AG probing $288K in missing funds from Elks
LOCK HAVEN — The Pennsylvania Attorney General’s Office has executed a search warrant accompanying a criminal investigation into $288,634 in cash missing from the accounts of the Benevolent and Protected Order of Elks Lodge in Lock Haven.
Jessica L. Eger, a special agent in the Bureau of Criminal Investigations, requested the search warrant. On April 25, authorities seized financial documents from Woodlands Bank.
On Oct. 14, 2016, at the request of Clinton County District Attorney David A. Strouse, the Attorney General’s Office assumed jurisdiction of an investigation started by Lock Haven City Police Det. Sgt. Kristin Smith.
Smith met with Elks member Richard Davy, who turned over a 13-page document outlining his complaint about an alleged theft of funds from the local lodge at 216 E. Main St.
Law enforcement officials spoke with Davy and other board of trustee members in March and obtained the following information:
On April 14, 2015, Davy was elected to the board of trustees for the lodge. At this time, the hierarchy of leaders consisted of Paul Polen as Exalted Ruler, William Wolford as secretary and Susan Johnson as treasurer. The secretary had control of the bank accounts and payroll. Before this date, the head trustee was Ken Englert. Davy said he became concerned when the lodge financial records indicated a money market account with Woodlands Bank was valued at $138,000, but the actual amount was $90,000.
During Davy’s tenure as trustee, he found that Wolford was paying himself, as secretary, $7,540 a year. (The by-laws of the lodge call for the yearly compensation for secretary to be set at $2,900.) Davy contacted Woodlands Bank on behalf of the lodge and was told Englert would call Woodlands Bank and request a check out of the money market account. The check would be sent to the lodge.
ln 2000, the account had $347,888.
In 2016, the account had $59,254.
After the financial review of the money market account at Woodlands Bank, a total of $288,634 was unaccounted for from 2000 to 2016.
Members of the lodge areviewed meeting minutes and could not find authorization for such a withdrawal of monies. As secretary, Wolford took, authored and controlled the meeting minutes. According to Davy, Wolford resigned shortly after being confronted by the lodge board of trustees on June 23, 2016, about the money. As trustee, Davy obtained a copy of a transaction history of the Woodlands Bank account and obtained copies of the requested negotiated checks from the account.
Authorities reviewed the documentation Davy received from Woodlands Bank about the investment management account and determined that from 2000 to 2016, a total of $313,372.90 had been requested and disbursed into two separate accounts associated with Sovereign Bank (which became Santander in 2008).
From the documentation provided by Davy, authorities did not see any checks written to people or employees and all the checks were endorsed to “BPO lodge.”
On March 30, 2017, Agent Eger spoke with Dave Bartges of Woodlands Bank, 2450 E. Third St., Williamsport. Bartges works in the Trust and Asset Management Services office of Woodlands Bank, and oversaw the BPO lodge’s investment management account. Bartges said the account was opened about 20 years ago when the lodge came into some money. An amount was set aside for investing in the stock market. The investment management account was not FDIC insured, rather it was a mixture of bond and stock investments. Woodlands Bank was acting as the broker and was paid administrative fees for managing the account.
Approximately 90 percent of the time, Bartges said, Head Trustee Kenneth Englert would call and request disbursement of funds from the investment management account to the lodge.
Bartges stated he could not recall how many times Wolford had called.
A check would be cut out of the account and mailed to the lodge in Lock Haven. A reason was not required for the disbursement of funds.
Bartges said he would send the lodge an annual financial history and cash flow documentation to keep them apprised of the accounts financial standing. Bartges did note that in 2008 and 2009 the stock market took a hit and that would have affected the account.
Wolford and Englert had access to and authorization for all bank accounts held by the lodge, mainly with Woodlands Bank.
Armed with those facts and allegations, Agent Eger requested Woodlands Bank turn over all financial documents from Jan. 1, 2000, to July 1, 2016, pertaining to any accounts associated with the BPOE lodge, including but not limited to:
r Checking (monthly statements, negotiated checks).
r Savings (monthly statements, deposit slips, withdrawal slips).
r Money market.
r Small business.
r Investment management accounts.
r Financial loans.
r Internal documentation authorizing disposition of funds.
r Internal documentation listing reason given for disposition of funds.
r Documentation of annual history and yearly cash flow regarding the investment management fund.