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Audit: Ex-employee stole $1.3 million from city

Tuesday, October 6, 2020 by Jo Clifton

Randall Whited, a former employee of Austin Public Library, stole at least $1.3 million from the city by purchasing printer toner with a city credit card and reselling it online, according to an investigation released by the Office of the City Auditor Monday.

The audit also alleges that Whited misused his city credit card by purchasing electronics and home goods for himself. A Travis County grand jury indicted Whited for first-degree felony theft following an Austin Police Department investigation that stemmed from work done by the city auditor. The theft of more than $200,000 in an aggregated amount is enhanced because Whited was a public servant and had two previous theft convictions, according to the indictment.

Records from the Hays County Sheriff’s Department show that Whited, 53, was booked into jail on a felony theft charge on Sept. 22 and released the following day on bond. Whited’s attorney did not respond to a request for comment. The indictment says Whited could face additional time in prison if convicted because of previous convictions for theft, one in 1993 and one in 1989.

Brian Molloy, chief of investigations for the auditor’s office, told the Austin Monitor, “This the largest case our office has investigated involving fraud and abuse.” Although the case appears to be “a huge outlier as far as size goes,” auditors were concerned that other city employees might be misusing their purchasing authority. But after running tests on city credit card records, Molloy said, “No one was purchasing in any of the ways that matched Randall’s MO.”

However, he said the scheme is not that unusual. The cities of Las Vegas and Philadelphia have faced losses from similar thefts, he said, with Las Vegas losing $6.7 million in toner and ink and Philadelphia losing over $1 million. Molloy pointed out that the item is easy to steal because it can fit in a backpack and most cities “don’t take a very strong inventory.”

Auditors received an allegation in March 2019 that convinced them of the need to investigate Whited. By July, they had enough information to alert Roosevelt Weeks, director of libraries, of their initial findings.

At that time, Whited was placed on administrative leave from his job as an accounting associate at APL. The following month, he resigned rather than being fired over what the audit calls an “unrelated issue.” Whited had worked for the library system for 11 years before an anonymous informant told auditors they should investigate whether he was stealing toner from the city and reselling it. Auditors have a photograph from a security camera showing Whited apparently carrying boxes of printer toner from his office to the library’s parking garage at 6:47 a.m. on July 9, 2019. Auditors also found a photo from the parking garage security camera showing Whited placing toner boxes in the trunk of his car.

According to the audit, “Badge swipe records spanning roughly six months in 2019 show Whited arriving 30 minutes before 8 a.m., his scheduled start time, on approximately half the days he worked, including many days when Whited arrived before 7 a.m. This was despite receiving instruction from his supervisor to arrive no more than 30 minutes early because there was insufficient supervision during those early hours.”

Library staff told auditors that Whited claimed he regularly delivered items to library branches. But when auditors asked staff at those branches, “almost all confirmed that they had very little toner on hand, and several had not received any deliveries in months.” Also, the library department has other staff members who are responsible for delivering items to the various branches.

Auditors found a spreadsheet on Whited’s computer containing shipping information to an online toner reseller. “The spreadsheet indicated that over the course of just four days in October 2017, Whited sent 60 packages to the toner reseller. The toner reseller confirmed they received shipments from Whited in the past, but did not provide payment records to our office as requested. As a result, we cannot determine how much Whited profited from the sales,” they wrote.

Whited also used his city credit cards to buy at least $15,000 worth of electronics, such as video games, robotic vacuums and a drone from a retailer. This included “more than $3,500 worth of items that were shipped directly to his home address,” which is in Kyle, or to a nearby pickup locker. Auditors said Whited paid retailers more than $140,000 for what appear to be personal purchases, but they were unable to determine the precise amount of fraudulent sales because of the library’s “poor inventory practices” and “inadequate purchasing records.”

Auditors were critical of three supervisors at APL who approved Whited’s purchases, despite what auditors called “multiple examples of inadequate records.” In several instances, Whited altered receipts to hide the fact that he had shipped items to his home. But in other instances, the receipts showed Whited’s home as the shipping address and used Whited’s personal email address. “In every case, APL management approved these purchases,” according to the audit.

“When interviewed, both Whited’s supervisor, Monica McClure, and former financial manager Victoria Rieger said Whited told them itemized receipts – or receipts in general – were not available for some of his purchases, including toner purchased through the city’s office supply vendor and electronics bought from a major retailer. McClure and Rieger said they did not follow up to determine if this was true, but Rieger said that, in hindsight, she ‘should have’ followed up.”

According to the memo from Weeks, McClure resigned from the city in August 2020. Rieger left APL in July 2018 to accept a position with Austin Resource Recovery.

As auditors noted, “APL management did not perform detailed reviews of Whited’s credit card purchases. They also did not review in detail the budget overages related to those purchases, which led to the waste of city resources.” When auditors spoke to McClure, they said in one instance she approved a transaction for $1,545 from an electronics retailer “that did not contain any information indicating what was purchased and that showed Whited’s home address as the shipping address.” Auditors found an itemized receipt for this transaction from the retailer’s website. They said that showed Whited “purchased multiple virtual reality headsets and a drone, among other items.”

In addition to HP toner cartridges, the indictment against Whited charges theft of a lengthy list of items, including an Apple TV, Rokinon lens, Aiphone intercom, VuPoint scanner, Linksys router, Sony cameras, an Epson printer, and numerous other items.

According to Weeks, after hearing from auditors in 2019, the library department “began taking immediate steps internally to address systemic deficiencies.” Weeks says the library department has separated out the duties of purchasing and receiving supplies. In addition, library management “reduced the number of credit cards issued to staff and eliminated the use of contract cards for office supplies to minimize unnecessary risk through high-volume transactions.”

Photo made available through a Creative Commons license.

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