Grand jury indicts former North Putnam employee

Tuesday, July 7, 2015

A 47-year-old former North Putnam School Corporation employee has been indicted by a Putnam County Grand Jury on charges she misappropriated corporation funds.

Kara L. Smith, Roachdale, is facing two Class D felony charges -- counterfeiting and identity deception -- for allegedly misusing the school's Sam's Club account while serving as treasurer at North Putnam Middle School, a position she held from December 2001 through June 30, 2012 when she took a job at the high school.

Kara L. Smith

The Grand Jury indictment indicates the reported irregularities in the account occurred between Jan. 1, 2008 and Jan. 9, 2013 during which time Smith allegedly signed checks purporting to be a different person or reported having the authority of someone who did not give her such authority.

The indictment further notes that Smith "did knowingly or intentionally obtain, possess, transfer or use the identifying information" of then-Middle School Principal Terry Tippin without his consent or "with the intent to assume the identity of Tippin."

It also alleges Smith kept financial statements and bills concealed from other administrators and made payments from her personal account in an attempt to hide the fact the account was delinquent.

The probable cause affidavit filed in the case indicates Smith may have misappropriated "at least $4,848.84 in funds and possibly in excess of $10,000."

The investigation unfolded after North Putnam School Corporation Treasurer Tanya Pearson received a phone call from Sam's Club on Dec. 12, 2012 stating that the North Putnam Middle School balance was overdue by more than $400 and that the account was carrying an outstanding balance of $4,691.96.

School policy does not allow there to ever be an outstanding balance on such credit cards, officials noted, and Principal Tippin advised investigators that the Sam's Club account had been closed since March 2010.

According to Indiana State Police Trooper Roger Logsdon's investigation, on Jan. 8, 2013, the corporation received an invoice from Sam's Club that the outstanding balance was $4,848.84 with late fees and interest charges having accrued.

Examining the online statement, Pearson noticed that payments were being made from a Hoosier Heartland Bank account with same last four digits as the account in which Smith's payroll checks were deposited. Funds from Smith's Health Savings Account at Teachers Credit Union were also reportedly being used to pay on the closed Sam's account.

However, the last payment made on that account was reported as $200 on Oct. 29, 2012.

During a Jan. 9, 2013 meeting with North Putnam Supt. Dan Noel and then-NPHS Principal Alan Zerkel, Smith reportedly said the account had gotten out of control and she had been making payments because she "felt guilty."

Smith told the school officials, according to the probable cause affidavit, that she never used the school's Sam's Club card to buy anything personally.

However, her employment with North Putnam was terminated after that meeting with Noel and Zerkel.

Meanwhile, a vendor history report between North Putnam and Sam's Club showed that someone had been paying Sam's Club by using middle school checks after the account had been closed.

The investigation indicated approximately $5,655.94 in checks had been written between June 2010 and April 2012 "with no receipts for explanation."

It also alleges Smith had used Tippin's signature stamp to complete the transactions.

During an initial appearance in Putnam Circuit Court, a not-guilty plea was entered for Smith, who appeared before Senior Judge Raymond Kirtley.

The court appointed local attorney Sidney Tongret as her public defender and set a pretrial conference for 10 a.m. Aug. 13. Bond was set at $1,500 cash, which Smith has since posted.

The Smith indictment was the second one coming out of the recent local Grand Jury proceedings.

The first indictment from those proceedings came June 3 against Michael M. Nussbaum, 64, Greencastle, who is facing eight counts of Class A felony child molesting for allegedly molesting three different girls in the care of his wife's babysitting service.

Meanwhile, a third case was reportedly reviewed by the Grand Jury, which was impaneled late this spring, but apparently did not produce an indictment or "true bill" after the grand jurors' scrutiny.

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