DA corrects misuse of seized funds

Franklin County District Attorney Craig Carriero
(Enterprise photo — Chris Knight)

Franklin County District Attorney Craig Carriero (Enterprise photo — Chris Knight)

MALONE — After receiving a reprimand from the federal government for misuse of funds, the Franklin County district attorney’s office hopes to set things right by the end of the year.

District Attorney Craig Carriero said he will ask the county legislature at its next meeting to authorize the return of some $80,000 to the U.S. Department of Justice. That should bring the county back into compliance, he said.

In March 2017, the Department of Justice released the results of an audit of the DA’s office, finding that funds shared with the office from the asset forfeiture program had been misused. The funds are collected by seizing property from convicted criminals, such as money from drug sales, and shared with local agencies involved in enforcing the law.

The audit looked at the Franklin County district attorney office’s books from 2011 to 2015, during which time the office received funds from the DOJ totaling $604,649 and expended $802,196 of the same type of funds. It found that the DA’s office failed to provide adequate oversight of expenditures, failed to keep track of funds, used funds for expenses not allowed and “was therefore unable to demonstrate that funding was used for its intended purpose and was properly safeguarded.”

The audit also faulted the DA’s office for circumventing Franklin County policies.

During the time covered by the audit, Derek Champagne served as the county’s district attorney until 2015, when he left to become a county Family Court judge. Glenn MacNeill served as acting district attorney in 2015.

According to the audit, “The District Attorney’s Office was also found to not follow established county employment policies with regard to employee overtime. We found that the District Attorney’s Office issued over $43,000 in checks for overtime to an investigator in direct violation of Franklin County’s overtime policy. The District Attorney’s Office also opened an unauthorized credit card and used equitable sharing funds to pay the bills for it.”

The audit identified a total sum $454,673 that was not properly accounted for. When the audit report was released, it appeared that the Department of Justice would require those funds to be returned.

However, Carriero, who was not the DA during the years covered by the audit, said that since the office has changed procedures to come into compliance with the rules, it will not be required to pay the total sum back.

“Once the Department of Justice issues are resolved, we will be back in total compliance,” said Carriero.

“We put together a corrective action plan, which they accepted. They basically said, if you turn over whatever’s in your account to us, we can be in good standing and start all over.

“There was no real wrongdoing. We just didn’t have the policies and procedures in place that Department of Justice requires.”

The Department of the Treasury, which also disburses asset forfeiture funds, has declared the DA’s office “non-compliant” and announced it will not share further monies with the office until issues with the Department of Justice are resolved. The Treasury conducted an audit for the fiscal years ending in 2013 and 2014. That audit found “no indication of impropriety with regard to the … handling of Treasury funds.”

It did, however, find that Treasury funds were lumped in with DOJ funds, and required the Franklin County DA’s office to correct its accounting procedures so Treasury funds are segregated from all other funding sources.

On Nov. 30, the DOJ sent Carriero a letter requiring his office return the balance of its program funds within 30 days. The letter continues: “The Money Laundering and Asset Recovery Section understands that the policy violations occurred under the leadership of the former District Attorney.”

Noting the Franklin County DA’s office’s “updated standard operating procedures and evidence that the DOJ sharing account was transferred to its jurisdiction’s finance office,” the letter states that the DA’s office will be eligible to participate in the program going forward.

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