INDIANAPOLIS – Today Indiana Attorney General Greg Zoeller’s Office filed a lawsuit against a former clerk-treasurer of the Town of Chandler, Ind., who misappropriated public funds by purchasing home electronics, computer equipment and vehicle batteries using the town’s credit card. The Attorney General’s lawsuit seeks recovery of more than $143,000 in public funds, fees and penalties owed to the town government due to former clerk-treasurer Timothy D. Osha’s misappropriation.
The State’s lawsuit, filed today in Warrick County Circuit Court in Boonville, Ind., seeks $143,010.36 as well as treble damages, costs and attorneys fees from Osha, a Chandler resident. Osha resigned from office as town clerk-treasurer in October, and earlier this month Osha also was criminally charged by prosecutors with theft and fraud.
“It is an affront to public trust when an elected official whose duties included managing public funds is accused of misusing those funds. Misappropriation in public offices for personal gain will not be tolerated and we will use the legal means at our disposal to obtain repayment from this defendant so the town treasury can be reimbursed,” Zoeller said.
In an audit report issued December 10, the State Board of Accounts (SBoA) found that between January 2008 until his resignation in October, Osha used the town government’s credit card to purchase various personal electronics, including Gamer Extreme videogame equipment, six remote controls, three TV tuners, various software packages, a motorcycle battery, golf cart battery and ATV batteries, an Apple MacBook and three Apple iPads, headphones, three notebook computers and three laptops. Since Osha’s purchases using town funds were personal and not for town government, the audit found he must reimburse $23,633.51. Additionally, Osha owes the town $310.34 for a carpet cleaner purchased with town funds but not located among the town’s equipment.
Also, the SBoA audit found numerous instances of bookkeeping errors that occurred during the time Osha was clerk-treasurer and in charge of the town’s finances, including failing to file tax withholdings. Late tax payments to the Internal Revenue Service and Indiana Department of Revenue and late unemployment insurance payments to Indiana Department of Workforce Development resulted in late fees, penalties and interest being charged to the town. The State’s lawsuit demands that Osha repay the late fees, penalties and interest, totaling $79,266.69.
When it learned of possible bookkeeping issues with the elected clerk-treasurer, the Chandler Town Council requested a State Board of Accounts audit. The investigation and audit of the incomplete records incurred another $39,799.82 in auditing costs, for which the Attorney General’s Office seeks repayment from Osha.
Today the Attorney General’s Office also filed a motion for a temporary restraining order asking the Warrick County Circuit Court to freeze Osha’s assets – including a house, five vehicles and bank and retirement accounts. Judge David Kelley granted the temporary restraining order and scheduled a hearing January 7, 2013, on the State’s motion for a preliminary injunction. If granted, the injunction would prevent Osha from selling, transferring or concealing the property until the underlying lawsuit is resolved to preserve assets that could be recovered later to reimburse the town for the amounts misappropriated.
In the State’s underlying complaint to recover public funds, Zoeller asks the court to enter a civil judgment against Osha. The Attorney General then could pursue a monetary judgment through collections, and could seek to attach liens on property, garnish wages or take any other actions a creditor could take against a debtor to collect on a debt.
Also named as defendants are two bonding companies, Western Surety Company of Sioux Falls, S.D., and Auto-Owners Insurance Company of Indianapolis, which at different times wrote different surety bonds on Osha for $15,000 or $30,000 of coverage. Such bonds serve as a type of insurance policy against theft by an official. By naming the companies in the lawsuit, the State seeks to redeem the surety bonds to partially reimburse the Town of Chandler for the amount owed. Any portion not covered by bonds would be Osha’s personal responsibility.
Earlier this month, prosecutors criminally charged Osha with theft and fraud, both Class D felonies, and he awaits trial in the criminal charges. Decisions about filing criminal charges in audit cases are solely the jurisdiction of county prosecutors, not the Attorney General. Whether a public official is civilly responsible for repaying misappropriated funds is a separate issue from whether they are criminally responsible for a loss.
Through his role as lawyer for state government, the Attorney General has legal jurisdiction to file civil lawsuits based on State Board of Accounts audits. Through such lawsuits, Attorney General Zoeller’s Office since January 2009 has collected approximately $2.4 million from former officials named in SBoA audits as reimbursement for amounts misappropriated.
NOTE: Attached is the complaint to recover public funds the Attorney General’s Office filed today in Warrick County Circuit Court against Timothy D. Osha.
The State Board of Accounts certified audit report B41501 of the Town of Chandler is at this link: http://www.in.gov/sboa/WebReports/B41501.pdf