State releases final audit on Mount Sterling investigation

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(Posted Jan. 24, 2018)

The office of Ohio Auditor Dave Yost released a special audit on Jan. 23 that details almost $1 million in illegal spending that occurred in the village of Mount Sterling. The audit caps off a two-year investigation that brought criminal charges against four now-convicted former administrators and employees.

In early 2016, Madison County law enforcement officials alerted Yost’s office to an alleged theft involving village property. In the months that followed, state auditors and investigators uncovered extensive corruption dating back to 2012 that revolved around Joseph Johnson, former Mount Sterling village administrator.

“This report marks the final chapter of one of the most deplorable and devastating cases of local government corruption in recent memory,” Yost said. “Hopefully, taxpayers can find some solace in the knowledge that those responsible are answering for their crimes and will never again have a chance to ransack the community.”

In total, the special audit orders 11 individuals, including the village’s former mayor, to repay a combined $998,050. More than 87 percent ($871,545) of the amount is tied directly to Johnson, who used his position of authority and village funds to purchase high-priced personal items. Over the course of four years, he also paid himself $368,682 in excess of his approved salary.

Records show that Johnson charged $228,420 to his village-issued credit card to buy himself vehicles, electronics, snow plows, trailers, a camper, a tractor and automotive equipment. He also used the credit card to pay for a four-day vacation at the Westin Resort in Cape Coral, Fla., in 2014, where he upgraded his room upon arrival.

Investigators learned that Johnson racked up another $16,083 in charges on the village’s fleet fuel cards for ethanol fuel, used in high-performance vehicles. None of the village’s vehicles used this type of fuel. Johnson charged an additional $1,046 to the cards for out-of-state travel during his vacations.

Johnson, who is serving a 10-year prison sentence, was indicted on 30 counts in July 2017. Under a plea agreement, he pleaded guilty to seven felonies: one count of engaging in a pattern of corrupt activity and two counts each of theft in office, money laundering and tampering with records. Yost cited Johnson’s crimes as a major factor contributing to the village’s fiscal emergency, which was declared in June.

The special audit also led to charges against former mayor, Charles Neff, who in August 2017 was convicted of theft in office, falsification and dereliction of duty. The audit holds Neff accountable for $1,611 in improper payments to himself and others, and jointly liable for another $64,551. He was sentenced in December to 30 days in jail, three years of probation and ordered to pay nearly $10,000 in restitution.

Neff’s administrative assistant and utility clerk, Bonnie Liff, is named as one of seven employees who owe a combined $76,733 for accepting improper leave payouts. Liff, who was paid $44,887 of that amount, pleaded guilty in July to a count of theft in office.

The audit holds former fiscal officer, Victoria Sheets, responsible for $44,899 in improper or unsupported expenses that included a team golf registration, gift cards and political signs. She pleaded guilty to falsification in March for doctoring the date on a document that allowed Johnson to obtain his state pension benefits early, before investigators could freeze the account.

Robert F. Smith, assistant legal counsel for the state auditor, served as special prosecutor in all four cases.

A full copy of the special audit report is available at https://ohioauditor.gov/. Click “Search Audits” under the “Audits” tab, then select Madison County.

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