Wake County officials say about $2.3 million went missing from the Wake County Register of Deeds office between 2008 and 2017, according to a new insurance claim.
The official account of the amount believed missing—$2.333,591.30—puts an exclamation point on the ongoing Wake County scandal involving the apparent embezzlement of wads of cash, on a near-daily basis, for nearly a decade.
In part of the 266-page document dated August 24, director of internal audit John Stephenson lays out the year-by-year trail of missing revenue for county manager Jim Hartmann and county attorney Scott Warren. An investigation showed amounts in six figures missing for nine straight years—$124,911.04 in 2008, the earliest year for which records remain, and a peak of $326,743.31 in 2012.
"Based on our review of revenue transactions and deposits for the period May 30, 2008 through March 31, 2017, we determined that revenues recorded in the Register of Deeds subsidiary systems exceed cash deposited by the Register of Deeds office by approximately $2.3 million," Stephenson wrote.
The "proof of loss" statement signed by Hartmann is designed to tell the insurance company “how the lost was caused, when the loss occurred,” and other details of the claim. A Wake County investigation and subsequent SBI probe have found that the register's office, under the direction of former Register Laura Riddick, failed to keep accurate records and handled cash loosely for many years.
Riddick, initially elected to the office in 1996, retired in March, during the same period with Hartmann and Wake County District Attorney Lorrin Freeman announced that the SBI would investigate the missing money. The officials attributed Riddick's departure to poor health, not the missing funds.
Riddick has not been available for comment since her retirement.
Warren sent the proof-of-loss account to a Travelers Casualty and Surety Co. office in Charlotte. A two-page narrative that's included says the discovery of the losses began with a move to automate the office's monthly reports. The goal was to track numbers of documents as well as the amount of money received by the office.
But office staff soon noticed substantial amounts of missing cash were going undetected.
"January 25, 2017, the deposit was over by $4.65 and Riddick was not in the office that day," the narrative reads. "On January 26, 2017, Riddick was back in the office and the deposit was $700 short. January 27, 2017, Riddick was in the office and the cash count was $780.00 short."
These discoveries started a train of events that led to internal audits, the announcement of the state investigation, and to one employee's departure.
"One employee, by the name of Tray Ellis, confessed to the theft of $50,000," the narrative says.
The county is undergoing an outside audit by the accounting firm Elliot Davis, to be submitted to the county on Friday, officials say. Meanwhile, the criminal probe continues.
Also part of the submissions is a series of recommendations made by the county and designed to clean up the accounting practices in the Register of Deeds office.
The bulk of the document is taken up by descriptions of years of audits conducted by outside and internal auditors of county government. County officials also answer a number of questions that are apparently part of the insurance company's form for such claims.
"Did the internal audit department perform any reviews involving the area in which the embezzlement occurred?" one question reads in part.
The county response: "Beginning in December of 2014, Internal Audit performed a series of ten cash receipt reviews across the county, although none within the Register of Deeds office."