Former ICAD employee misappropriated over $500,000, according to audit

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Illustration by Jav Ducker

A former employee of the Iowa City Area Development Group (ICAD) misappropriated over $500,000 of the organization’s money, according to a new report from the Iowa State Auditor’s Office. Sheri Jelinek, who worked at ICAD for 15 years, used an ICAD credit card to make $466,875 in clearly improper purchases, and rack up another $46,903 in suspect purchases for which auditors could not find documentation, according to the report published on Thursday.

It wasn’t until three months after Jelinek resigned in January 2017 that anyone at ICAD realized there was a problem.

“On March 6, 2017, a vendor notified ICAD the credit card used to pay for its annual software subscription had expired,” the report explains. The ICAD credit card in question had originally been issued by the University of Iowa Community Credit Union to Jelinek on Nov. 25, 2002, a month after she started working at ICAD. No one at ICAD ever authorized a credit card for Jelinek, and no one knew she had one.

Jelinek had the credit card’s bills sent directly to herself. As part of her job — Jelinek was hired as an executive assistant, and later promoted to office manager — she was in charge of paying ICAD’s bills, which helped her cover up her spending.

“We were incredibly saddened to discover this violation of our trust but the organization is in solid financial shape and we hope our investors continue to recognize the work of the team as we engage everyday to keep this area vibrant and growing,” ICAD President Mark Nolte said in a written statement issued on Thursday.

The nonprofit ICAD was founded in 1984 to “to strengthen our local communities with a strong business climate and employment opportunities,” according to its website.

After ICAD executives learned about the unauthorized credit card, they asked the Iowa Auditor’s Office to conduct a special audit. The report issued on Thursday covers the period Dec. 12, 2003 through March 14, 2017.

The report documents a wide variety purchases Jelinek made with the ICAD credit card. She bought things for herself — Jelinek was a regular customer of QVC and the Home Shopping Network — and others, including her husband, for whom she bought things including slippers and snow pants. She also made multiple purchases of pet supplies and accessories for an RV.

Jelinek bought things small, but pricey — smart watches, Beats headphones — as well as large and expensive — two big-screen TVs (one was 40 inches, the other, 55 inches). Jelinek’s purchases stretched from Costco, where she bought things like Lucky Charms and Templeton Rye Whiskey, to It Is Vapor, “a vendor which sells vaping products,” according to the report.

Jelinek also used the card to pay non-ICAD bills from “Allstate Insurance, Verizon, South Slope Cooperative Communications, Linn County Rural Electric Cooperative, Mediacom, DirecTV, Quality Care Storage, Sirius XM, and Hulu.”

The Auditor’s office concludes its report with recommendations on how ICAD can improve its management processes.

In a press release, ICAD said it “has conducted a thorough internal investigation to determine the full scope of the issue and implemented additional processes and procedures to ensure a problem like this does not occur in the future. The issue was reported immediately to the Iowa Department of Criminal Investigation, which has conducted an external investigation into this matter. We have fully cooperated with this investigation. Federal criminal charges are pending.”

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The auditor’s office also submitted a copy of its report to the Johnson County Attorney’s Office.

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