Public Safety

Former state employee with county water districts convicted of embezzling more than $400,000

She faces up to 20 years in federal prison

CEDAR RAPIDS — A former assistant with the Black Hawk and Bremer water conservation districts pleaded guilty Friday in federal court to embezzling more than $400,000 and using the money for vacation cruises, online shopping and home repairs, court documents show.

Leslie Carey, formerly known as Leslie Grundy, who had worked as a state employee for both county soil and water conservation districts since July 2007, pleaded to one count of wire fraud.

A state audit was conducted in 2018 after officials with the Iowa Department of Agriculture and Land Stewardship had concerns over the use of funds.

The districts use the public funds to conduct surveys, investigations, research on soil erosion and sediment damage and other control measures and comprehensive plans to conserve natural resources.

Carey was placed on paid administrative leave Dec. 1, 2017, and resigned Dec. 12, 2017, according to the audit report.

Carey was responsible for the districts’ receipts, disbursements, payroll, bank accounts and reporting, according to court documents.

She would collect and post accounting records, make bank deposits, sign checks, prepare and distribute payroll and reconcile monthly banking statements.

The Black Hawk district maintained six checking and six savings accounts at a credit union, documents show. The district also had two certificates of deposit.

The Bremer County district had two checking and two savings accounts and three certificates of deposit.

Carey, starting in June 2010 and continuing until December 2017, used and misappropriated about $181,913 in cash withdrawals; $42,150 in credit card purchases; $63,346 in debit card purchases; $4,574 in Walmart purchases; and $3,869 in unauthorized disbursements from the districts, according to a plea agreement.

She also transferred funds from Bremer to Black Hawk, creating a further loss of $89,550 in transactions designed to conceal her fraud; $4,076 for vendors; $26,169 for IPERS; and $14,372 for Internal Revenue Service payments.

The total loss to both county districts was at least $430,020, according to the plea.

Carey was able to conceal her fraud for so many years by falsifying minutes, treasurer reports and copies of bank statements.

For example, she falsified minutes dated Jan. 5, 2017, and provided minutes to the First National Bank stating one person was no longer on the board and she should be the sole signer to conduct transactions on the account.

The plea also shows Carey falsified a monthly treasurer’s report.

Carey was able to conceal her scheme by transferring funds among the water districts’ accounts, altering statements and submitting false reports to the commissioners of both districts.

Carey agreed to pay at least $430,020 in restitution to victims, including the county districts, as part of the plea.

She faces up to 20 years in federal prison and the restitution.

U.S. Magistrate Judge Mark Roberts released Carey on a recognizance bond pending sentencing, which will be set after a presentencing report is completed.

Comments: (319) 398-8318; trish.mehaffey@thegazette.com

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