Hermantown Police Investigate Possible Fraud With Member Of Parent Teacher Organization

The possible fraud case involves funds meant for students in Hermantown.

HERMANTOWN, Minn. — The Hermantown Police Department is investigating a possible fraud case.

The claim coming from the President of a non-profit school fundraising group, and it’s against a group member.

The Parent Teacher Organization, or PTO, raises money for Hermantown Elementary teachers and their students. Now, police are investigating allegations that thousands of those funds may have been taken by one of the groups own members.

The Hermantown Police Department was approached by the PTO President on September 22. The President said that funds were missing from the PTO bank account and not just pocket-change. She told police over $43,000 had been stolen.

A written statement from Hermantown PD says in part:

The reporting party stated that there were 369 individual thefts and overdrafts over the past three years. The 42-year-old suspect had written 31 checks to herself with a total value of 43 thousand… six hundred and thirty eight dollars… and 50 cents. An additional 59 thousand was stolen in the form of debit card purchases and cash withdrawals.

And while the PTO is not directly affiliated with Hermantown Elementary, it does work closely with the school, according to Superintendent Wayne Whitwam.

Whitwam provided us a written statement that reads in part:

The school district is aware of allegations of embezzlement within the elementary PTO. We are cooperating with law enforcement. And as police are investigating… we can’t share any details.

As for the PTO group, things are on pause for now. Whitwam says all fundraising activities are on hold and the PTO has frozen the bank account in question until the investigation concludes.

Hermantown Police say they went to the suspect’s home a few days after the report was filed and asked her to provide a statement. Police say the woman said that she wanted to speak with her lawyer.

The incident is still under investigation. Whitwam says the school will provide updates as the case moves forward and when they’re legally allowed to do so.

The PTO President told the Hermantown PD, that she along with three other group members discovered the missing funds while sifting through past account statements. The president said they went on to separate the valid purchases from the theft and overdrafts caused by the theft.

Later on Tuesday, the President of Hermantown PTO released a letter being sent to parents and staff. The full letter is below.

Dear parents and HES staff,

As the fifth term Parent Teacher Organization (PTO) President for Hermantown Schools, I would like to address the devastating alleged “theft” that has recently come to light regarding our organization. I became aware of a problem when some of our checks bounced, and I stopped at the bank for statements. That same afternoon as soon as the issue came into focus, I stopped at the Hermantown Police station to start a case and report a suspected crime. From there, the principal and superintendent were notified. In the following week, our new incoming treasurer, our school co-chair (VP), and I spent hours upon hours going over a mountain of paperwork to hand over to the police, and now it is in their hands to handle the ongoing investigation.
Many of you, just as we the PTO Board did, are asking, “How could this happen?”
All of the PTO board and committee members are volunteers. We as a board took the reigns from the outgoing board in 2018, following the same procedures that had worked in the past. Even though every board member has a full-time job and a family, we donate countless hours of our free time to our designated duties, and we do it because we want to make a difference in our community.

Many of us have lost sleep and have shed tears of anger over the betrayal that we all feel very deeply. Not only has this incident left us with no money to function with, but all of the programs (anti-bullying efforts, staff appreciation, the backpack program, etc.), the student scholarships, and the teachers’ supplies that we are no longer able to provide negatively impacts the school, the teachers, our children, and the whole community. We are all victims.

Your next question is likely, “What are you going to do to make sure this doesn’t happen again?”
A great leader will steer the ship through a storm, which is what I am committed to doing. I will not run from this challenge, and with the help and support from you as parents, from the school staff, and from the community that has supported us so generously, the board and I will rebuild. The current board has all stepped up with extra time, effort, and determination to ensure that we can move past this incident. New checks and balances that will safeguard the organization going forward:
• The old checking account was closed and a new checking account was set up the moment the bank opened on the morning after the incident was discovered.
• New double signature checks were ordered.
• There will be a review of every month’s bank statements at each monthly board meeting.
• Mobile app alerts for all credit/debit card charges have been set up for the president and incoming treasurer.
• We will add embezzlement coverage to our PTO insurance plan.
Where do we go from here?
Here comes my cliché that unfortunately rings very true to this incident: hindsight is always 20/20. I am the type of person who always looks for the good in others. If you’ve met me, you know I am an optimist which is why I believe that this community is stronger than one person’s selfish act. The board and I will be working to right the ship, and we appreciate your support as we work together to replenish our resources so that we can continue to be an asset to our school and our community.
Sincerely,
Cyndi Lewis (formerly Frick)
PTO President

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