|Public Release Date: December 6, 1996||No. 96-46|
We conducted a special review of the theft of money from the Department of Labor and Industry (DOLI). On July 1, 1996, the Department of Labor and Industry reported a suspected theft of state funds to the Office of the Legislative Auditor's investigations unit. DOLI had obtained evidence suggesting that Ms. Cynthia Hamblin, a department employee, had diverted and personally endorsed a $141 check made payable to the state of Minnesota. The check was intended for the Minnesota Pollution Control Agency (PCA). The payer had erroneously routed the PCA payment to DOLI. The alleged check diversion came to light when the payer received a late notice and notified PCA that the company already had paid the fee. PCA contacted the State Treasurer's Office who determined that the check had not been deposited into a state account. PCA notified DOLI, and DOLI notified us of the suspected theft.
Our review addressed the following questions:
We reviewed Ms. Hamblin's personal bank account records covering the period from September 25, 1995, through July 2, 1996. We subpoenaed and reviewed a sample of checks which Ms. Hamblin deposited into her personal bank account. We obtained from her bank a photograph and a corresponding deposit transaction record which showed Ms. Hamblin depositing a check made payable to DOLI. In addition, DOLI forwarded evidence of stolen checks which the department received from customers responding to past due notices. We took testimony under oath from Ms. Hamblin.
DOLI employed Ms. Hamblin from March 22, 1995, to August 6, 1996. DOLI originally appointed Ms. Hamblin to a temporary clerk typist position. When Ms. Hamblin's temporary appointment ended, DOLI reappointed her to the clerk typist position on an emergency basis. DOLI terminated Ms. Hamblin following the department's investigation into the theft of state funds. DOLI effected Ms. Hamblin's termination by refusing to certify her as a permanent employee. However, DOLI's termination letter to Ms. Hamblin stated that "employee misconduct-theft" was the reason that DOLI declined to certify Ms. Hamblin.
Ms. Hamblin stole money from the state of Minnesota. She endorsed, with her own name, checks payable to the state of Minnesota and either cashed the checks or deposited them into her personal checking account. Ms. Hamblin deposited the majority of the checks into her bank account via automated teller machines. To date, we have obtained 23 checks that were payable to the state of Minnesota that Ms. Hamblin endorsed and diverted for personal use.
We obtained a bank deposit transaction record together with an automated teller photo which shows Ms. Hamblin depositing a check made payable to the Department of Labor and Industry into her personal checking account. A DOLI employee also provided information to indicate that Ms. Hamblin diverted cash payments which a license applicant made to the department.
We conclude that Ms. Hamblin diverted money from DOLI on a continuing basis. Note: All checks were made payable to the "State of Minnesota" or "Department of Labor and Industry," but endorsed with the signature, "Cynthia Hamblin."
We have reported this information to the Ramsey County Attorney for possible criminal prosecution.
Pursuant to Minn. Stat. Section 3.975, we are referring this report to the Attorney General for civil recovery of funds.
This report is intended for the information of the Legislative Audit Commission and the management of the Department of Labor and Industry. This restriction is not intended to limit the distribution of this report, which was released as a public document on December 6, 1996.
James R. Nobles John Asmussen, CPA
Legislative Auditor Deputy Legislative Auditor
Report Signed On: December 3, 1996