News and Press Releases

Marshfield Man Sentenced for Embezzlement

FOR IMMEDIATE RELEASE
September 6, 2011

Madison, Wis. - John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced that Timothy Kraus, 48, Marshfield, Wis., was sentenced today by U.S. District Judge Barbara B. Crabb to three months in prison for embezzling and misappropriating money belonging to the Marshfield Community Development Authority (MCDA) while Kraus was the Executive Director of the MCDA. Kraus pleaded guilty to this charge on June 8, 2011.

In May 2008, Kraus became the Executive Director of the MCDA. In this position, Kraus was responsible to the Board of Commissioners of the Community Development Authority. Between October 2007 and September 2009, the MCDA received federal program funding in excess of $1.6 million from the U.S. Department of Housing and Urban Development. The evidence showed that shortly after becoming the Executive Director, beginning in July 2008 through June 2009, Kraus embezzled just under $10,000 from the MCDA.

Kraus gave himself an unauthorized pay raise, opened a bank account and gas credit card without the approval of the MCDA board, and changed the number of signatures necessary to approve expenditures from two to one, making himself the sole authority in MCDA financial matters. Kraus told investigators that he felt that he deserved the 30% pay raise he gave himself even though the board rejected that request and authorized a 2% pay raise instead. Kraus also indicated that he opened the bank account without the board's knowledge or approval because Kraus needed access to an account to pay agency bills without board oversight. Kraus also made approximately $2,200 in unauthorized gas purchases for his personal vehicle, and misapplied approximately $1,800 raised by residents of an MCDA-owned and operated apartment complex.

In sentencing Kraus, Judge Crabb observed that it seemed that Kraus put the appearance of being seen in the community as a "giver," above providing that same community honest and trustworthy service. Judge Crabb indicated that although the amount of money Kraus actually took was small, his actions were a serious violation of trust and warranted a custodial punishment, and not simply probation as his attorney requested. Kraus will serve a one-year term of supervised release following the completion of his prison sentence and was ordered to pay restitution to the MCDA in the amount of $9,921.47.

The charges against Timothy Kraus were the result of an investigation conducted by the Marshfield Police Department and U.S. Department of Housing and Urban Development, Office of Inspector General. The prosecution of the case has been handled by Assistant U.S. Attorney Laura A. Przybylinski Finn.

 

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