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State moves to freeze assets of former Lake Ridge schools official

Lake Ridge Schools business manager James Huddlestdetails Lake Ridge Schools financial picture during board meeting February 11 2013. | Jeffrey

Lake Ridge Schools, business manager James Huddleston details Lake Ridge Schools financial picture during the board meeting February 11, 2013. | Jeffrey D. Nicholls~Sun-Times Media

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Updated: June 9, 2013 6:31AM



State officials froze the accounts of former Lake Ridge Schools business manager James W. Huddleston on Tuesday after a preliminary audit showed he misappropriated more than $133,000 in funds from the school district.

Huddleston resigned from the district and was escorted from the building on April 4 after the school became suspicious of transactions in a school savings account that Huddleston had opened without the knowledge of Superintendent Sharon Johnson-Shirley and the School Board. He was the only authorized signature on the account.

The next day, Johnson-Shirley requested an immediate review of the district’s finances by Educational Services Corp. and a special audit by the State Board of Accounts.

In the audit, state examiners discovered that more than $150,000 — mostly refunds from employee health care and prescription drug benefit programs intended for the school’s self-insurance fund — was instead deposited into the savings account set up by Huddleston. He withdrew $133,624 in cash and checks from the account between July 2011 and April 2013, which caused the school to incur $525 in credit union fees. The audit found that Huddleston spent the money on credit card payments, electric and gas utility bills, medical, dental and orthodontist bills and payments to auto dealerships and wholesale stores.

Indiana Attorney General Greg Zoeller filed motions in Jasper County Superior Court to freeze Huddleston’s assets — including bank accounts, real estate and vehicles — and prevent their transfer until a full audit is completed. The motions were filed in Jasper County because Huddleston resides in Wheatfield. A hearing on the motions is set for May 16.

The Attorney General’s Office may file a complaint to recover the funds in the future, but any criminal charges would have to come through the Lake County Prosecutor’s Office.

“When a school official is accused of paying personal bills with school funds it is an egregious violation of the public trust, and my office will use all means at our disposal to claw back taxpayers’ money and reimburse the school treasury,” Zoeller said in a statement.

In addition to the more than $133,000 in misappropriated funds, the State Board of Accounts incurred nearly $7,000 in auditing costs. The total amount of restitution the state seeks from Huddleston is $141,149.

The Attorney General’s motions for a temporary restraining order and prejudgment attachment were filed under a state law the Legislature passed in 2009 at Zoeller’s urging: House Enrolled Act 1514-2009, the public accountability law.

“This new legal tool allows the State Board of Accounts to notify the Attorney General’s Office through a preliminary audit of potential fraud on public funds much earlier, and allows us to intervene in court to prevent defendants from transferring or concealing assets — preserving them to recover later to reimburse the public treasury,” Zoeller said.



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