BETHANY - The Brooke County Prosecutor's Office is expected to file charges within the next week against a former Bethany College employee who admitted to embezzling more than half a million dollars from an office where students and staff cashed checks.
Shelly Lough of West Liberty managed the college cashier's office, where students and staff cashed payroll and personal checks at a cash window. Brooke County Prosecutor Joe Barki did not elaborate on how Lough allegedly embezzled the money, but said more information will be available when charges are formally filed within the next week.
Lough is one of three people being targeted by investigators. Barki said authorities also are investigating two local Ohio residents. He declined to name the other suspects, or say exactly where they live in Ohio, but noted they are not tied to the college.
According to a statement released Tuesday afternoon by Bethany President Scott Miller, "Investigators quickly determined that the systematic thefts from the cash window were linked to ongoing criminal activity in Ohio and authorities there have now acted to seize some assets."
As far as how the other two suspects are tied to Lough and the alleged embezzlement, Barki only said the Ohio residents are "suspected of being involved in a criminal enterprise that reaches into Brooke County." He also noted his office has worked with multiple law enforcement agencies during the ongoing investigation.
William J. Ihlenfeld II, United States Attorney for the Northern District of West Virginia, declined to comment on the case.
The college discovered the missing cash in late May during an external audit. They suspected Lough, who had worked there for about seven years and moved her to another position in the finance department. She continued to work, but did not have access to cash or financial accounts, said Bethany Vice President Sven de Jong.
She confessed to embezzling the funds in an interview with the school's legal counsel and outside accountants about two months after the money was noticed to be missing, according to de Jong. Her employment immediately was terminated and the case was referred to Barki's office.
When asked if Lough confessed to the crime, Barki said she, "made statements consistent with what she told" Bethany.
The college also fired Director of Finance Daniel Pajak, who had worked in the school's financial offices for approximately 15 years, for lack of oversight. Pajak is not suspected of any crimes.
"It is apparent that the theft was possible because of ineffective oversight of certain financial controls relating to the cash window," Miller said.
He added no student or employee funds were impacted, and the college expects to recover the majority of the loss through criminal prosecution and insurance. It will not have a material impact on the finances of the college, nor will it adversely impact school operations, he said.
De Jong said $1.7 million flowed through the cashier's office last fiscal year of July 1, 2012, to June 30. He did not know the amount of cash that was kept there on a typical day.
The college has used the cash window since the 1960s as a remedy for the lack of banks near campus, de Jong said. It since has been closed and replaced with banking services provided through WesBanco.
Students and staff now are encouraged to use direct deposit services. The school also added a second ATM to the one that has been on campus for about 20 years.