Former Cleveland City Clerk Faces Embezzlement Charge

Editor's note: We previously reported Virginia Masters had turned herself in, but as of Tuesday at noon, a warrant for her arrest was still outstanding according to the Pawnee County jail.

CLEVELAND, Oklahoma -- A former City of Cleveland employee accused of embezzlement is still being sought by authorities Tuesday.

Retired city clerk Virginia Masters is facing one count of felony embezzlement after a 6-month investigation by the Oklahoma State Bureau of Investigation.

An affidavit released Monday alleges Masters pocketed close to $90,000 from Cleveland's utility funds to fund personal loans.

The affidavit says an audit found that $89.447.62 which should have been deposited in the utility fund from July 1, 2009 through September 30, 2011 had not been deposited.  Masters is charged with embezzling the money.

According to the OSBI, Masters and other city employees -- including the current City Clerk Tama Cole, City Manager Elzie Smith and Assistant City Clerks Sherri Herring and Mona Greenwood -- would borrow cash from the utility fund collected each day.

The affidavit alleges employees would use money from the petty cash box in Masters' office to cash their personal checks.  City attorney Brian Drummond says that practice has been stopped so that if employees want to cash a check they have to go to the bank. 

The affidavit says Masters allowed her son and daughter in-law to borrow cash from the utility fund.  Masters' daughter-in-law works for the Department of Corrections in Hominy.

OSBI investigators say Masters would use a method of "overlapping" the daily deposits by taking cash from the next day's deposit to cover what others borrowed the previous day.

According to the affidavit, Masters told investigators she borrowed $6,957.00 from the utility fund with the intent of paying it back. 

A felony warrant has also been issued for Cole's arrest, according to court documents.

An affidavit says Cole told an OSBI Special Agent that she borrowed between $2,000 and $5,000 from city funds.

Cole would borrow money from city funds to pay her bills and would place a personal check in the petty cash box, but when she repaid the funds with cash, she would rip up her check, according to the affidavit.

City Manager Smith, who is alleged to have borrowed money from the utility fund, said in a statement given to The Cleveland American last week:

"Safeguarding public funds is a top priority of the City of Cleveland, and we take this duty very seriously. When some irregularities surfaced in our last audit, the City immediately contacted the proper authorities. The City has fully and completely cooperated in the investigation of this matter."

"When the results of that investigation are revealed to the City, if any problems with the way the City handles public funds are discovered, they will be immediately corrected."

The City will not comment further, because the City does not want to hinder or interfere with the investigation.

Masters worked for the City of Cleveland for 36 years, before she retired last November. If convicted, she could be sentenced to up to 10 years at the state penitentiary. Cole faces up to two years in prison.

At this time, Masters and Cole are the only ones who are facing charges.

This isn't the first time an embezzlement scandal has hit the City of Cleveland. According to the American's archives, less than 20 years ago, former assistant clerk Vickie Whittenburg was charged with embezzlement, but she received a deferred sentence and no jail time after repaying the money to the city.