Treasurer used city funds to pay bills and fund travel, Minnesota auditor says

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A former clerk/treasurer from two southeastern Minnesota towns has been jailed and ordered to pay thousands of dollars in restitution after embezzling public funds, using them to pay bills and travel.

Minnesota State Auditor Julie Blaha on Wednesday released a public report on his office’s investigations of Lolitta Melander, who served as clerk/treasurer in the towns of Canton and Whalan.

Melander pleaded guilty to embezzlement and larceny, and on March 7 was sentenced to 120 days in jail, up to 10 years supervised probation and ordered to pay $79,554 in restitution – 69,916 $ to Canton and $9,638 to Whalan, a new release said. She was also ordered to perform 50 hours of community service.

According to court documents, Melander used city funds for things like travel, credit card payments, taxes and personal medical bills.

The Office of the State Auditor (OSA) has opened an investigation after receiving a report from the city of Canton about possible misuse of municipal funds. The OSA, as part of its investigation in 2019, found that there were $134,639 in “abusive payments” to Melander, who was the former city clerk/treasurer, according to the report.

The OSA shared its investigation with the Fillmore County Sheriff’s Office and the Fillmore County District Attorney’s Office in October 2019. Melander was later charged with 26 counts, including 15 counts of theft, five counts of embezzlement of public funds, five counts of concealment of stolen property. and one count of a public officer felony permitting false statements against the government.

Melander had misappropriated funds through payroll and employee reimbursement transactions dating back to 2011, when “suspicious expenses increased,” according to court documents. Municipal checks were issued for things like personal medical bills, funeral expenses, auto repairs, trips to Montana and South Dakota, personal care items, personal credit card balances, and personal taxes .

Then the OSA received an audit request from the town of Whalan regarding the town checks addressed to Melander, who was the former clerk/treasurer. The bureau uncovered $13,770 in illegal payments to or on behalf of Melander, leading her to be charged in March 2021 with 15 counts of theft, three counts of embezzlement of public funds and five counts of receiving stolen goods. stolen goods.

Court documents said Melander, who was responsible for issuing her own paychecks from the town of Whalan, was routinely paid for monthly wages before the relevant pay period.

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