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Due Pleads Guilty to $793,000 Theft from Covington, Could Spend Less Than 3 Years in Prison

Bob Due did not live a lavish lifestyle during his fourteen year career as finance director for the City of Covington. He was not known for flashy suits, a nice car, or a sprawling home.

Day to day, he appeared to be a man who lived within the means of his roughly $80,000 annual salary.

But until last August, no one knew that he had pocketed what would eventually be determined to be an additional $793,000 over the period of a dozen years, sneaking into City Hall after hours and manipulating the city's check-writing system and depositing taxpayer money into his own personal accounts.

He performed this act sixty-eight times, enriching himself at the expense of the city.

On Thursday morning, Bob Due turned sixty-four years old and accepted responsibility for his lengthy criminal enterprise, one that ended only when he got sloppy, not once, but twice, and was ultimately uncovered by members of his own staff in the finance department.

Due pleaded guilty before Judge Gregory Bartlett in Kenton County Circuit Court to one count of abuse of the public trust in excess of $100,000, one count of unlawful access to a computer, one count of theft by unlawful taking, and twelve counts of criminal possession of a forged instrument.

Had he gone to trial, Due would have faced forty years in prison. Instead, he reached a deal with the Kenton County Commonwealth's Attorney Office in which a fifteen year sentence would be exchanged for a guilty plea.

Due's attorney, Tim Schneider on Thursday requested a separate sentencing hearing on April 17, in which he will argue for the recommended sentence to be reduced to ten years.

The law would allow Due to be released from prison possibly after serving twenty percent of whichever sentence he receives. That means he could be put away for as little as two years. With time served in the Kenton County Detention Center, where Due has been held since September, his time in prison could be even less than that.

"He's sick to his stomach over what he's done," Schneider said of his client, who, Schneider claims, often had to be held back from taking responsibility before his attorney could complete his due diligence in the case. "He's a wonderful man who has done a bad thing."

"He loves the City of Covington."

Due was hired as the city's finance director in 1999 and three years later began stealing from it. Weeks after his August 23 arrest, State Auditor Adam Edelen launched an examination into Covington's financial procedures and Due's then-alleged embezzlement. Edelen's office discovered that the illegal taking of funds began in 2002 and continued each year, right up until days before his arrest.

Due's scheme involved coming into the city building after everyone else had left. He had created two fake vendor names. To write a check, he would enter payment information using one of those two fake names or one of three legitimate city vendors and then change the vendor's name to his own or his wife's or his aunt's or to a vendor that he controlled. He would print the checks, delete the checks' history from the printer to avoid detection, change the name in the system back to the original vendor and then deposit the money into his personal account or one that he controlled.

But one day last August a fraudulent check was left on the printer. A finance department employee discovered it and did not recognize the name to whom the check was written. She reported the check to a co-worker who also didn't recognize it and recommended that she take the check to Due.

Due, according to Commonwealth's Attorney Rob Sanders, characterized the check as no big deal, called it a mis-print, and said he would take care of it.

The name on the check was Due's wife who still uses her maiden name.

Then, a second fraudulent check was discovered by the employee. It had the same name on it but the vendor number was different. This time, the check was brought to the attention of City Solicitor Frank Warnock and City Manager Larry Klein, and this time suspicion started to surround Due.

By the end of that Friday workday, August 23, Due was in cuffs, sitting in a cell at the Kenton County Detention Center.

The news rocked City Hall where Due was among the most trusted of public servants, known as a straight-shooter always armed with numbers to back up his presentations at city commission meetings, a commander on the front lines of intense budget negotiations with the city's unions that resulted in the elimination of positions, concessions on health care contributions, and a reorganization of departments.

Now those same union employees are left scratching their heads after being told about the severity of the city's near-bankruptcy status in 2011 by a man who all the while had been pocketing hundreds of thousands of dollars.

Due's arrest also shocked the city administration that had relied on his counsel and his numbers. City Manager Larry Klein has recently emerged as a target for possible removal from his job after the auditor's report argued that Due had unfettered control over the city's money. Klein survived a recent employment scare when city commissioners agreed to implement a performance review plan instead of terminating him as three commissioners had apparently come close to doing. 

More fallout from the arrest included Due's attempts to take his own life while on home incarceration, once by the use of carbon monoxide poisoning from a running car that he sat in inside the garage attached to his modest Independence home and a second time through multiple self-inflicted wounds from a knife found in his kitchen.

All the while the city was scrambling to restore the public's trust. The administration cooperated fully with Edelen's examination and are in the process of constructing and executing the city's response to the findings, some of which has already been completed. Lawsuits were filed against Due, his family, banks, auditing firms, and others, as an effort to recoup as much of the theft as possible.

As part of Due's plea agreement on Thursday, he will be forced to pay restitution but that amount will be determined by whatever funds the city receives through its insurance or through litigation. Kentucky law does not allow for double collection. Due would only be responsible for paying back whatever the city does not get through other means.

Some of the cash that Due pocketed is still unaccounted for, Sanders said. The prosecutor and former Covington city commissioner said that their investigation uncovered large cash withdrawals from ATMs all over Northern Kentucky but Due never documented what all the money was spent on. Due denied any gambling or drug problems, Sanders said.

He did use some for an older family member in his care and also paid for two children to attend the private University of Dayton but did not account for the rest. Schneider, his attorney, chalked that up to bad memory.

Schneider also called Due "a pillar of the community" aside from this one transgression. That is the argument Schneider plans to make on April 17 when Due returns to face Judge Bartlett at sentencing.

On Thursday, Due appeared in the courtroom dressed in the pink jumpsuit assigned to residents of the Kenton County Detention Center. His only words were answers to the judge's questions. He answered "guilty" to all fifteen counts and explained that he was not under the influence, that he was not pressured to change his original plea of "not guilty", and that he had full faith in his attorney.

He also referenced, when asked by the judge, that he obtained a bachelor's degree from Thomas More College and a master's degree from Xavier University where his concentration was on finance.

"I take it from your vast education that you have had no difficulty in reading these documents?," Bartlett asked Due, holding up a pile of papers that outlined the charges and details of the plea agreement.

At the conclusion of the hearing, Due was escorted out of the courtroom by a sheriff's deputy to spend the rest of his birthday at the Kenton County Detention Center.

Written by Michael Monks, editor & publisher of The River City News

Photo by RCN