Prosecutors Probe $248,437 Insider Theft From State Housing Authority
Investigators Suspect Lowly Customer Liaison Diverted Thousands To Accomplices
Last Updated: 1020 days ago
Investigators suspect that a lowly customer clerk stole $248,437 from the Colorado Housing and Finance Authority, according to court records obtained by TheDenverChannel.comA paper trail showed the former CHFA clerk used her access to a loan-servicing system to divert money from borrowers escrow accounts into bank accounts controlled by two accomplices, a search warrant affidavit said.The $248,437 was diverted over a month last spring in 10 payments the woman clerk made to new vendors she set up in the CHFA loan system, according to the affidavit written by Denver district attorney Investigator Daniel Chun.TheDenverChannel.com is not identifying the three suspects because they have not been arrested or charged.Denver district attorney spokeswoman Lynn Kimbrough said the investigation is ongoing.The Colorado General Assembly created the housing authority in 1973 to address a shortage of affordable housing in the state, the CHFA website said. The CHFA funds single family homes for qualified buyers and supports development of apartments for low and moderate income residents. It also makes loans to small and medium sized businesses.In response to the thefts, the CHFA conducted an internal investigation and tightened financial controls and employee oversight, said Rachel Basye, the agencys director of marketing and strategic development."We take this situation very seriously, Basye told TheDenverChannel.com.Weve implemented some additional controls in our loan-servicing system, Basye said. We have added layers of approval for payments out of escrow accounts.CHFA also now requires employees take at least five days vacation at one time during the year, Basye said. It is a best practice that is used in a lot of banks, she said. It allows us time to notice any unusual activity that may have surfaced during the time when employees are on that mandatory five-day vacation. The agency also filed an insurance claim to cover money stolen from borrowers accounts, she said.Our bottom line concern was ensuring that our customers didnt suffer any financial losses related this, she said. No customer has faced any adversity because of this (theft)."The woman customer clerk worked at the authority for three years until she departed May 27 -- about a week after a co-worker reported the thefts to CHFA supervisors, the affidavit said.Asked if the clerk was fired or resigned, Basye said personnel privacy laws prevented her from disclosing how the woman left.All I can only say is she's no longer here, Basye said.The theft conspiracy was discovered May 19 when another CHFA employee came forward and said the customer clerk "had manipulated the system and take money from CHFA's bank account number at Wells Fargo Bank," the affidavit said.The District Attorney's Office was alerted about the theft and forgery conspiracy June 10 by Dana Pearce, the CHFA's internal audit manager, the affidavit said.Pearce said the customer clerk had authorized access to the "password protected" Nortridge Loan Service software system used by CHFA, the affidavit said.An audit revealed the customer clerk had set up five new vendor accounts in the CHFA system supposedly for insurance, investment and property management firms, each with their own outside bank account, the affidavit said.The customer clerk made at least 10 diversions of money from escrow accounts using checks and electronic transfers to the accounts of vendor she had established, the affidavit said.The payments were made from March 19 to April 22 and ranged from $78,120 to $289, the affidavit.Investigators obtained the search warrant for bank records, the affidavit said.Officials at several banks said the account holders were two people whom investigators suspect are outside accomplices of the former clerk, the affidavit said.