Embezzlement cases steal money from most vulnerable

Perhaps Center Township Trustee Eugene Akers summed it up best: "Here we are again. Everybody wants to steal from the poor folks."

On Friday, federal officials announced criminal charges alleging that Carmen Batts-Porter, the business counselor for Aker's office, stole more than $66,000 in Social Security payments meant for the poor, elderly and disabled.

Batts-Porter, the daughter of Indiana State Rep. Gregory Porter, D-Ind., is accused of using the money to pay off credit card bills and take a trip to Miami.

The charges come two months after the township's former chief financial officer, Alan Mizen, pleaded guilty to stealing nearly $350,000 in township funds designated to assist the poor. Prosecutors said Mizen used the money to buy a house, jewelry and take vacations to the Caribbean and the Cayman Islands.

In both cases, the victims were among the most vulnerable in the city. And the thefts bring into question the oversight of township government finances.

Center Township is home to some of Marion County's poorest people. Nearly half of the township's residents live in households where total income and benefits is below $25,000. More than 36 percent live below the federal poverty line, compared with 20 percent for the county.

For many of those people — including the elderly, the disabled and orphans — the township trustee is the last resort for assistance.

But over the past five years, federal officials allege, Batts-Porter took money from the accounts of 11 people who counted on the trustee's office to manage their Social Security benefits and pay their bills. Investigators said many of the victims had no way of knowing how much money was taken from them. One victim was an orphan in foster care. Another account was in the name of a dead person.

The scheme Batts-Porter is accused of running was simple, federal officials say. She managed Social Security payouts in the trustee's office. The office was sanctioned by the Social Security Administration to handle more than $1 million in payments per year for residents who are incapable of overseeing their finances.

Typically, the trustee is designated by a court to handle those funds for residents who can't do it themselves or don't have family members to help.

"Instead of doing what she's supposed to do with the money, she took the money and wrote checks to pay off her Target credit card bill," said Bradley Blackington, the senior litigation counsel who is prosecuting the case.

Many of the checks Batts-Porter is alleged to have written to pay off her bills had memo lines with the beneficiary's name. One, according to a probable cause affidavit, read "load funds onto shopping card."

Federal investigators from the Social Security Administration discovered the money was missing during a routine audit, the U.S. attorney's office said.

Batts-Porter could be sentenced to up to 10 years in federal prison if she is convicted. She appeared in court Thursday and was released on bond. She could not be reached for comment.

A spokesman for her father said the longtime lawmaker had no comment about the incident involving his daughter.

The arrest of Batts-Porter comes only months after the arrest of Mizen on similar federal corruption charges. An audit released by the State Board of Accounts after Mizen's plea showed the former CFO had access to blank checks and the authority to write and sign them on his own using an electronic copy of the trustee's signature. Mizen's plea has not yet been accepted by the federal court handling the case.

Although Batts-Porter, 32, and Mizen both worked in the same office at the same time, a spokesman for the U.S. attorney's office said investigators are unaware of any "conspiracy between the two of them."

"The Center Township Trustee's Office does not exist for the benefit of the Center Township Trustees Office," said acting U.S. Attorney Josh Minkler. "Public officials need to serve the public and not serve themselves."

Akers told The Star he knew nothing about the alleged theft by Batts-Porter until he was contacted Friday by the media.

"It was shocking to hear that," he said. "Right now we have an in-house audit going on. We've been contacted by the FBI, and other than that, no, I don't have any others than that."

Following Mizen's guilty plea in November, John Lowery, an attorney for the township, told The Star that Akers had implemented reforms to prevent the township's employees from stealing from the poor.

"What we have done, we've changed our finance system, which does a lot of reporting," Akers said Friday in regard to those changes.

The old system, he added, did nothing.

"Now, this one here reports just about everything going," he said. "I've got a bunch of reports they just gave me before they went home that I'm going to be looking at when I get home, which is telling me everything (Batts-Porter) has done for the last two months. I'm going to cross-check that."

Akers said two other people worked in the office with Batts-Porter but were unaware of the alleged thefts.

"The other two are still working there," he said. "I have talked to them. They knew of nothing."

Akers asked for an internal audit when he took office four years ago and said another examination of township books was just completed.

"You can come check my books any time you'd like; you and everybody else," he said. "And mishandling of funds, I don't tolerate that at all. At all."

The two recent cases raise questions about whether Indiana has a strong enough system of checks and balances to prevent such thefts from happening again in Center and other townships across the state. It is a longstanding concern that played a role in prompting former Gov. Mitch Daniels to push for elimination of township government during his tenure in office.

Daniels' proposal was based on recommendations from a government efficiency commission headed by former Gov. Joe Kernan and former Indiana Supreme Court Chief Justice Randall T. Shepard. But it quickly stalled in the legislature, where the opposition of the state's thousands of township officials was too much for lawmakers to overcome.

Since then no significant effort to eliminate or change the makeup of township government has come up at the Statehouse in recent years.

Now, only the state board of accounts monitors townships. And State Examiner Paul Joyce told The Star his office does not routinely audit township books.

"Nobody else has authority over townships other than the State Board of Accounts," Joyce said.

But staffing is so low right now, he added, "we're not even looking at trustees unless a problem comes up."

Joyce said the proposed new state budget does include funding to increase his staff, and he is hopeful lawmakers will OK the expenditure so it can expand audits.

Not all trustees handle Social Security funds for residents who need assistance, Joyce said.

"It's a unique program," he said, that is more common in larger, urban communities.

"You don't see it as much in the smaller, rural areas."

In most instances, Joyce said, the trustee is assigned by a court to handle the Social Security benefits and bills of elderly, poor or disabled residents in the townships. The trustee receives the person's monthly check and pays their bills and other expenses.

"They have nobody else," he explained, "to watch over that money or do that for them."

When the state board does audit townships, Joyce said examiners look at the handling of Social Security funds. The SSA also conducts routine audits of the funds. That is how the alleged theft in Center Township came to light.

The theft of Social Security funds for elderly and disabled victims "is as egregious as it comes," Joyce said. "This is probably all the money these people have. They tend to be the poorest of the poor."

Joyce said the state board was involved in the Center Township investigation, working closely with the U.S. attorney and FBI.

"If people are doing this," he said, "they need to know that they will get caught."

Joyce added he is constantly amazed at what some people will do for money.

"Stealing is bad under any circumstance," he said, "but people take it to another level when they take money from the poor and elderly."

Call Star reporter Jill Disis at (317) 444-6137. Follow her on Twitter: @jdisis.