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Zoeller Files Suit to Recover $42K for Lake Satation Schools

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LAKE STATION, Ind. – Today Indiana Attorney General Greg Zoeller’s Office filed a lawsuit in Lake County to recover nearly $42,000 from a former extracurricular school treasurer who, according to an audit, misappropriated elementary school funds.
Named as defendant in the Attorney General’s lawsuit is Jane Woynaroski, who until March 2013 was extracurricular treasurer at Virgil I. Bailey Elementary School in Lake Station, Ind., where she was in charge of collecting school fees and depositing them.
According to a special investigative audit by the State Board of Accounts, Woynaroski failed to deposit $23,003.27 in elementary school funds into school accounts over a five-year period from July 2008 to March 2013.  Because of the incomplete and inadequate condition of the financial records Woynaroski kept, the State Board of Accounts incurred another $18,843.83 in auditing costs reconstructing her transactions. In the lawsuit the Attorney General’s Office filed today, the State demands Woynaroski repay both amounts, a total $41,847.10.
“It is very disheartening to see the brazen violation of the public trust by this defendant in misappropriating elementary school funds and it sends a terrible signal to students and parents. My office will use all legal means at our disposal to compel this individual to repay what she owes the school system and the taxpayers,” Zoeller said.
The State Board of Accounts audit issued June 18 found that Woynaroski regularly failed to properly deposit fundraising money, textbook rental fees and other official receipts into the elementary school’s bank account.  Examiners reviewing deposit slips found Woynaroski misappropriated school funds by not recording and depositing cash receipts. Additionally, Woynaroski replaced cash deposits with checks received for other purposes, which were not properly recorded.
Today in Lake County Superior Court 11 in Crown Point, Ind., the Attorney General’s Office, acting as collection agent for the State, filed a complaint to recover public funds against Woynaroski, seeking $41,847.10, plus attorneys’ fees and treble damages.
Zoeller’s office today also sought a temporary restraining order against Woynaroski to prevent her from selling, transferring or concealing financial assets such as two properties, three vehicles, bank accounts and retirement accounts. Judge Diane Kavadias Schneider granted the temporary restraining order, which is in effect until a court hearing July 10 on the Attorney General’s motion for a preliminary injunction, which would freeze Woynaroski’s assets indefinitely until the overall lawsuit is concluded.  The purpose of the temporary restraining order and injunction is to preserve whatever assets are available so that the State is able to recover something later to reimburse the Lake Station Community Schools' treasury for the amount owed.
If the court eventually enters a civil judgment against Woynaroski, then the Attorney General’s Office can pursue a civil collections action against her to garnish wages, attach liens, or take other actions any creditor can take against a debtor to collect on a debt. 
Also named in the Attorney General’s lawsuit are two bonding companies that provided surety bond coverage over the extracurricular treasurer position.  Ohio Casualty Insurance Company provided $5,000 in bond coverage each year from July 2008 to July 2012, and Selective Insurance Company of America provided $10,000 in bond coverage for July 2012 to July 2013.  By naming the bonding companies as defendants, the Attorney General’s Office hopes to recover the bond money to reimburse the school treasury. Any amount not covered by bonds, however, would be Woynaroski’s personal responsibility.
Decisions about filing criminal charges in audit cases are solely the jurisdiction of county prosecutors, not the Attorney General. Whether a public employee is civilly responsible for repaying misappropriated funds is a separate issue from whether they are criminally responsible for a loss. Through his role as collection agent for the State, the Attorney General has legal jurisdiction to file civil lawsuits to recover public funds based on State Board of Accounts certified audit reports.
Since January 2009, the Attorney General's Office has collected more than $2.4 million from former local government officials whom the State Board of Accounts found had misappropriated public money. Many of the acts of misappropriation occurred because an individual had the ability to divert or embezzle public funds with no oversight or supervision. Earlier this year, the Legislature passed a bill that Attorney General Zoeller had recommended, House Enrolled Act 1333, which authorized a legislative study of requiring internal accounting controls – such as dual signatures – on public employees who handle public money.  Zoeller noted that if two or more employees were required to sign off on large transactions involving public funds, then misappropriation and embezzlement would be more difficult for one individual to commit without being detected.  
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