A year-long investigation into possible misappropriation of funds at Keyser City Hall culminated Wednesday in a grand jury indictment against a former city councilman accused of embezzlement and falsifying public records.
However, the West Virginia State Police officer who conducted the investigation referred several issues to the State Ethics Commission and the State Auditor’s Office, and their investigations are ongoing.
Marques Rice, 35, was charged with embezzlement of approximately $3,000, a felony offense. He was also charged with a second felony for making false pretenses.
According to Mineral County Prosecutor Lynn Nelson, each of two charges carries a possible prison term of one to 10 years.
The investigation into possible misappropriation of funds and other misconduct at Keyser City Hall was prompted when two unnamed individuals presented evidence to the county prosecutor’s office, which then referred the matter to the State Police.
Sgt. J.M. Droppleman conducted the investigation, subpoenaing thousands of pages of documents and interviewing dozens of witnesses.
Various unofficial reports and rumors circulating through the city indicated that as much as $3 million may have been embezzled. Working with the Mike Ryan, the city’s accountant, Droppleman said he found no evidence of improper finances approaching anything on that scale.
“Moneys were moved from accounts, and moved around, maybe spent where they shouldn’t have been, but there was no misappropriation,” he said.
Still, the trooper said he uncovered enough evidence of improper documentation, poor fiscal management, failure to bid contracts and other deficiencies to warrant the investigation. “The individuals who reported this need to feel vindicated,” he said.
The charges against Rice involve a tree removal contract with JR Tree Service that is at the heart of the case, and also one of the specific issues referred to the state auditors and ethics commission. The investigation revealed that the city had contracted with the tree service to cut trees in 8 to 10-foot lengths and haul them to the city’s ruble fill, where city residents would be able to cut them into fireplace length for their own use.
According to law enforcement officials, Rice directed the tree service to cut the wood into fireplace length and haul it to his own property. The amount of money referred to in the embezzlement charge was based on about 30 loads of firewood delivered to Rice, at cost to the city of $70-$100 per load, based on the additional amount of work the tree service performed beyond the contract, and subsequently billed the city for.
Investigators were unable to determine whether Rice sold the wood.
The second charge against Rice involved a city-owned heavy duty sprayer valued at approximately $40,000, which is used to clean sewer lines and septic tanks. A city employee had borrowed the sprayer for his personal use and while returning the equipment to the city garage, was involved in an accident that destroyed the sprayer. According to the charges, Rice feared that the insurance company would not reimburse the city for the loss if the equipment was being used for non-city business, and produced or directed to be produced official city records falsely reporting that the accident had occurred on Route 46.
While the victim identified in the embezzlement charge was the city of Keyser, the victim in the false pretenses charge was Commercial Insurance Services.
Rice, who was defeated in a bid for re-election earlier this year, was unavailable for comment Wednesday.
Nelson, the prosecuting attorney, is due to step down in January for a judgeship. He said if the Rice case goes to trial, it would likely be under the new prosecuting attorney.
According to city documents, the contract with JR Tree Service provided for $551,000 in payments over three years, from 2004 to 2006. In the course of his investigation, Droppleman learned that the contract was not competitively bid when initially set. The city only bid the work toward the end of the contract period.
“That project operated for three years without being bid out,” Droppleman said. “That’s something the auditor’s office is looking into, and the ethics commission.”
Keyser Mayor Glen “Bunk” Shumaker, the only current member of the council in office at the time, said city leadership was in other hands when the contract was awarded. “I didn’t agree with the way it was done,” he said of the tree removal contract. “But we had a different mayor and council.”
Noting the complexity of the case, Droppleman said he had asked the State Police in Charleston to assign a special financial fraud unit to the matter, but they were too busy. The trooper said his task was to look for hard criminal violations, but other issues may emerge in the gray area of ethics, or in a closer examination by state auditors.
“There were a lot of issues that weren’t criminal, but may have been an ethical problem,” he said. “I just dealt with actual, hard criminal law.”
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A year-long investigation into possible misappropriation of funds at Keyser City Hall culminated Wednesday in a grand jury indictment against a former city councilman accused of embezzlement and falsifying public records.
However, the West Virginia State Police officer who conducted the investigation referred several issues to the State Ethics Commission and the State Auditor’s Office, and their investigations are ongoing.
Marques Rice, 35, was charged with embezzlement of approximately $3,000, a felony offense. He was also charged with a second felony for making false pretenses.
According to Mineral County Prosecutor Lynn Nelson, each of two charges carries a possible prison term of one to 10 years.
The investigation into possible misappropriation of funds and other misconduct at Keyser City Hall was prompted when two unnamed individuals presented evidence to the county prosecutor’s office, which then referred the matter to the State Police.
Sgt. J.M. Droppleman conducted the investigation, subpoenaing thousands of pages of documents and interviewing dozens of witnesses.
Various unofficial reports and rumors circulating through the city indicated that as much as $3 million may have been embezzled. Working with the Mike Ryan, the city’s accountant, Droppleman said he found no evidence of improper finances approaching anything on that scale.
“Moneys were moved from accounts, and moved around, maybe spent where they shouldn’t have been, but there was no misappropriation,” he said.
Still, the trooper said he uncovered enough evidence of improper documentation, poor fiscal management, failure to bid contracts and other deficiencies to warrant the investigation. “The individuals who reported this need to feel vindicated,” he said.
The charges against Rice involve a tree removal contract with JR Tree Service that is at the heart of the case, and also one of the specific issues referred to the state auditors and ethics commission. The investigation revealed that the city had contracted with the tree service to cut trees in 8 to 10-foot lengths and haul them to the city’s ruble fill, where city residents would be able to cut them into fireplace length for their own use.
According to law enforcement officials, Rice directed the tree service to cut the wood into fireplace length and haul it to his own property. The amount of money referred to in the embezzlement charge was based on about 30 loads of firewood delivered to Rice, at cost to the city of $70-$100 per load, based on the additional amount of work the tree service performed beyond the contract, and subsequently billed the city for.
Investigators were unable to determine whether Rice sold the wood.
The second charge against Rice involved a city-owned heavy duty sprayer valued at approximately $40,000, which is used to clean sewer lines and septic tanks. A city employee had borrowed the sprayer for his personal use and while returning the equipment to the city garage, was involved in an accident that destroyed the sprayer. According to the charges, Rice feared that the insurance company would not reimburse the city for the loss if the equipment was being used for non-city business, and produced or directed to be produced official city records falsely reporting that the accident had occurred on Route 46.
While the victim identified in the embezzlement charge was the city of Keyser, the victim in the false pretenses charge was Commercial Insurance Services.
Rice, who was defeated in a bid for re-election earlier this year, was unavailable for comment Wednesday.
Nelson, the prosecuting attorney, is due to step down in January for a judgeship. He said if the Rice case goes to trial, it would likely be under the new prosecuting attorney.
According to city documents, the contract with JR Tree Service provided for $551,000 in payments over three years, from 2004 to 2006. In the course of his investigation, Droppleman learned that the contract was not competitively bid when initially set. The city only bid the work toward the end of the contract period.
“That project operated for three years without being bid out,” Droppleman said. “That’s something the auditor’s office is looking into, and the ethics commission.”
Keyser Mayor Glen “Bunk” Shumaker, the only current member of the council in office at the time, said city leadership was in other hands when the contract was awarded. “I didn’t agree with the way it was done,” he said of the tree removal contract. “But we had a different mayor and council.”
Noting the complexity of the case, Droppleman said he had asked the State Police in Charleston to assign a special financial fraud unit to the matter, but they were too busy. The trooper said his task was to look for hard criminal violations, but other issues may emerge in the gray area of ethics, or in a closer examination by state auditors.
“There were a lot of issues that weren’t criminal, but may have been an ethical problem,” he said. “I just dealt with actual, hard criminal law.”
