A former state tax auditor improperly used state resources to operate her personal business while spying on her competitors’ tax filings, according to a report issued today by Ohio’s inspector general.

By Randy Ludlow –

Lu Zhang, a Department of Taxation auditor until she resigned on Oct. 24, 2014, violated department policies by using state property and accessing tax databases to run her business, said the office of Inspector General Randall J. Meyer.

The report did not disclose the name of Zhang’s business, only identifying it as a “store.” Records show she incorporated The Vape Spot, a liquid-nicotine and related products store on Bethel Road, in early 2014.

Taxation officials summoned the inspector general to investigate in September after learning of apparent misconduct by Zhang, who resigned from her $54,620-a-year job about five weeks after being suspended.

An investigation established that within 24 hours of receiving state permission to operate a business if it did not pose a conflict with her job and she did not use state resources, Zhang was using her state computer for her new business.

She kept track of her sales on her work computer, ordered and bought products and used her state email account to send and receive business emails, the report said. Zhang said she only did so during breaks and lunch hours.

It also was discovered that Zhang was using a confidential computer database to check on the sales tax filings of six business competitors and to access the personal income tax filings of non-immediate family members.

Although she was assigned to bankruptcy audits, Zhang said she pulled the information on business competitors because she had received a tip they were not paying sales taxes. She also prepared tax returns for her business, a violation of her agency’s conflict-of-interest policy.

Meyer’s office referred its report to Franklin County and Columbus city prosecutors’ offices for consideration of potential criminal charges.

The report faulted the Department of Taxation for not periodically reviewing employee’s approved second jobs and not notifying supervisors of employees’ potential conflict of interests.

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