SAAA cites fraud, concealed information in Cockrell's dismissal
By Joe Beck -- firstname.lastname@example.org
FRONT ROYAL -- Documents filed in Warren County Circuit Court and released by a state agency place the former top executive of the Shenandoah Area Agency on Aging at the center of investigations into fraud, embezzlement, financial mismanagement and excessive spending.
The agency, through its attorneys, William E. Shmidheiser III and Andrew S. Baugher of Lenhart Obenshain law firm in Harrisonburg, states that its board of directors dismissed Helen Cockrell because they had "learned that she had embezzled from and defrauded (the agency) and had concealed pertinent information from the SAAA board of directors."
The accusations are contained in an answer and counterclaim filed by Shmidheiser and Baugher in a lawsuit Cockrell initiated in a challenge to the grounds for her dismissal as the agency's executive director.
The filing by the agency on aging demands $20,000 from Cockrell for damages sustained "as a result of the plaintiff's embezzlement/conversion and fraud," or an unspecified sum to be determined in a trial. The agency also demands punitive damages of $50,000 for attorneys fees, plus other expenses.
The filing also accuses Cockrell of improperly taking between $10,000 and $20,000 for her "personal expenses and expenses that were not related to the legitimate business of (the agency)."
The agency is continuing its investigation into Cockrell's spending of its money "and the amount of ... funds improperly used by Cockrell could be greater than that described above," the document states.
Robert J. Zelnick, an attorney with the law firm of Szabo, Zelnick & Erickson in Woodbridge is representing Cockrell. A telephone message left for him was not returned.
The amounts of money cited in the agency's court filings are similar to those contained in an investigation by the Virginia Department for the Aging into Cockrell's role in managing the agency's finances. The report was released Friday by John Hudson, chairman of the agency's board of directors.
The agency's five-page review, conducted in late August and early September, states that it found several instances "of what appears to be fraud" totaling $12,231. The report cites two fraudulent bills that were paid from two checks using a $200,000 line of credit from Virginia Savings Bank.
"Furthermore, both checks were obtained by Ms. Cockrell," the report states.
The Department for the Aging investigation spanned fiscal years 2010 and 2011. As of Oct. 31, 2011, the agency's projected expenses came to $865,247, of which $300,000 was owed on what the Department for the Aging described as two "maxed out lines of credit."
The state agency cited the area agency on aging's chief financial officer as the source of the expense figures.
The Department for the Aging report also noted what it described as concerns in a staff memo over excessive travel expenses and general spending by Cockrell and Ann McIntyre, then the agency's director of development.
"This concern appears to be legitimate," the report said.
Examples cited included a $231 dinner for four at a conference in Chicago and a $79 breakfast for three after Cockrell "instructed the staff to reduce travel in order to save money." It was only one of numerous trips taken by staff in the past two years, the report said.
The report also said expense reports filed by Cockrell and McIntyre for other expenses "include vague descriptions for the purpose of the purchases."
In summarizing its findings, the Department for the Aging describes the area agency on aging as "in serious financial trouble. The board should immediately hire a CPA firm to perform a fraud audit to determine the extent of the situation and initiate criminal proceedings if required. While the audit is being conducted, the board members need to address the immediate financial situation and determine how the bills will be paid and how or if core services will be provided."
Shortly after the state's investigation, the area agency on aging dismissed Cockrell, McIntyre and Jim Shaffer, the agency's finance director.
In a letter dated Sept. 9 informing Cockrell of the board's unanimous decision to dismiss her, Hudson told her its members "no longer have confidence in your ability to provide effective management to the organization based on initial findings of the Virginia Department (for the) Aging."
Shortly afterward, the agency hired Winchester accounting firm Yount Hyde & Barbour. The firm's assignment includes determining what, if any, illegal actions were committed and by whom. The investigation is continuing.
In a brief written statement accompanying the release of the Department for the Aging report, Hudson said the area agency on aging's board "remains committed to be prudent stewards of the agency's resources to ensure it can continue to serve the older citizens of the Shenandoah Valley by continuing its work with the auditor to improve internal controls and working closely with the county and city governments and local agencies."
In an email message, Hudson said he would have no further comment.
A phone message seeking comments from Shmidheiser or Baugher was not returned.
Cockrell's lawsuit against the agency contends that her employment contract did not allow her to be dismissed except on three grounds, none of which applies to the reasons cited by Hudson and the board. She was paid $100,000 a year, according to the contract, and is seeking $150,000 in damages, citing breach of contract.
McIntyre has also filed a suit against the agency claiming actions by its leadership defamed her in the aftermath of her dismissal. As evidence, she cites newspaper stories in The Northern Virginia Daily and The Winchester Star that identify agency officials as sources for their information.
McIntrye's suit says she was dismissed for violating credit card policies and not for other reasons that the articles "strongly suggest."