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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of Missouri

FOR IMMEDIATE RELEASE
Tuesday, July 31, 2018

Former Jasper School District Employee Sentenced for $145,000 Embezzlement Scheme

SPRINGFIELD, Mo. – A former employee of the Jasper R-5 School District was sentenced in federal court today for embezzling more than $145,000 from the district.

Karla Justice, also known as Karla Jessee, 56, of Columbus, Kan., was sentenced by U.S. District Judge M. Douglas Harpool to two years and six months in federal prison without parole. The court also ordered Justice to pay $145,726 in restitution.

On Feb. 7, 2018, Justice pleaded guilty to one count of wire fraud and one count of credit card fraud. Justice admitted that she embezzled a total of $145,726 from the school district over a three-year period from September 2013 to September 2016. Her criminal conduct involved hundreds of individual acts of fraud and embezzlement against the school district.

According to court documents, Justice’s fraudulent scheme not only bled the school district of essential resources, her actions aggravated the financial distress of the district as well. Justice’s fraud and embezzlement had grown to the point that the school district’s reserve account was all but entirely drained, while teaching positions were eliminated, salaries were capped and cut, programs were eliminated or reduced, and children were denied essential educational resources. The school district cut its weekly school calendar to four days, placed all support staff on part-time status, and eliminated their healthcare benefits.

Justice was employed as the head bookkeeper, payroll secretary, superintendent secretary, and board secretary for the Jasper R-5 School District from 2009 until her resignation on Sept. 22, 2016. Justice’s positions with the school district gave her unrestricted access to the account and payroll systems for the school district, as well as the district’s petty cash checkbook and signatory authority for this account. Justice essentially had unlimited access to every aspect of the account and human resources functions for the district. 

Justice admitted that she paid herself $80,858 in additional payroll above and beyond the amount allowed under her employment contract. As a result of the fraudulently received payroll, Justice also received an additional $6,731 in employer retirement contributions and $6,530 in Social Security and Medicare contributions that she would not have received otherwise.

The investigation also discovered numerous transactions involving the petty cash account, including checks and E-checks that totaled $13,929 in transactions that were conducted by Justice to pay for personal expenses that were unrelated to the activities of the district, and were not authorized by the district.

Justice also opened and used a Home Depot credit card in the name of the district, without authority or the approval of any district official. Justice used the fraudulently opened Home Depot credit card to conduct several personal purchases between Jan. 6 and Sept. 1, 2016, totaling $2,133.

The investigation revealed numerous checks that had been written on the operating account for the district. Justice did not have authority to write checks to this account but she did have access to the signature stamps for school officials, who did have signatory authority over this account. Several district employees informed investigators that Justice repeatedly asked them to cash checks for her. School officials told investigators that each of the checks discovered during the investigation were fraudulently created and Justice’s request that other employees cash these checks and give her the money was done to bypass safety measures created to prevent employees from directly cashing checks made out to themselves.

According to court documents, school officials began analyzing the district’s budget when the district experienced financial difficulties. During this analysis, officials noted irregularities in payroll payments, unexplained credit card payments, and missing monies from the petty cash account. When asked to reconcile the irregularities, Justice immediately wrote out a letter of resignation.
 
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the U.S. Secret Service and the Jasper County, Mo., Sheriff’s Department.
 

Topic(s): 
Financial Fraud
Updated July 31, 2018