June 4, 2014
Department of Justice
United States Attorney William C. Killian Eastern District of Tennessee
Kathy Winters Pleads Guilty To Embezzlement From Alcoa City Schools
KNOXVILLE, Tenn. – On May 19, 2014, a one-count information was filed in U.S. District Court in Knoxville, charging Kathy Ann Winters, 58, of Harriman, Tenn., with wilfully and knowingly embezzling more than $1,000 from the U.S. Department of Education. On June 4, 2014, Winters appeared in U.S. District Court and pleaded guilty to the charges in the information. Sentencing has been set for 1:30 p.m., Oct. 7, 2014.
According to a plea agreement on file with the U.S. District Court, Winters was the federal projects administrative assistant for Alcoa City School District, and treasurer of both the East Tennessee Attendance Supervisors Association (ETASA) and Tennessee Attendance Supervisors Steering Committee (TASSC). While serving in these roles, investigators determined that Winters took funds belonging to the three entities by creating false invoices that demanded payment payable to TASSC or ETASA, forging an approving official’s signature to the false invoices, and forwarding the forged, false invoices to the City of Alcoa for payment. Once the City of Alcoa rendered check payments based on the false invoices, Winters endorsed the checks, and either deposited the funds into her personal account or into the TASSC or ETASA account and then withdrew the money through ATM withdraws and checks made payable to herself.
In addition to the invoice scheme, Winters misused Alcoa City School District credit cards by making unauthorized personal charges on the credit cards and falsified travel reimbursement requests for unauthorized travel. In both instances, Winters forged signatures of approving officials, and submitted the credit card billing statements and travel claims to the City of Alcoa for payment. Winters also caused various bank charges, including overdraft fees, ATM fees, and service charges to be assessed against TASSC and ETASA. The investigation revealed a total loss of $428,076.94, between the three entities. The investigation revealed further that the Alcoa City School District loss included federal government grant money paid to the school district for special education expenses.
On Apr. 4, 2013, during a consensual and voluntary interview, Winters admitted to the fraud and provided a written statement to investigators.
Investigative agencies involved in this investigation include the Tennessee Comptroller’s Office, Financial and Compliance Unit and Tennessee Bureau of Investigation. Assistant United States Attorneys Brooklyn Sawyers and Steve Cook are representing the United States.