Public Safety

Former office manager will plead guilty in 13-year embezzlement scheme at Iowa City Area Development Group

Audit finds Sheri Jelinek used unauthorized credit card to pay bills, buy items from Home Shopping Network

Sheri Jelinek
Sheri Jelinek

A former office manager for the Iowa City Area Development Group intends to plead guilty to a scheme in which she is accused of embezzling more than a half-million dollars in regional economic funds for her personal spending on clothing, electronics and her son’s school lunches.

Sheri Jelinek was charged with seven counts of wire fraud Wednesday in U.S. District Court in Davenport and also signed a plea agreement. As part of the agreement, she will admit to embezzling at least $150,000 from 2003 through January 2017, when she resigned.

Jelinek faces up to 20 years in prison on each count, a maximum fine of $250,000 and likely victim restitution. The court could run the terms consecutively for a maximum sentence of 140 years, according to the plea.

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 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.

The charging documents show 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.

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, according to court documents. In December 2003, she began to make unauthorized personal purchases and continued until January 2017. She made over 10,000 unauthorized purchases.

Her purchases included school lunches for her child and insurance and registration for her and her family’s vehicles, court documents show. She also made purchases from Amazon, Sirius XM, and various grocery and convenience stores.

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

Examples of payments made show there were five a month in March 2013, but during months in 2014 and 2016, there were 18 and 19 payments a month, according to the plea. Without the multiple payments, the card would have been declined because it would have exceeded the credit limit.

Starting in July 2012, the total purchases within a single month increased to a maximum amount of $14,482, and payments within a single month ranged from $2,288 to $15,018, the plea shows. After August 2014, total monthly purchases increased significantly, averaging about $11,000 a month until Dec. 14, 2015.

After Jelinek’s arrest, Mark Nolte, president of the Iowa City Area Development Group, 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.

“We were incredibly saddened to discover this violation of our trust,” Nolte said in a separate statement, “but the organization is in solid financial shape and we hope our investors continue to recognize the work of the team as we engage every day to keep this area vibrant and growing.”

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

A plea hearing for Jelinek hasn’t been set at this time.

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