Covington City Finance Director Suspended Over Alleged Misappropriation of Funds

UPDATE: Due is in the Kenton County Dentention Center on $50,000 bond. He is charged with theft by unlawful taking (over $10,000), unlawful access to a computer (first degree), official misconduct (first degree), criminal possession of a forged instrument (second degree). He is expected to appear in court at 8:30 a.m. on Monday.

Kenton County Commonwealth's Attorney Rob Sanders says that Due faces twenty years in prison if convicted on all charges. 

ORIGINAL POST:

The City of Covington's finance director, Bob Due, is suspended without pay, accused of misappropriating $300,000 in city funds.

The city administration was informed Thursday evening that there were alleged significant improprieties related to the use of city funds discovered by city staff.

The discoveries involved irregularities in the processing of checks and funds. Due's access to city bank accounts, funds, records, and computers has been suspended and secured.
 
The alleged improprieties date back to 2010.
 
"We believe that there is a probability the public trust has been broken," said City Manager Larry Klein. Since late (Thursday) when we were first advised of this problem we have taken clear and immediate steps to secure the city's financial resources and to restore that trust."
 
"We ar every concerned as serious allegations have been leveled against a co-worker that we trusted but we have to remember that a person is presumed innocent until proven guilty," said City Solicitor and Assistant City Manager Frank Warnock. "We have to let the investigation run its course."
 
The River City News contacted City Hall just before 4 p.m. to inquire about a tip from a source that indicated police activity in the finance department. City officials declined to comment at that time and requested that no information be released.
 
The River City News has since learned that at around that time Due was likely being interrogated at Covington Police headquarters, an interrogation that also included the Kenton County Commonwealth's Attorney Office.
 
Due has not yet been charged with a crime.
 
The City Commission was then told late Friday afternoon about the situation just before a press conference was called to address the media.
 
City Manager Klein met with city staff to emphasize that city business is to proceed without interruption. Klein emailed city staff after the press conference, a copy of which was obtained by The River City News.
 
"It is with regret that I inform you about alleged improper activities that have occurred here at City Hall," Klein wrote. "Bob Due, Finance Director, has been suspended pending an investigation of alleged misappropriation of City Funds. I want you to know a few things.  First, the acknowledgement of potential wrong doing was identified internally.  We continue to have dedicated staff that are loyal to this City and conscious of the high responsibility that comes with being accountable for tax payer dollars. 
 
"Second, while this is an upsetting event, like everything else, we will overcome it.  Our team is strong and has proven that together we can weather these storms.  Please keep your head up.  Despite this event there still remain many great things that are happening in the City. And you are all a big part of the reason why. "
 
Warnock said that the misappropriations range from $8,000-$10,000 each.
 
The City of Covington's annual audit is scheduled to begin soon.
 
Due and Klein have worked closely on the City of Covington's plan to reinvest significant money in infrastructure as part of the newly passed 2013-14 budget and the five-year community reinvestment plan.
 
Due, 63, started with the City of Covington in January 1999 and his current salary is $100,090. He is a native of Covington, a graduate of Covington Latin School, and holds an MBA from Xavier University. Prior to taking the job with Covington, Due was financial director at the Talbert House in Cincinnati for fifteen years.
 
In addition to the Covington Police and the Kenton County Commonwealth's Attorney Office, Klein and Warnock have met with the Kenton County Sheriff's Office and outside law enforcement agencies.
 
A news release from Covington City Hall indicates that the administration does not believe that any other city employee is involved. The release also said that the City will take whatever steps are necessary to secure and recoup the missing funds.
 
The City's Accounting and Operations Director Jerome Heist has been appointed interim director of finance, pending formal approval by the city commission.
 
A special city commission meeting is planned for Tuesday at 6 p.m. in which the property tax rate, as presented by Due last Tuesday, was to be considered.
 
Written by Michael Monks, editor & publisher of The River City News

Photo: Bob Due/Kenton Co. Detention Center