Former payroll officials in Mustang and Hulbert schools have admitted they fiddled with payrolls to illegally increase their paychecks Kim Weinrich, 67, of Mustang, pleaded guilty to stealing nearly half a million dollars from Mustang schools.
Weinrich was charged Dec. 3 with committing wire fraud and making and submitting a false income tax return, Oklahoma City U.S. Attorney Robert J. Troester announced.
Public records reflect that between 2014 and April 2022, Weinrich was employed by Mustang Public Schools as payroll supervisor and was promoted to director of payroll services in 2021. In her roles with the school, Weinrich was responsible for administering, processing, and reconciling the bimonthly payroll for the district’s employees.
According to the information filed in the case, beginning in July 2016 Weinrich manipulated the district’s payroll accounting software to increase her net pay each pay period, and deposited the stolen funds into her personal bank account. Weinrich’s scheme resulted in several district employees underreporting their federal and state withholdings, which reduced the amount of their tax refunds.
In all, between July 2016 and April 2022, Weinrich defrauded the district out of $471,658.
Additionally, public records indicate Weinrich manipulated the district’s payroll accounting software to make it appear as if she paid substantial amounts in federal income taxes, when in reality Weinrich had no federal income taxes withheld. On April 5, 2022, Weinrich filed a federal tax return where she reported income that was substantially lower than the actual income received due to the fraud.
Weinrich pleaded guilty in Oklahoma City’s Western District federal court on Dec. 12.
She admitted that (1) she adjusted payroll amounts to herself to increase her income, (2) manipulated payroll software to make it appear as if she were paying substantial amounts in federal and state income taxes when in fact she wasn’t, and (3) f iled a federal tax return declaring she made $91,295 while knowing the actual income received was substantially more.
Weinrich faces up to 23 years in federal prison and fines up to $350,000; in addi tion, restitution will be mandatory under federal law. She was released from custody on a $5,000 unsecured bond pending sentencing.
The case was investigated by Internal Revenue Service Criminal Investigation and the U.S. Secret Service.
Meanwhile, in Muskogee’s Eastern District federal court, Leslie Shannon Mack, 54, of Hulbert, was sentenced Dec. 11 to 12 months and one day in federal prison for one count of theft concerning programs receiving federal funds. She also was ordered to pay $372,808 in restitution.
Her co-conspirator, Rebecca Deanne Morehead, 53, of Locust Grove, was scheduled for a jury trial Dec. 3 but pleaded guilty Nov. 21. Court records indicate she is free from custody on her own recognizance pending sentencing.
Mack pleaded guilty on Feb. 1, 2023. According to investigators, from June 2019 until October 26, 2021, while serving as treasurer of Hulbert Public Schools, Mack issued herself and Morehead excessive payroll payments above and beyond their district-authorized salaries. At that time Morehead was the school district’s encumbrance clerk.
Mack also allowed another individual access to the f inancial accounting system. Their combined actions resulted in an ultimate loss to the Hulbert Public School District exceeding half a million dollars.
Ronald A. White, chief U.S. District Judge in the Eastern District federal court, instructed Mack to self-report to a desig nated U.S. Bureau of Prisons facility by Jan. 10 to serve a non-paroleable sentence of incarceration.
The Hulbert School District embezzlement investigation was triggered by an audit performed by Broken Arrow Certified Public Accountants Bledsoe, Hewett & Gullekson of the school district’s financial records for school year 2020-21. The audit also prompted a probe by the Oklahoma State Bureau of Investigation and the U.S. Department of Education – Office of Inspector General.
In total, “there were approximately 75 payroll payments made to Leslie Mack and 52 payments to Becky Morehead” during Fiscal Year 2020-21, auditors found.
Mack’s contract provided for a salary of $45,850 that year, but she paid herself $227,264. Similarly, Morehead’s contract salary that year was $39,650 but she received $117,702.
Furthermore, “it is important to note that the paid amounts … are the net amounts paid to each employee,” the CPAs emphasized. “These figures do not include the total payroll cost to the district for each employee,” such as Oklahoma Teachers Retirement System contributions, the district’s share of FICA and Medicare withholding, and other benefits.
In addition, “Software reports for the 2020-21 fiscal year show additional district matching costs of approximately $100,000 for Leslie Mack and Becky Morehead.”
Hulbert school district is in Cherokee County and recorded an average daily attendance of 501 students in school year 2023-24.