Terri Sanginiti,

Attorney General%27s Office is investigating the allegations.

The treasurer of a Kent County tax ditch organization misappropriated more than $124,000 in taxpayer money, a state audit has found. So far, no criminal charges have been filed.

State Auditor R. Thomas Wagner Jr. posted a report on the audit online this week after investigating an anonymous tip to the state Department of Natural Resources and Environmental Control.

State law allows landowners to be taxed for construction and maintenance of tax ditches in their specific watershed. The ditches normally are used for drainage between private properties.

The funds are collected annually through property tax bills, and the operations of the tax ditch are overseen by volunteers comprised of ditch managers and a secretary/treasurer.

As Tappahanna Tax Ditch treasurer, Jeffrey H. Cox, 47, of the Hartly area, held the account from March 2006 until January, when his account access was revoked, according to Wagner's report.

According to Waner's report, Cox misappropriated $124,654.98, starting in 2009, beginning with unauthorized cash withdrawals.

According to the bank, Cox was the only authorized signer on the tax ditch account and the bank statements were mailed to his address. Wagner concluded that Cox hid his activity by not providing bank statements with the financial reports presented at the annual tax ditch meetings.

Most of the money – $78,870.80 – began disappearing from the account after Cox obtained a debit card for the account in August, 2013, according to the audit.

In the last annual report submitted June 2013 to DNREC, the Tappahanna Tax Ditch account had a balance of $49,640.72, which had dwindled to $14.07 by Dec. 31.

Cox is accused of hiding improper spending from the ditch managers at the annual tax ditch meetings by falsifying financial reports and by not providing bank statements, the report said.

According to the report, Cox spent the money on trips and purchases of a boat, electronics, Apple iTunes, cigars and a tattoo.

"Treasurer Cox abused the authority entrusted in him by making unauthorized purchases and drawing thousands of dollars via bank branch, check and ATM withdrawals," Wagner said in his report.

The completed report has been forwarded to the state Attorney General's Office, which had provided limited investigative support and now will review the case.

Jason Miller, spokesman for the Attorney General's Office, said the formal report was received earlier this week.

"The auditor's report contains very serious allegations," Miller said.

Wagner's office sent Cox a certified letter on Jan. 6 asking that he turn over all records for an audit. Cox signed for the certified letter, but did not respond.

Wagner obtained a subpoena for the documents on Feb. 12 and Cox turned three overdraft notices and three months of bank statements.

Investigation found no evidence that the funds were used for "legitimate tax ditch expenses," according to the report.

Attempts to reach Cox for comment were unsuccessful.

Contact Terri Sanginti at (302) 324-2771 or tsanginiti@delawareonline.com

Contact Terri Sanginti at (302) 324-2771 or tsanginiti@delawareonline.com