Four city HR staff arrested, charged in fraud investigation **Updated 2 p.m.***

Four city HR staff arrested, charged in fraud investigation **Updated 2 p.m.***-attachment0

The Asheville Police Department issued a release this morning announcing the first charges in the alleged fraud by several employees of the city of Asheville Human Resources Department. These include the director and assistant director of the department, who the city has no announced “are no longer employed.”

The department’s Director Lisa Roth and Assistant Director Robin Nix, along with staffers Liz Oldre and Laura Masters, all face charges related to the investigation into fraud involving the city’s flexible-spending benefits program.

Roth faces a felony obstruction of justice charge along with a misdemeanor related to making false statements. Nix faces three counts of obtaining property under false pretenses. Masters was charged with five counts of forgery and six of obtaining property under false pretenses. Oldre faces one count of obtaining property under false pretenses. According to search warrants, employees participating in the fraud were over-reimbursed — or paid up-front — from city coffers for items they purchased under their flexible-spending accounts. In some cases the items included mattresses and hot tubs, while the spending accounts are meant to reimburse employees for direct health-care expenses like co-pays and prescription drugs.

“This news will be extremely difficult for our organization and its workforce, particularly because the allegations are in no way reflective of our core values and commitment to the community,” City Manager Gary Jackson said in a memo. “As public servants, we must hold ourselves to the highest ethical standards. Any breach of those standards is simply unacceptable.”

The memo also specifies that Roth and Nix are no longer employed by the city. Last week, Assistant City Manager Jeff Richardson took over the running of the HR Department.

All the staffers except Masters, who’s currently held on a $110,000 bond, were released after their arrest on a written promise to appear in court.

See below for the full text of Jackson’s memo and the APD’s statement.

David Forbes, staff writer and Jon Elliston, managing editor

________________

MEMORANDUM

Date: March 30, 2010

To: Mayor and City Council
All City Employees

From: Gary W. Jackson, City Manager

Subject: Administrative announcement – Human Resources Department

Over the last four months, the Asheville Police Department, in cooperation with other law enforcement agencies, has investigated alleged fraudulent activity In the city’s Human Resources department. Earlier today, charges were filed against four people as a result of the investigation.

This news will be extremely difficult for our organization and its workforce, particularly because the allegations are in no way reflective of our core values and commitment to the community. As public servants, we must hold ourselves to the highest ethical standards. Any breach of those standards is simply unacceptable.

When questionable practices were identified in Human Resources in December 2009, I immediately turned the information over to the appropriate law enforcement agencies to launch an investigation. We took this matter most seriously and have expected nothing less than full cooperation with the Asheville Police Department, the District Attorney’s Office and other agencies as the investigation moved forward.

As of today, the human resources director and human resources assistant director are no longer employed by the city. Assistant City Manager Jeff Richardson will continue to manage the human resources department while we recruit and hire new leadership for the department over the next three to six months. I am confident that Mr. Richardson’s background in human resources will provide the direction and expertise we need during this time. This will include securing a third-party contractor to manage the Healthcare Flexible Savings Account Program. This move should assure the public that the appropriate policies and regulations will be followed.

Building trust in local government can only be formed through the collective behaviors of an organization’s individual members and leaders over time. We have hundreds of employees who serve the public with honesty and integrity, and we should all be reminded of the high standard of personal conduct that is expected and demonstrated everyday. That’s why I am also charging every department director with reviewing our ethics policy and raising awareness with all employees.

We will take every necessary step to ensure the management of our Human Resources Department is guided by good judgment, solid ethics and sound management principles. With the leadership and support of our employees, I am confident we will come out of this as a stronger organization with better controls in place and renewed community trust in every city function.

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Suspects charged in city HR fraud case

ASHEVILLE – Asheville police detectives have today filed charges against four people in cases involving fraud at the city’s Human Resources Department.
Detectives carried out the investigation over the past four months in conjunction with the Buncombe County District Attorney’s Office. Both agencies have received assistance from the State Bureau of Investigation.
Initial charges are listed. Additional charges may be brought at the May Grand Jury.

• Elizabeth Oldre, birth date 11/29/1959, of Leicester
• 1 Felony Count of Obtaining Property by False Pretenses

• Robin Nix, birth date 2/23/1961, of Weaverville
• 3 Felony Counts of Obtaining Property by False Pretenses

• Laura Masters, birth date 4/26/1970, of Leicester
• 5 Felony Counts of Forgery
• 6 Felony Counts of Obtaining Property by False Pretenses

• Lisa Roth, birth date 9/4/1964, of Tuckasgee
• 1 Felony Count of Obstruction of Justice      
• 1 Misdemeanor Count of False Statement to the Retirement System

Ms. Oldre, Ms. Nix and Ms. Roth were released on a written promise to appear in court. Ms. Masters was given a $110,000 secured bond.
The first court date for all four suspects is tomorrow morning at 9:30 a.m. in District Court 2.
To preserve the integrity of the case and of the judicial process, Asheville police will not make any further comment at this time.

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2 thoughts on “Four city HR staff arrested, charged in fraud investigation **Updated 2 p.m.***

  1. JusticeWatcher

    Seems like the Ryan Baldwin story isn’t the only
    case of public corruption in Buncombe County.
    I wonder if “GOOGLE” knows what they are
    getting into ?

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