Over the course of a decade, a former Spokane County employee allegedly stole more than $1.38 million in taxpayer money using dozens of relatives and acquaintances to cash checks for falsified liability claims, according to county officials and state auditors.
The same woman, Rhonda S. Ackerman, 50, was recently accused in a civil lawsuit of stealing money from her mother, who has dementia, after assuming power of attorney over her bank and retirement accounts.
The thefts from the county occurred between January 2007 and December 2016, according to a report released Thursday by the state auditor’s office, which concluded that “internal controls at the county were not adequate to safeguard public resources.”
The amounts stolen each year ranged from $73,000 to nearly $178,000. Neither county nor state auditors found inappropriate payments in 2017 or 2018.
The findings have been forwarded to the Spokane Police Department. A police spokesman said detectives are investigating the matter. It’s unclear how many of the people involved could face criminal charges.
County officials held a news conference Thursday to explain the alleged crimes and how they were uncovered, despite a thorough effort to conceal them.
Officials did not name the suspect but described her as a property claims technician who had worked in the county’s risk management office since 2001. They said the suspect was fired last May for reasons unrelated to the stolen money.
Only one employee, Ackerman, was terminated from the risk management office last year. As the office’s only property claims technician, she earned about $40,000 in 2016, according to county salary data.
Ackerman did not respond to messages seeking comment this week.
“It’s mind-boggling to think of the degree that she went and the steps that she took to cover her tracks,” said Steve Bartel, the director of the risk management office. “This is certainly a huge black mark, and it frustrates the hell out of all of us.”
County Auditor Vicky Dalton said her office discovered the first of many discrepancies in August – three months after Ackerman’s departure – during an annual review of unclaimed properties.
As part of that review, county auditors reached out to people who had not cashed checks issued to them by the county, including payments for liability claims.
“One of the payees that was contacted said that she had no reason for that check,” Dalton said. “She had never filed a claim.”
Dalton’s office followed up with the risk management office, which processes liability claims by county departments as well as private citizens and businesses. On average, those claims total about $3.1 million each year.
Bartel, the risk management director, said the vast majority of third-party claims are paid by the Washington Counties Risk Pool, which insures the state’s 39 counties. Under the standard protocol, Spokane County then pays deductibles to the risk pool.
Ackerman allegedly found a way to circumvent that process, preparing fraudulent claims, settlement documents and other records using the names of at least 46 people close to her, including her dead father, her grandmother, her brother, her cousin, her daughter-in-law, her son’s friends and multiple personal acquaintances, according to the state auditors’ report.
Bartel said the fraudulent paperwork was unwittingly approved by other employees on dates when he was not in the office. Those employees, one of whom was a loss-control specialist, “did not have access to the claims management database or tracking records to confirm the claim voucher was valid and accurate,” according to the auditors’ report.
Employees who approved the fraudulent payments missed at least two other red flags. Officials said Ackerman had not been officially responsible for third-party claims since 2010, and such claims should have been paid by the risk pool, not the county.
“She knew that if I saw the claim, and there was a payment to a third-party claimant and not the risk pool making that payment … game over,” Bartel said.
He keeps a bulletin board behind his office door to keep track of scheduled vacations and work-related conferences.
“She certainly could have looked at that board and thought, ‘I’m going to have all my documents ready on those days,’ ” he said.
Ackerman also is accused of manipulating annual reports that Bartel presented to the county commissioners, making fraudulent claims appear to line up with the office’s budget appropriations.
“All those numbers have to line up or we spend a lot of time trying to cross the t’s, dot the i’s and do recalculations to figure out where we’re off,” Bartel said. “They always matched up.”
Shortcomings at the county auditor’s office also were to blame, state auditors found.
For example, Ackerman was allowed to pick up checks at the auditor’s office when they should have been mailed back to the risk management office.
“She would write on the top of the voucher, ‘Please expedite. Will pick up,’ ” Bartel said.
Ackerman also was allowed to independently determine which claimants needed to report their claim payments to the Internal Revenue Service, “which might have eventually led to a red flag at the IRS for inaccurate reporting,” the state auditors wrote.
“We have our standard controls that apply to all other voucher payments, except this was a unique situation that didn’t have that same level of controls in place because there are privacy issues, settlement concerns,” Dalton said. “There were things that kept this from being part of the normal process.”
State auditors interviewed two people who were listed as recipients of fraudulent payments totaling nearly $122,000. Both said they had cashed checks, kept $100 to $300 from each check and gave the remaining cash back to Ackerman, according to the auditors’ report. A third person told the auditors he had “assisted some of the payees with the check-cashing process” and also retained $100 to $300 per check.
The auditors also tried to schedule an interview with Ackerman in January, according to the report.
“She initially agreed to meet with us and answer our questions, but never returned our follow-up phone calls to confirm the meeting,” the auditors wrote.
County officials said they have implemented new safeguards that were recommended by the state auditors.
Bartel said a new policy adds restrictions on when a designated backup employee can approve claims payments in his absence, and gives him more oversight of the process. He said he also will review all of the office’s claims payments on a monthly basis.
Bartel said he expects the county to recover the full amount of the stolen money, minus a $25,000 deductible, from an insurance policy that covers financial losses resulting from crimes.
The county also intends to seek restitution “upon completion of the ongoing criminal investigation and prosecution,” the auditors’ report states.
The civil lawsuit was filed in February in Spokane County Superior Court. It was brought by a legal guardian for Ackerman’s mother and appears unrelated to the alleged thefts from the county.
Ackerman was granted power of attorney over her mother’s finances in May 2016, according to the lawsuit. It alleges Ackerman and her husband, Neil Ackerman, “misappropriated, misused, diverted, concealed, stole or otherwise took” an unspecified amount “for their own personal use or the use of others.”
The Ackermans failed to respond to the lawsuit within the allotted 20 days, resulting in a default judgment against them on Monday. Court Commissioner Nicole Koyama’s order doesn’t specify how much money the couple is liable for.
The mother’s legal guardian and their attorneys declined to comment.
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