Public Safety

Former office manager sentenced to over 2 years for embezzling funds from Iowa City Area Development Group

She also must pay over $466,000 in restitution to the development group

Sheri Jelinek
Sheri Jelinek

DAVENPORT — A former office manager of the Iowa City Area Development Group who embezzled nearly a half-million dollars in regional economic funds was sentenced Friday to 27 months in federal prison.

Sheri Lynn Jelinek, 48, of North Liberty, pleaded last November in U.S. District Court of the Southern District of Iowa to seven counts of wire fraud.

As part of the plea agreement, she admitted to embezzling at least $150,000 from 2003 through January 2017, when she resigned.

Court documents show Jelinek spent the stolen funds on clothing, electronics, her son’s school lunches and other personal shopping items.

A special investigation conducted by the Iowa Auditor’s Office, which covered Dec. 12, 2003, through March 14, 2017, identified $466,874.73 of improper disbursements by Jelinek. The investigation also found an additional $46,903.26 in unsupported disbursements.

In the report, Auditor Rob Sand said the improper disbursements — which totaled more than 10,000 — included personal credit card transactions to businesses, including Allstate Insurance, Verizon, Mediacom, DirecTV and Hulu. Jelinek also made personal purchases through the Home Shopping Network and Walmart, the investigation found.

Jelinek’s duties at the Iowa City Area Development Group included handling all receipts and disbursements, receiving and reconciling bank account statements and preparing and maintaining monthly financial reports, according to court documents.

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In November 2002, Jelinek, without authorization, opened a credit card account under Iowa City Area Development Group with herself as the sole signer of the credit card, court documents showed.

In December 2003, she began to make unauthorized personal purchases and continued until January 2017.

Jelinek had all the statements for this card sent to her personal email to conceal her theft, according to court documents.

The credit limit for the card started out at $1,000 in 2004 but gradually increased to $2,500 in 2012, the plea agreement showed.

Jelinek was able to make purchases that exceeded the credit limit by making multiple payments with Iowa City Area Development Group funds.

Examples showed she made five payments in March 2013, but increased that to 18 and 19 monthly payments during months in 2014 and 2016, according to the plea agreement.

Starting in July 2012, the total purchases within a single month increased to a maximum of $14,482, and payments within a single month ranged from $2,288 to $15,018, the plea showed.

After August 2014, total monthly purchases increased significantly, averaging about $11,000 a month until Dec. 14, 2015.

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After Jelinek’s arrest, Mark Nolte, president of the development group at the time, said the organization undergoes annual financial reviews and full audits every four to five years.

“Unfortunately, those providers did not find this issue,” he said last year.

The Gazette is among the Iowa City Area Development Group’s investors.

U.S. District Chief Judge John Jarvey, during sentencing, also ordered Jelinek to pay restitution of $466,875 to the development group and its insurance company.

Jelinek will have to serve three years of supervised release following prison and pay $700 to the Crime Victims’ Fund.

This case was investigated by the Office of Auditor for the State of Iowa and Iowa Division of Criminal Investigation and prosecuted by the U.S. Attorney’s Office for the Southern District of Iowa.

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

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