Bulk of Record-Setting Year from Comptroller’s Fraud Hotline Involved Just Two Cases

Of the more than $1.1 million in government-funded waste, fraud and abuse reported through the Tennessee Comptroller’s anonymous tipster hotline last fiscal year, more than 85 percent of that “record achievement” came from just two cases.

One in Benton County and the other in Marion County, they involved more than $960,000 in alleged fleecing of public funds.

The smaller of the two involved nearly a quarter of a million stolen taxpayer dollars from the South Pittsburg Housing Authority and the South Pittsburg Elderly Housing Authority.

According to a “special investigation” report published by the Comptroller’s office last July, “various employees misappropriated at least $228,980” between 2009 and 2014. The report noted that while the two Marion County housing authority programs were “separate legal entities,” they shared the same office space and staff.

“The amount of theft in this case is alarming,” Comptroller Justin P. Wilson said in a press release at the time. “While it’s easy to blame the criminal behavior of two individuals, housing authority officials must also take the necessary steps to shore up a number of issues which allowed these thefts to occur.”

In the other case, about $733,000 in “unauthorized administrative disbursements” was uncovered subsequent to investigators probing a Benton County nonprofit that was raking in government money through the Tennessee Department of Human Services.

The Comptroller’s office issued a report in March alleging that managers and employees of ABC Nutrition Program in Camden — a food-for-needy-children program run from a home basement by a woman and her two adult daughters — improperly collected compensation and bonuses to the tune of more than $606,000.

Another $127,000 or so was obtained by ABC Nutrition to pay for “unauthorized construction and improvement disbursements” for the woman’s home, as well as “additional unauthorized administrative disbursements.”

The state Department of Human Services OK’d all the suspect spending, the Tennessean noted in a lengthy story on the case back in July.

Participants in the operations in both South Pittsburg and Camden are facing criminal charges.

“Since its inception (in 1983), the hotline has received over 21,000 notifications, including 951 notifications between July 1, 2014, and June 30, 2015,” according to an information sheet provided to TNReport by the state Comptroller’s office. “The hotline received 779 telephone calls and 172 submissions through the online reporting website. Of the 951 total notifications, 486 concerned substantive allegations of fraud, waste, or abuse.”