Audit discovers falsified records, years of improper self-payments in scheme that defrauded taxpayers

The former bookkeeper of a northwest Missouri road district misappropriated more than $286,000 during the seven years she served as the district's secretary/treasurer, State Auditor Nicole Galloway said today. The Auditor's Public Corruption and Fraud Division released the audit of the Plattsburg Special Road District in Clinton County, with the district receiving a rating of "poor."

The review determined that former secretary/treasurer Ava Langner falsified financial statements to hide some of her misappropriations. Also, Langner may have created or modified other official records even after she had been fired from the district and the State Auditor's Office had served her with a subpoena for the documents.

"This was a brazen betrayal by an official entrusted with public funds, who then tried to cover her tracks by falsifying documents," Auditor Galloway said. "Restoring public trust and confidence in the district may be a challenge going forward, but it is vitally important that it happen."

Last fall, a whistleblower contacted the Auditor's Office regarding potentially fraudulent activity in the Plattsburg Special Road District. After a preliminary investigation found the allegations credible, Auditor Galloway asked for, and received, a request from district officials to conduct an independent audit.

The audit found that the improper payments from the district's account to Langner and her company began shortly after she was appointed in 2011 to handle bookkeeping for the district. The payments grew to more than $50,000 a year and totaled more than $156,000 before she was fired by the district board in October 2018.

Over the same period, Langner made more than $125,000 in electronic payments from district funds to pay her personal credit card bills. Among the items were $30,000 in charges for business products the audit said may have been used to operate her two personal businesses. The credit card statements showed Langner spent more than $14,000 for travel and entertainment, including vendors such as Carnival Cruise Lines, Starlight Theatre, the Kansas City Royals, Silver Dollar City, and Space Center Houston. Langner also used $2,600 of district monies to pay her personal and company utility bills, as well as personal hotel costs.

Based on the file properties of meeting minutes provided electronically, the former secretary/treasurer created or modified documents after she was terminated. Of the minutes Langner provided for 49 meetings, the file properties of 31 of them show they were electronically created/modified in October and December 2018 -- including 26 files created after Auditor Galloway served her with a subpoena for the records. In at least four of those instances, it appears that the minute meeting files were created to make it seem as if the board authorized increases in fees to Langner and her company.

Langner also falsified the district's published financial statements to conceal over $131,000 of payments to her company, over $76,000 of payments for her personal credit card bills, and the district's declining financial condition and cash balances.

The audit also found there was insufficient oversight of the secretary/treasurer by the district board, and applicable officials and employees did not have bond coverage. The lack of a written contract between the district board and Langner and her company also meant that the services to be provided for taxpayers and the rate of compensation were not established.

"As part of the audit, my Public Corruption and Fraud Division has been working closely with federal law enforcement and will continue to provide them with assistance now that the audit is complete," Auditor Galloway said. "I appreciate that the special road district board has responded that it will take the necessary steps to ensure proper oversight and protection of taxpayer dollars in the future."

The complete audit can be found here.