfer the federal tax withholding amount back to the vendor account. Because she did not always transfer the money back, this left extra funds in the payroll account that allowed her to write checks to credit card companies. These checks would be undetected by (Melissa) May because she only processed the net payroll checks and because Ann Geyman was responsible for performing the bank reconcilement.”
– Unidentified Adjustments to Expenditure Accounts: “Because the checks written for credit card payments would reduce the bank cash balance, it was necessary to reduce the ledger cash balance,” the report says. “It is the audit opinion of the Indiana State Board of Accounts that the unsupported adjustments to expenditures were one of the primary methods Ann Geyman used to conceal the un-posted credit card payments.”
– Altered Bank Statements: “The second primary method used by Ann Geyman to conceal the un-posted credit card payments was by altering the bank statements presented to the auditors during the audit,” the affidavit says. “State Board of Accounts compared bank statements on file at the school corporation with bank statements that were obtained directly from the bank for the period of July of 2005 through June of 2006. For ten months out of twelve months, the bank statements were altered to delete the checks written for credit card payments from the detail check listings on the bank statement. In addition, the optical images of the credit card payments were removed from the school corporation’s bank statement.”
– Altered Optical Images: “State Board of Accounts identified six (6) instances of the optical images of checks that were altered in addition to the three (3) checks that resulted in the discovery of the theft,” the report says.
– False Bank Reconcilements: “The Superintendent of Schools required the Treasurer to submit monthly reconcilements of the record balance of cash shown on the Fund Report to the bank balance,” the affidavit says. “There were several months that the bank balances reported on the bank reconcilement prepared by the Treasurer were between $28,660.22 and $225,516.30 in excess of the actual bank balances.”
IN PERCENTAGES
Although $1 million is a huge amount of money, when the state looked at the missing money in terms of the total funds in the General Fund of the school corporation, the money was 1.54-percent of the total expenditures of the corporation during that time.
From the 2002-2003 school year through the 2005-2006 school year, the total expenditures of the school corporation were $57,478,575; while the amount of theft was $885,510.35. This does not take into account the funds that are missing from July 1st of last year through Ann Geyman’s last day of employment.