Larry Duane Couch, 54, of Vian was charged late Friday afternoon with one count of embezzlement of public money. If convicted, Couch faces a fine of triple the amount of money embezzled and one to 10 years in prison, according to the charge against him.
Couch was to turn himself into authorities on Monday, with a bond set at $35,000. Jail records on Wednesday morning did not show booking information for Couch, but Assistant District Attorney Kyle Waters said Tuesday that Couch walked through the jail on Monday and was allowed to put up a property bond. He is set to be in court on Sept. 19.
The charge against Couch comes in the midst of an investigative audit of the school's records by State Auditor Jeff McMahan's office.
Terri Watkins, spokesperson for McMahan's office, told Your TIMES at 4:30 p.m. Friday that, "Our investigation and audit is very much ongoing."
Watkins said the auditor's office was working with investigators with Sequoyah County District Attorney Jerry Moore's office. Moore requested the investigation.
"We are deeply concerned with what appears to be the theft of $100,000 from a school system that deeply needs that money," she said.
Watkins noted that auditors will be at the school longer to determine if any additional money is missing.
Jerry Moore told Your TIMES Friday that charges were filed, but declined to comment on the audit details, citing the incompletion of the audit. Moore said there is "very strong evidence" against Couch.
When McMahan was asked on Monday if there were any other instances of missing funds, McMahan said, "There are some other areas we are looking at as we speak that bring concern to our office."
McMahan said he hopes the audit will be completed in the next three weeks. His office is inspecting school records from July 2005 to the present - what Moore's office requested McMahan's office investigate.
"If we discover anything outside the scope of the audit period, we can certainly expand the audit period," McMahan said.
McMahan said the audit was brought to their attention after a new school board member, identified in court records as Raymond Bolin, had questions about school expenditures and was not being given information.
"He started asking questions, which is a good thing," McMahan said.
The school board member took those concerns to Moore, who in turn asked McMahan's office to investigate.
"I believe this gentleman was on the right track," he said, referring to Bolin.
McMahan pointed out that sometimes the only way for things to be uncovered is by asking questions.
"You've gotta have the checks and balances in place," he said.
McMahan said it is his understanding that Couch had been at the school district for 26 years. He did not know how long Couch served as principal.
It appears Couch was "running the whole show," McMahan said. He said Couch was handling money the school received, approving purchase orders, and signing invoices.
"You could buy every kid in that school a dictionary, backpack and laptop and still have $15,000 left," McMahan said of the $100,000 that was stolen. "The kids missed out on things and that's the bottom line - that's who loses."
Once the audit is complete, McMahan said his office will issue a report, which will be made public.
Couch allegedly took from a school where nearly all of its students are eligible for free or reduced lunches, which is determined by family size and income.
According to the Office of Accountability's 2006 school district report, 76.1 percent of students in the school are eligible for free or reduced lunches, compared to the state average of 55.5 percent.
But 77 percent of the student population is Native American, meaning more federal dollars for the school.
The Office of Accountability indicated that the school spends the most money per student on average each school year in the district. For the 2005-6 school year, the school spent $10,098 per student, compared to the state average of $6,882. The school's average enrollment for the 2005-6 school year was 168 students.
The 2006 school district report also indicated that Couch was the only administrator at the school, receiving an average salary of $79,735, which included fringe benefits.
THE CHARGE
According to court records, Alan F. Loyd, investigator with Moore's office, reported that he was first contacted by Moore on May 8 in reference to a call Moore had received from Sequoyah County Treasurer Tricia Yates about Marble City Schools.
On May 8, Loyd contacted Yates, who told him that on April 30 she called Marble City School to speak with a secretary about money that had been electronically deposited in April. After getting the information, Yates said she didn't think much of it at the time, but then more things came up concerning the school.
Yates said on May 4, her deputy, Angela James who registers most of the school warrants, had left the office for a while and while she was out, Raymond Bolin, school board member, came into the office and requested copies of the school's warrant register.
According to court records, Yates told Loyd that shortly after Bolin left the office, Couch came into the treasurer's office and handed Yates a large manila envelope and allegedly said, "This is what Mr. Bolin needs. He wouldn't even speak to me outside. He doesn't need to know that this wasn't prepared by you. There's no need for you to have to dig all that stuff up. I've got it right here."
Couch allegedly went on to tell Yates that she might want to put the information he provided in another envelope because he thought Bolin saw him carry the envelope into Yates' office.
Couch allegedly told Yates, "Man, he's (Bolin) after me, but I've got nothing to hide."
Yates told Loyd that Couch then inquired about what information Yates gave Bolin. Yates reported to Couch that the only documents they had given Bolin were the same documents that her deputy, James, had faxed to Couch. Yates said that she told Couch that Bolin was looking for the warrant register for the building fund for the 2005-6 school year for $100,000 and that they were unable to locate it.
Yates told Loyd that Couch allegedly replied, "Good. That's the one I don't want him to have. Thanks for helping me out. Stall him as long as you can."
Yates said that after her deputy returned to the office and they discussed the matter, both became suspicious over Couch's actions.
Yates said that James pulled the original warrant and found that warrant Number 2, dated Feb 14, 2006, from the Marble City building fund series 2005-6 account for the amount of $100,000, was made payable to Armstrong Bank. Yates said Martha Taylor was still the county treasurer at the time the warrant was registered.
Yates told Loyd that after seeing the warrant her first thought was that Couch was doing a building project without the approval of the board, but that when she noticed the check had been signed by an Armstrong Bank officer, she became increasingly concerned.
Court records indicated that Yates explained that normally a check is only endorsed, or signed, by a bank officer if the check is cashed or a cashier's check is issued for the funds, not if it is for a payment of a loan. At that time, she contacted an Armstrong Bank in a different county to inquire as to what transaction accompanied the $100,000 warrant.
After preparing a written request, Yates discovered that a cashier's check went with the warrant. The check was issued to Jane and Kelly Nelson for $100,000 on Feb. 23, 2006. Yates went to the county clerk's office to further her investigation and found a warranty deed from the Nelsons to Couch and his wife, dated March 23, 2006, with documentary stamps of $375, which represents the purchase price of $250,000, with the Nelsons financing the remaining $150,000.
The information that Yates provided led Moore's office to make a formal request for an investigative audit on May 8.
COUCH ALLEGEDLY CONFESSES
On June 5, state auditors and Loyd served a search warrant at the school.
Couch arrived at the school and, after reviewing a copy of an affidavit for the warrant, Couch allegedly told Loyd, "Well, it's all in there. I don't want to drag this out and hurt the school and there are good people that work here. I did it."
When asked what Couch did, Couch allegedly replied, "What it says," indicating the affidavit in the search warrant.
After reading a Miranda warning form, Couch said, "My lawyer would probably tell me not to say anything, but I want to get this over with."
According to court records, Loyd told Couch that he didn't have to say anything to him and if he had apprehensions, he shouldn't say anything.
Couch allegedly replied, "I just want to get this over with. It's been bothering me for a year."
During Loyd's conversation with Couch, Couch said he had a lot of things going and he had $100,000 in his farm account, but that it would have taken all of those funds so he took $100,000 from the school and used it on the land purchase.
Couch told Loyd that he intended to replace the $100,000 he took from the school, saying that he needed about a year to get it done. Couch said once he had taken the money from the school, he figured out that it was a lot easier to take it than trying to put it back. Couch allegedly told Loyd that he could not figure out how to get the money back in there without someone knowing. Couch said he thought about retiring, but he did not want to leave things the way they were.
He allegedly said, "I took the money. I am willing to pay it back and face the consequences for what I did and I will resign today."
At that point, the investigator told Couch that the decision to resign was up to him. In the affidavit, Loyd said investigators were going to gather paperwork and after the auditor reviewed it, Couch would be contacted.
Your TIMES was unable to reach a school official for comment on Couch's current employment status with the school.
A family member said Couch was not available Monday when Your TIMES contacted him by phone, and Couch's attorney, Fourth Scoufos of Sallisaw, could not be reached for comment.
