On Tuesday, the grand jury returned indictments on high-ranking managers or people with the power to order. They include Vern Hatley, the head of the school system's transportation department; Carol Finch, a budget analyst in the transportation department; Bobby Browder, a regional manager for Barnes; Connie Capps, a manager at Barnes; and Harold Estes, Capps' boyfriend.
All five face charges of conspiracy and obtaining property by false pretenses.
The indictments indicate that between June 2003 and June 2004, thousands of fake orders went back and forth between the school system and the parts supplier. In that time period alone, investigators discovered that $3.8 million was diverted in funds. They believe that most of the funds went toward personal purchases, such as vacation homes, vehicles, big screen televisions and golf carts.
The indictments indicate that some of the money was also diverted for transportation department supplies, such as office furniture and computers, though they do not say how much.
"We're seeking what I believe are very serious charges against all these people," Willoughby said.
Willoughby also said that the investigation could only focus on a specific amount of time so the amount of fraud may never be known.
"I think there is fraud that's not covered in this indictment," he said. "At some point, we have to use the (State Bureau of Investigation's) limited resources and figure out the most significant amount of theft."
For the past year, the suspects indicted, as well as others, have turned over money and merchandise owed to the school system. In all, eight people are believed to be involved in the suspected fraud scheme, investigators say -- six from the transportation department and two from Barnes. All the suspects involved were either fired or resigned in the past year.
Capps turned over nearly $200,000 in big-ticket items like scooters, golf carts and camper homes. Finch recently turned over a truck, sport utility vehichle, camper home, boat, golf carts, televisions and computers -- all auctioned off last weekend for a total of $98,000.
Barnes returned $1.3 million last year saying the money was a pre-payment for future payments. Barnes' attorney, Steve Smith, said the parts company is cooperating and working with the school system.
The Wake County School system says it has been aggressive in its efforts to get money and merchandise back and with new accounting changes.
"Anybody who thinks they're going to defraud us needs to think twice," said Michael Evans a spokesman for Wake County Public School System. "We will search them out, go public and pursue it to the furthest extent of the law," says Evans.
Only Finch has been arrested. She was picked up in July after investigators said she was still out spending school system money. The others may have a chance to turn themselves into authorities. Indictments for others involved may also follow in the next week.
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