Former City of Seymour Deputy Treasurer And Bookkeeper Facing Criminal Charges She Embezzled Taxpayer Funds Will Forgo Her Right To Trial

Attorney General J.B. Van Hollen Said the State Will Seek a Sentence of Eight Years Imprisonment, Five Years Extended Supervision, Over Theft of Nearly $600,000 in Public Funds

MADISON - Attorney General J.B. Van Hollen's office is seeking the imprisonment of a former City of Seymour deputy treasurer and bookkeeper who embezzled hundreds of thousands of taxpayer dollars over five years. Pursuant to a plea agreement, Carolyn Austin, 46, entered no contest pleas this morning in Outagamie County Circuit Court to five counts of felony theft and one count of misconduct in public office. The Wisconsin Department of Justice (DOJ) - Division of Criminal Investigation (DCI) has calculated the total value of these thefts from January 2000 to January 2005 to be nearly $600,000.

"In this case, taxpayer money was stolen by a public official," Van Hollen said. "The people have a right to expect their hard-earned tax dollars will be used lawfully for the public good, not to line a public official's personal account. DOJ works with law enforcement to vigorously enforce laws designed to prevent this type of unconscionable government corruption."

State law makes it unlawful for a public employee to intentionally make a materially false entry in an account, record book or report. The state's complaint alleged Austin executed a "deceptive scheme, and by virtue of her employment with the City of Seymour, having access to funds belonging [to the city and the public,] intentionally obtained and converted [these funds] for her own use, with knowledge her actions were contrary to her authority and without the consent of the city."

According to the Department of Justice criminal complaint:

• An audit for 2004 by Seymour's accounting firm revealed discrepancies in the city's payroll records and bank statements. Further review of documents indicated that city funds had been diverted with each payroll during 2003 and 2004.
• DCI agents obtained bank records and city payroll records going back to January 2000. An analysis of these records enabled agents to follow the scheme Austin conjured up to divert city funds and cover her tracks.
• As deputy treasurer and bookkeeper, Austin was responsible for preparing the city's payroll. Every two weeks, Austin prepared a record listing direct deposits the city would make for employees who selected that form of payment. Austin also prepared separate direct deposit checks issued to four local banks where these employees had accounts. DCI learned that with each payroll, Austin included four additional employees on this list who actually received a payroll check. Austin added an additional amount to each of the four direct deposit checks that matched these employees' payroll checks. Austin then prepared deposit slips that diverted these additional amounts into an account she owned at each bank.
• To cover up her thefts, Austin created false journal entries in the city's computerized payroll system. These falsified entries hid the duplicate payroll payments in many city expense accounts, making detection difficult.

City officials confronted Austin about the accounting discrepancies and placed her on administrative leave. She resigned days later.

The Honorable Harold V. Froehlich, an Outagamie County Circuit Court Judge, presided over today's hearing and accepted Austin's no contest plea. By pleading no contest, Austin acknowledges the State could prove beyond a reasonable doubt that she committed felony theft and felony misconduct in public office. Judge Froehlich scheduled a sentencing hearing to take place on August 20, 2007, and ordered a pre-sentence investigation in advance of the hearing.

According to the plea agreement, the State will ask the Court to sentence Austin to 13 years, including eight years in prison followed by five years of extended supervision. The State will also request an additional seven years of probation following completion of the 13-year sentence.

The plea agreement also authorizes the State to seek full restitution and to ask the Court to bar Austin from accounting or bookkeeping type employment where she has access to employer or client bank accounts, funds or payroll.

Assistant Attorney General Paul Barnett represents the State.