Thomas Smith, the former town treasurer in Little Wolf, was charged Thursday with embezzlement and felony misconduct in office.
The 57-year-old Smith is accused of stealing property taxes that were paid to the town in cash, perhaps since 2000.
If convicted of embezzlement, Smith faces up to 10 years in prison.
According to the criminal complaint, Little Wolf Town Clerk Jackie Beyer told investigators she became suspicious because the town’s financial reports had not balanced over the last few years.
Beyer said about 1 percent of the town’s property owners pay their taxes with cash rather than with checks.
At a town board meeting in January 2014, Beyer asked Smith if he had received any cash tax payments because she could not find them in the records.
At that time, Smith assured Beyer that the cash payments were there. She said she trusted him because he had been in office for such a long time.
In January 2015, Beyer met with a bank employee who showed her how to access more detailed information about the town’s accounts. She then went home and reviewed detailed information about the town’s deposits.
Also in January, Beyer spoke with Waupaca County Treasurer Clyde Tellock, and he emailed her a list of the town’s taxpayers and what they paid.
Beyer’s examination of the town’s bank records found that all the tax-payment checks were received and accounted for, but not the cash payments.
On Feb. 10, the Little Wolf Town Board held a closed-session meeting where Beyer and Town Chairman Alan Moede confronted Smith about the missing cash. Details of that meeting were disclosed in the criminal complaint.
Beyer asked Smith if he had any of the cash at home since in the past he had placed payments in his safe until they could be deposited in the bank. Smith said he did.
Moede then told Smith to go home that night, get the money from his safe, and return it while the board waited.
Smith reportedly said he did not have the money at his house but that it was in an account in New London.
When asked how that could be since the town does not have any accounts in New London, Smith said the account was in his name.
“I’m really sorry,” Smith said, according to the criminal complaint. He then said he would pay back the money.
The following day. Smith deposited $3,000 in the town’s Manawa bank account. He then went to Beyer’s home and resigned.
On Feb. 18, Detectives John Mocadlo and Julie Thobaben questioned Smith. They reported that he said he “borrowed” the cash and had been doing it a long time.
Smith told detectives that three to five people pay their property taxes with cash each year. He allegedly kept the cash but recorded the taxes as paid. He deposited the tax-payment checks in the town’s account, then wrote out a check from the town’s account to pay the county, thereby shorting the town’s account the amount that had been paid in cash, according to investigators.
Smith told detectives that he estimated the town received $8,700 in cash payments during the most recent tax season.
Smith began taking the cash in 2000 because that was the year he suffered a heart attack and began having financial problems, the complaint says. He also used the money to pay for personal bills, health insurance and medications.