Former Employee Pleads Guilty To Defrauding Rusk County Of More Than $700,000

County Tightens Internal Controls And Seeks Outside Audit Of Processes

The county government building for Rusk County in Ladysmith.
File photo of the Rusk County government building in Ladysmith. J. Stephen Conn via Flickr (CC-BY-NC)

Over the span of roughly a decade, a former employee defrauded Rusk County of more than $700,000 in taxpayer money to make credit card, mortgage and car loan payments.

Sandra Stiner, 65, of Ladysmith also used the money for shopping, gambling and the purchase of a French bulldog.

Stiner pleaded guilty to wire fraud, identity theft and criminal asset forfeiture in the U.S. District Court for the Western District of Wisconsin on Aug. 12. Stiner formerly worked as a child support manager in the Rusk County Department of Health & Human Services before retiring in January last year.

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From 2010 to 2019, Stiner created fake invoices for nonexistent services from a real home-based therapy service that had previously contracted with Rusk and Price counties to provide care for children on the autism spectrum.

She used identifying information for real people, including the company’s taxpayer identification number, to create documents that appeared authentic. Then, Stiner set up a fake email address and a bank account to wire payments, defrauding the county through bypassing internal controls.

The activity was identified when the department conducted an internal review of contracts and cases prior to Stiner’s retirement, according to Andy Albarado, the county’s administrative coordinator.

“Through asking some questions and digging for some information, things just kind of unraveled from there,” said Alabarado.

Albarado said the county was implementing changes before the fraud was discovered and has adopted practices like detailed contract reviews and random sampling of invoices to verify payments. He believes such practices would have prevented the misappropriation of county funds.

“If it would have been put in place years ago, we don’t think it would have carried on as long as it had,” he said. “The biggest thing is to keep following those practices and not have a repeat of this situation.”

Stiner is not the only county employee to misuse funds in Rusk County. Albarado noted the county identified inappropriate purchases by another department in 2018.

The county’s former maintenance supervisor Mike Naczas was found guilty of misdemeanor theft this year as the result of a plea hearing after initially being charged with multiple felonies for using county identification to buy furnaces, tires, and other materials. Naczas completed making restitution payments for the theft, according to court records.

The incidents prompted the county to adopt a whistleblower policy in the last year and contract with an outside vendor to process anonymous tips or complaints from employees. In Naczas’ case, maintenance workers told authorities he ordered them to install appliances for his relatives, according to the Ladysmith News.

“Employees already have whistleblower protections in federal law, but we wanted something black and white that we gave to the employees that showed there are protections for them if they have things they want to come forward with, but don’t feel comfortable in doing so,” he said.

Albarado doesn’t believe any employees had knowledge of Stiner’s fraudulent activities prior to the county’s discovery.

As part of a plea agreement, Stiner has agreed to pay back the $702,351 she stole from the county, or else forfeit assets that include her real estate, vehicles, boats and pension. Stiner’s sentencing has been set for Nov. 4, and she could face up to 22 years in federal prison.

Within the next month, Albarado said the county plans to seek proposals from an independent third party to conduct an audit of county processes to identify any other weaknesses.

Stiner’s attorney did not immediately return a request for comment.

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