The Auditor of State’s office released the special report on the Village of Mount Sterling Tuesday morning, detailing a two-year investigation into the village’s finances. The special audit orders 11 individuals, including the village’s former mayor, to repay a combined total of $998,050 — $871,545 of which is tied directly to former village administrator Joe Johnson.
“This report marks the final chapter of one of the most deplorable and devastating cases of local government corruption in recent memory,” Auditor Dave Yost said in a message released by his office. “Hopefully taxpayers can find some solace in the knowledge that those responsible are answering for their crimes and will never again have a chance to ransack the community.”
Auditor of State Assistant Legal Counsel Robert F. Smith served as special prosecutor.
Johnson’s facts and figures
According to the audit, Johnson took the $800,000-plus through a variety of means between getting hired as village administrator in January 2012 to his resignation in early 2016. The majority of the money came from Johnson paying himself $368,682 in excess of his approved salary over four years. He also charged $228,420 to his village-issued credit card to buy himself items such as vehicles, electronics, snow plows, trailers, a camper, a tractor and automotive equipment.
The credit card also paid for a four-day vacation at the Westin Resort in Cape Coral, Florida during 2014. Johnson’s theft lead to an indictment on 30 counts in July 2017, which landed him a 10-year prison sentence. The large sum of money, according to Yost, is the prime contributor to the village being in fiscal emergency.
An additional $17,129 was charged through the use of village fuel cards.
Johnson was able to manipulate the payroll system through legislation that made the village administrator and mayor responsible for village finances. Through that manipulation, Johnson increased his $28 per hour starting rate to nearly $50 without approval by council.
Former mayor, administration and employees
Another major figure in the case was former village mayor Charlie Neff. He was convicted of theft in office, falsification and dereliction of duty in August 2017. According to the audit, Neff is accountable for $1,611 in improper payments to himself and others, and jointly liable for another $64,551. In December, he was sentenced to 30 days in jail, three years of probation and ordered to pay nearly $10,000 in restitution.
Two of the village’s former fiscal officers, Vicki Sheets and Lana Cydrus, were also named in the special audit as being responsible for disbursements without proper documentation. Cydrus was responsible for three disbursements totaling $1,732 and an additional $200 in unauthorized food and gas purchases. The auditor is requiring Cydrus to pay back $1,953 in total.
Sheets plead guilty to the falsification of Johnson’s resignation date in March 2017 which allowed him to collect his pension earlier than expected. According to the audit, she is being ordered to pay back $44,899 in funds.
Bonnie Liff, Neff’s utility clerk and administrative assistant at the time, was named as one of seven employees who owe a combined $76,733 for accepting improper leave payouts. Of that amount, $44,887 went directly to Liff who eventually plead guilty to theft in office.
The seven employees who accepted the payouts were Bonnie Liff, Brett Towler, Chris Beaver, Chris Ladley, David Cline, Madison Newsome and Ronnie Vansickle. The village also paid the seven employees $30,838 in bonuses but, according to the audit, they appeared to be properly authorized.
Move Ohio Forward Grant
Another factor in the declaration of the village’s fiscal emergency was the $185,825 Move Ohio Forward grant reimbursement, used in the demolition of 16 condemned properties in Madison County. Since the emergency, the village has paid back a portion of the funds and at the end of 2017, the village’s Cash Summary by Fund showed the deficit closer to $40,000.
According to the audit, details about the reimbursement from the grant, which was administered by Johnson in accordance with the Ohio Attorney General’s office, appeared to be done properly.
On Nov. 1, the State Auditor’s office held an exit conference with the village council explaining the details of the investigation.
Council had five days to respond and did so on Nov. 8, allowing the changes to be reflected in the finished special report.
A copy of the full audit can be found on the State Auditor’s website.
Reach Michael Williamson at 740-852-1616, ext. 1619.