LINCOLN — A new state audit says the former general manager of the North Fork Area Transit used his position to embezzle more than $740,000 by falsifying time sheets and seeking reimbursement for expenses that were never paid.
Jeffrey Stewart, according to the audit, spent “considerable time” during working hours at two Iowa casinos directing substantial wire transfers there, and charged over $35,000 in expenses for a family vacation to Florida.
State Auditor Mike Foley said his auditors found “extraordinary and egregious breaches of law and common-sense management practices.”
He said the forensic audit will be given to prosecutors as they prepare their case against the former director, who was arrested last month in Texas on theft charges. The audit suggested that Stewart may have also committed forgery and abuse of public records.
Fled to Mexico
Stewart had fled to Mexico after an investigation was launched into alleged mismanagement of the agency’s funds that began in early December.
He is suspected of embezzling more than $740,000, according to the audit reports. It forced the transit agency to suspend operations in January, according to the Norfolk Daily News. Donations, including some from the foundation of Norfolk native Johnny Carson, allowed the agency to reopen this spring.
The nonprofit is subsidized mainly by the Nebraska Department of Transportation, but also gets funding from Madison County and the City of Norfolk.
‘Work’ hours at Iowa casinos
Foley’s auditors, in what was described as “the rest of the story,” found that:
- Time sheets, used to seek reimbursement from the state, county and city, were falsified, claiming funds for services never rendered. Auditors noted that the tampering was done “in a clumsy and obvious manner,” but despite “glaringly obvious problems” were accepted by the state DOT.
- The agency’s credit card was used by Stewart to pay for over $35,000 in expenses for his family’s vacation in Florida. Time
State Auditor Mike Foley (Courtesy of the ebraska State Auditor’s Office) sheets submitted indicated that Stewart worked eight hours a day during a four-day period, but his wife’s social media posts showed the family at Disney World, a Hard Rock Hotel & Casino, SeaWorld and other attractions.
- Stewart spent 90 hours at two casinos in Sioux City, Iowa, and Carter Lake, Iowa, while charging that time on his work time sheet. He also used his agency car to drive to the casinos. “Numerous significant wire transfers to the two Iowa casinos” using a transit agency credit card were also noted.
- North Fork transit’s accounting records were “distorted and misleading, ostensibly to disguise financial impropriety.” One tactic was to write a check to a vendor and then never mail the check — but use it to obtain reimbursement from the state and other funders of the nonprofit. A “multitude” of such unmailed checks were found by investigators.
- Time sheets submitted to the state DOT contained “extraordinary and unreasonable” work hours claimed. One driver, for instance, claimed to have worked 53 hours straight.
- Only 29 of the 90 North Fork transit employees identified as “drivers” had a valid commercial driver’s license or learner’s permit. One driver didn’t have any driver’s license and had two convictions for driving under the influence.
“There is no doubt whatsoever that (North Fork Area Transit) has seriously abused the trust of the citizens, not to mention their hard-earned tax dollars,” Foley said in a press release.
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State auditor finds fraud, theft, payment for Florida vacation in audit of Norfolk transit agency - Nebraska Examiner
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