Former Auburn city clerk faces federal embezzlement charge

The former city clerk of Auburn was charged in federal district court Tuesday with embezzling at least $186,000 in less than four years from the community in rural southwest Shawnee County.

Alice Riley, 61, of Topeka, was charged in an indictment released Tuesday in U.S. District Court in Topeka, according to Barry Grissom, the U.S. Attorney for Kansas. She was charged with one count of interstate transportation of stolen funds.

If convicted, Riley faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The FBI investigated the case.

Riley's attorney, J. Richard Lake, said Tuesday afternoon she had no comment at that time. As far as he knew, he said, the only case against his client was filed in federal court.

Riley resigned on Feb. 13, amid questions from the city council and multiple-year audits into the city's finances. She had served in the appointed position for 31 years.

While the city in all likelihood will file a separate civil case against Riley once the criminal charges are finished, Auburn council president Lee Tibbetts was realistic about the city's chances of getting back its money.

"I have very little hope of recovering our money," Tibbetts said Tuesday. "I'm guessing it's gone."

The city will be able to recover only $20,000 from a bond taken out against Riley. Its insurance, the council found out this month, doesn't cover theft.

The criminal information report alleges Riley began embezzling money in 2009.

Prosecutors say Riley issued duplicate payroll checks to herself, as well as other unauthorized checks she deposited into her own personal accounts. She attempted to cover up the embezzlement by creating false entries in the city's books and bank statements, Grissom said in a news release.

Tibbetts said the audit the city paid for found a little less than $186,000 in its first round of investigation, which reviewed finances from Jan. 1, 2011, through Jan. 31, 2014. It since has authorized an audit from 2008 to 2010, but it isn't yet finished.

"It's definitely higher from the first three years," he said Tuesday when informed of the federal announcement. "I don't know if the U.S. Attorney's Office is looking back further, but they got a copy of the draft of the first three."

Information about the former clerk's activities previously had been vague. The city council has been citing its ongoing investigation, and even meeting minutes did little more than allude to what truly was going on.

From January to March, minutes show the Auburn City Council spent nearly 90 minutes behind closed doors and called three special meetings to discuss Riley and the city's finances. Between Jan. 28 and Feb. 17, Riley went from a nearly 31-year employee to being suspended without pay prior to her resignation.

In those meetings, the council voted to change the locks to city hall and the signatures required for financial transactions.

Accepting Riley's letter of resignation, the council stated, "would not absolve her from any civil or criminal liability." The council further declined Riley's request to be compensated for unused vacation time, which at about 200 hours worth $25 an hour comes to $5,000, less taxes. All vacation compensation was withheld, minutes indicate, "to be used to offset any potential payroll overpayment."

Meanwhile, the Auburn City Council hired former billing clerk Carol Erikson to serve as the city's new clerk for roughly $42,000 a year, Tibbetts said. It also recently hired a new billing clerk, he said, so the office is running smoothly once again.