Former University Employee Pleads Guilty to $716,000 Fraud Scheme
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former University of Missouri employee pleaded guilty in federal court today to embezzling more than $716,000 from the school over a nine-year period.
Carla Rathmann, 54, of Mount Vernon, Mo., waived her right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to one count of mail fraud and one count of credit card fraud.
Rathmann admitted that she embezzled a total of $716,665, primarily by submitting fake and fraudulent invoices and bills to the University of Missouri. Rathman also admitted that she illegally used a university credit card for approximately $146,144 in personal expenses.
“The University of Missouri detected the embezzlement and worked closely with law enforcement to investigate,” Dickinson said. “The university’s cooperation was instrumental in determining the full scope of the fraud scheme.”
Rathman was hired by the University of Missouri as an administrative officer at the Southwest Research Center, located in Mount Vernon, in January 2000. Her responsibilities included receiving bills, paying bills, various accounting duties, payroll, scheduling meetings and organizing staff at the Southwest Research Center. According to today’s plea agreement, Rathmann was fired from her position in September 2015 after officials discovered that she had used her university credit card, also known as a “p-card,” to pay for personal expenses.
In 2005, Rathmann created and registered three shell companies with the Missouri Secretary of State’s Office. Rathmann admitted that these companies – R&R, R&R Argi and Garrett Farm and Oil – did not produce a single product or provide a service of any type. Either Rathmann or her husband were the owners and registered agents for these companies.
From Jan. 24, 2005, to June 18, 2014, Rathmann issued bills or invoices in the names of these shell companies to the University of Missouri for products or services ostensibly provided to the Southwest Research Center. In reality, none of these companies provided a single item or a service to the Southwest Research Center. The invoices or bills submitted by Rathmann to the University of Missouri for payment were entirely false and fraudulent.
On numerous occasions, Rathmann, in her capacity as an administrative employee for the University of Missouri at the Southwest Research Center, approved the fraudulent invoices and bills. After she approved the payments, the University of Missouri wrote checks to Rathmann’s fictitious companies, which were deposited into her bank account.
The University of Missouri paid Rathmann $570,521 for the products and services that in fact were never delivered or provided.
Shortly after she was hired, Rathmann was given a credit card to facilitate the purchasing of goods and services needed for the Southwest Research Center. Rathmann fraudulently used the credit card to make unauthorized personal purchases (i.e., her dog’s surgery, remodeling her home, dental expenses, propane for her home, gas for her vehicle and herbicide for her home).
The first unauthorized use of the credit card occurred on Feb. 19, 2002, when Rathmann’s credit card was used to pay Bolivar Insulation in the amount of $1,249. The last unauthorized use of the credit card was on Aug. 20, 2015, when Rathmann’s credit card was used to pay an invoice from Ozark Mountain Pest Control in the amount of $30. In between these purchases were numerous other personal purchases she made using the credit card that totaled approximately $146,144.
By pleading guilty today, Rathmann agreed to forfeit to the government a $716,665 money judgment, which represents the proceeds derived from the fraud scheme.
Under federal statutes, Rathmann is subject to a sentence of up to 30 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI and the Missouri State Highway Patrol.