Official Charged With Embezzling To Pay Nigerian Scammers - InformationWeek

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1/24/2007
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Official Charged With Embezzling To Pay Nigerian Scammers

Michigan's AG claims a former county treasurer siphoned off $1.2 million from county coffers, some of which went overseas to fraudsters.

The former treasurer for Michigan's Alcona County has been arrested and charged with allegedly embezzling $1.2 million in public funds, some of which he sent to Nigerian-style "419" e-mail scammers.

Thomas Katona, 56, was arraigned in district court last week on 10 felony counts, including embezzlement and forgery, and could face a maximum sentence of 104 years in prison.

According to Michigan Attorney General Mike Cox, Katona directed eight unauthorized wire transfers of county monies, totaling $186,500, while he was visiting London in late 2006. Six of those transfers were to overseas banks known to have connections with Nigerian fraudsters.

The so-called "419" con, named after the relevant section of the Nigerian penal code because many of the scams originate in that West African country, often starts with an e-mail claiming that the sender has come into a large sum of money. The fraudster needs help in laundering or obtaining the funds, however, and promises the recipient a piece of the action for his or her help, which may include cash payments as evidence of good faith or to speed up the process.

An investigation revealed that Katona had also wired $72,500 of his own money in June to the same accounts. He was repeatedly warned by bank officials that they suspected he was wiring money to accounts linked to the Nigerian scam. Katona ignored these repeated warnings, said Cox.

A December audit of the Alcona County records showed a shortfall of $1.23 million, about 30% of the county's $4 million annual budget. The embezzled monies came out of county investment funds and a revolving tax account, the Alcona County Review, the county's weekly newspaper, reported Wednesday.

"Public officials who violate their oath will be held accountable by my office," Cox said in a statement. "The citizens of Michigan should rest assured that public officials who mishandle public monies will be prosecuted to the fullest extent of the law."

Katona, who served as county treasurer from 1993 until his dismissal in November, remains in custody and faces a preliminary hearing Jan. 31.

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