During a visit to Columbus Tuesday, State Auditor Shad White offered further information on his office’s investigation into former city Chief Financial Officer Milton Rawle’s embezzlement of city funds, suggesting the city could hire a forensic accountant to determine how much money was actually taken.
White’s office began investigating Rawle in 2019 after receiving a tip from a whistleblower, White told Columbus Rotarians at their weekly luncheon at Lion Hills Center. Investigators found numerous unauthorized transactions falsely labeled under “payroll” or “reimbursement.” Rawle was arrested in August 2020 for embezzling nearly $290,000 from city funds and later sentenced to 20 years in prison, owing the city $354,896.27.
White said his office proved Rawle stole $288,000. However, in both Fiscal Years 2017 and 2018, city budget deficits exceeded $800,000, leading investigators to believe there could be a gap in what money they proved was stolen and what money was actually stolen.
“Sometimes somebody will be at the center of a criminal enterprise and you can only prove a percentage of what they did,” White said. “($288,000) was all we were able to prove, and we have no evidence that the losses stretched into the millions.”
White said oftentimes during investigations his office cannot determine where funds have gone if, for instance, the suspect has spent some of the money or did not keep records of where it was deposited.
He said he believes a forensic auditor could possibly decipher the city’s books, something he would recommend the city look into.
“If you think the recovery could justify the expense of the forensic audit, then it’s not a bad idea,” White said.
A forensic auditor must be contracted through a municipality, not the state auditor’s office.
White told Rotarians Columbus’ case is the “kind of story” his office deals with weekly.
“It can be discouraging,” he said. “But the encouraging part is that we are putting a stop to those cases one by one, every single day, every single week.”
‘Standing up for the taxpayers’
White’s presentation covered more than just the investigation into Rawle’s embezzlement, giving insight on the job of the state auditor’s office and fraud that occurs throughout the state.
The auditor’s office only conducts routine audits for counties and school districts, while private entities typically conduct those for municipalities, White said. However, the office may conduct criminal investigations of municipalities if someone finds something suspicious, as happened in Columbus.
“Usually when we start a criminal investigation, the best criminal investigations that we are about to do begin with a whistleblower tip, somebody from the community who comes forward, and they say ‘I’ve seen some stuff that doesn’t quite make sense,’” White said. “We then start doing an investigation.”
Mississippi always ranks in the top 10 in the number of public corruption prosecutions per capita, White said, as the auditor’s office is dealing with approximately 100 to 115 criminal cases at any given time.
Since White took office in 2018, he said state authorities have created new state laws surrounding public funds. This past year he enforced a statute that said if someone steals more than $10,000 of taxpayer money, they are no longer eligible for pretrial diversion, a program he called “slapping someone on the wrist” if they have committed a crime.
The state office is currently doing an audit on COVID-19 relief funds. Due to false information and people abusing unemployment assistance, he said, Mississippi could potentially be missing hundreds of thousands of dollars just from this past year.
“The next time we have a recession, we as a country better have a plan in place to make sure the money isn’t stolen in the first place,” White said.
When the office conducts a criminal investigation, White said he is committed to recovering lost money whether that be from bank accounts or liquidating assets, but oftentimes, the offender has already spent the money.
For example, he said a man in Tunica County took advantage of the county’s casino revenue. Instead of implementing a house-repairment program, which he was hired to do, he kept nearly 80 percent of the funds for himself.
“I look back on a case like that, and I think this is a story of a tragedy in a community because that money could have done a lot for those people there,” White said. “Almost none of it went to help those folks. Not only that, but my suspicion is that that money is not sitting in a bank account somewhere waiting for us to seize it back.”
While stories like this may be disheartening, White said he is “standing up for the taxpayers” and dedicated to stopping fraud.
“We have work to do,” White said. “I think the state has work to do. I don’t know if I would describe (the fraud) as rampant, but I do think that we are not on the good end of the rankings, and I think it’s going to take a lot of work to get there.”
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