De Soto resident Angela Huskey, 51, the former business manager for the Grandview R-2 School District, pleaded guilty June 30 to the federal charge of mail fraud in connection with the embezzlement of at least $1.6 million from the Grandview R-2 School District.
Huskey faces a possible five-year prison sentence, according to federal sentencing guidelines and will have to make restitution for the money she stole. She will be sentenced Oct. 13.
The case against Huskey dates back to October 2016 when she was put on leave and subsequently fired by the school board on Dec. 21. An FBI investigation into financial irregularities in the district began soon after.
Huskey, a 1984 Grandview R-2 graduate, had been an employee of the district since 1996. She was made the administrative assistant in 2002 and business manager in 2009, and also served as secretary and treasurer of the school board.
Court documents say she began defrauding the school district and its employees as early as July 30, 2006, and continued the scheme over the next 10 years.
R-2 Superintendent Matt Zoph said in an email the school board will hold a meeting soon to discuss the fraud with district residents.
A date had not been set as of June 30.
“I’m happy we will finally be able to provide some well-deserved answers to our community,” he said.
Huskey used several means to embezzle the money, according to the documents.
■ She made payments to herself and then made false entries into Grandview’s financial records “to make it appear that the payments were made to a legitimate vendor.”
■ She made payments to herself and entered them into the district’s books as payments to employees. Those inflated salaries were then reported on employees’ W-2 forms, causing at least 18 Grandview employees to cumulatively pay at least $13,368.28 in income taxes they did not owe.
■ She made payments to vendors for goods and services that she personally purchased for herself.
■ She made payments to various banks to pay her own debts.
Huskey was arrested June 30 and appeared before U.S. District Judge Rodney W. Sippel that morning. She pleaded guilty to mail fraud and is out on bond, said Assistant U.S. Attorney Richard Finneran, who is handling the case.
Huskey could be charged with mail fraud because she mailed an IRS W-2 form that falsely overstated an employee’s income.
Finneran said Huskey is cooperating with federal authorities to reimburse the school district.
“She is already selling various properties she owns,” he said.
Reimbursement funds will go to the court, which after a forfeiture process will transfer the money to the school district.
Finneran said Huskey will be required to pay back $1.6 million.
According to court documents, Huskey has already paid $199,500 and has relinquished a condominium in Kimberling City.
Zoph said the district has insurance to cover the loss and a claim is being processed.
In April, Zoph said the school district had begun a comprehensive review of policies, practices and financial records, with the help of auditors and lawyers, to make sure everything will be done properly going forward.
“We are working diligently to correct our procedures so that something like this never happens again,” Zoph said.
He said June 30 he did not know why the embezzlement was not caught in the district’s annual audits.
Zoph said audits were conducted by Croghan & Croghan, P.C., from 2004 through 2010 and Schowalter & Jabouri, P.C., from July 2010 through June 2016.
The school board authorized a special audit on Oct. 20, 2016, that eventually cost about $80,000.
Kathy Bellew of Dittmer, who formerly served on the Grandview R-2 school board for nine years and later was a school district employee for a decade, said she knew Huskey well.
“I think it’s shocking,” Bellew said. “At the same time, if you give (someone) too much power and don’t have checks and balances, things can happen. People used to say she ran the school.
“I’m glad they finally did discover the embezzlement and did something,” she said.
Bellew said she hopes school officials are open with residents.
“The school board all along said they would have a community meeting on this. I think that would go a long way because there’s so much rumor going around,” Bellew said.
She said she hopes Huskey’s guilty plea and an end to the case will help the district heal.