KNOXVILLE, Tenn. - On Oct. 7, 2014, Kathy Winters, 58, of Harriman, Tenn., was sentenced by the Honorable Pamela Reeves, U.S. District Court Judge, to serve 40 months in prison. Upon her release from prison, she will be under supervision of the U.S. Probation Office for three years. She was also ordered to pay a total of $428,076.94 in restitution, which represented the amount taken from three separate entities discussed below.
In May 2014, Winters pleaded guilty to a one-count information charging her with theft of government funds from the U.S. Department of Education. According to the plea agreement on file with U.S. District Court, Winters served as treasurer for the Tennessee Attendance Supervisors Steering Committee (TASSC), an organization that provides training and information to aid school attendance personnel in improving their professional competencies.
In the fall of 2012, the Tennessee Comptroller of the Treasury became aware of irregularities in the TASSC bank account and an investigative audit followed. The audit revealed that $82,636.79 was missing from the TASSC bank account during the time Winters had access to the funds. The investigation expanded to two additional entities when investigators found that she also served as federal projects administrative assistant for the Alcoa City School District and treasurer for East Tennessee Attendance Supervisors Association (ETASA), an association that provides opportunities for the continuous study of attendance problems. This broadened investigation revealed that ETASA suffered financial losses of $1,236.36. Additionally, Alcoa City School District suffered $344,203.79 in financial losses, which included federal grant money paid to the school district for special education expenses.
Winters took the money by creating false invoices which demanded payment to TASSC or ETASA, forging an approving official’s signature to the invoices, and forwarding them to Alcoa City for payment. Winters endorsed the checks issued by Alcoa City as payment for the false invoices. She then either deposited the funds into her personal account or into either the TASSC or ETASA account and then withdrew the money by a check payable to her or through an ATM withdrawal.
In addition to the invoice scheme, Winters made unauthorized personal charges on Alcoa City School District credit cards and falsified travel reimbursement requests for unauthorized travel. In both instances, she forged signatures of approving officials and submitted the credit card billing statements and travel claims to the Alcoa City for payment.
“Those who are entrusted with public funds and choose to embezzle them for their own personal use will be aggressively investigated and prosecuted," said U.S. Attorney Bill Killian.
Agencies involved with this investigation included the Tennessee Comptroller’s Office, Financial Compliance Unit and Tennessee Bureau of Investigation. Assistant U.S. Attorney Brooklyn Sawyers represented the United States.
Source: U.S. Department of Justice, Office of the United States Attorneys
