Federal grand jury indicts Oronogo woman for embezzling money from City of Caney, Kansas

A federal grand jury indicted an Oronogo woman October 10 for embezzling at least $36,500 from the City of Caney, Kansas.

The amount that Carole Sue Coker, 69, embezzled may never be known since she had served as Caney's city clerk for 40 years. She is charged with one count of mail fraud and one count of bank fraud.

The scheme is spelled out in the indictment, which was made in the U. S. District Court for the District of Kansas:

The residents of Caney, Kansas, frequently paid their water bill, as well as other bills owed to the City, in cash. When a cash payment was received, COKER, or a City employee acting on the instructions of COKER, entered the payment into the City’s “Incode” accounting system. 

COKER was responsible for depositing all monies received by the City into the City’s bank account. COKER did not make daily bank deposits, and in the interim between deposits, cash and checks were held in a vault at the City Clerk’s office. 

When the City received payments in the form of checks, COKER was to record the check in the City’s Incode accounting system, however, COKER did not always do so. Sometimes COKER would only enter a portion of the payment into the City’s Incode accounting system, and at other times COKER fail to record the payment. 

Beginning on a date unknown to the Grand Jury, COKER operated what is known as a “check for cash” embezzlement scheme. 

In this scheme when a cash payment was made to the City, COKER recorded the cash payment in the City’s books but embezzled a portion of the cash payments to the City. Coker concealed her embezzlement of cash by failing to enter all of the checks issued to the City in its Incode accounting system. 

The total value of the checks not entered into Incode equaled the amount of cash embezzled by Coker. However, 100% of the checks issued to the City were deposited, in order that the total amount of deposits reflected in the City’s bank statements would equal the amount of payments recorded by Coker in the Incode accounting system. 

As a result of this scheme, the total amount of funds deposited into the bank would appear to balance with the amount of money, both cash and check, reported in the City’s Incode accounting system. 

Beginning no later than January of 2010, and continuing through November 2013, Arvest Bank mailed monthly account statements to the City of Caney reporting the total amount of cash and checks deposited into the City’s bank account. In 2010 the City of Caney received cash payments totaling approximately $202,454.44, however, COKER only deposited approximately $159,245.41in cash into the City’s bank account. 

In 2010 COKER underreported check payments to the City of Caney by approximately $43,286.82. In 2011 the City of Caney received cash payments of approximately $208,251.84, however, COKER only deposited approximately $162,954.36 in cash into the City’s bank account. In 2011 COKER underreported check payments to the City of Caney by approximately $39,272.48. 

In 2012 the City of Caney received cash payments of approximately $218,617.98, however, COKER only deposited approximately $188,131.62 in cash into the City’s bank account. In 2012 COKER underreported check payments to the City of Caney by approximately $31,549.18.

Between January 1, 2013 and October 31, 2013, the City of Caney received cash payments of approximately $209,229.65, however COKER only deposited approximately $167,015.12 in cash into the City’s bank account. Between January 1, 2013 and October 31, 2013, COKER underreported check payments to the City of Caney by approximately $42,214.54. 19. 

At all times material hereto, the amount of deposits made into the City of Caney’s bank account, as reflected in its monthly bank statement, balanced with the payments to the City of Caney as recorded by COKER in the City’s books.