Embezzlement probe into ELCA bookkeeper nears end
MOORHEAD - Eleven months after police began investigating him, the bookkeeper suspected of embezzling more than $714,000 from a Moorhead-based church synod continues to live in the stately rural home he allegedly remodeled and expanded with the stolen money.
Robert Duane Larson hasn't been criminally charged, but Moorhead police Lt. Tory Jacobson said the detective working on the case is nearing the end of his investigation.
"He anticipates being able to request the appropriate charges in the very near future," Jacobson said last week.
Larson, 61, declined an interview Thursday at his rural Wolverton home about 15 miles south of Moorhead.
"I have no comment. Thank you," he said as he shut the door.
Meanwhile, the Northwestern Minnesota Synod of the Evangelical Lutheran Church in America that Larson allegedly fleeced has recovered some of the money through the insurance process, Bishop Lawrence Wohlrabe said.
"We've recovered a portion of the monies that were embezzled, and I anticipate that we'll be able to make a fuller announcement about the amount and how we intend to expend those funds" before the end of the year, Wohlrabe said Friday.
Warrants pile up
Larson served as the synod's bookkeeper from September 2004 until he was fired by the synod's executive committee on Jan. 2 after confessing to financial misconduct, according to a Jan. 6 letter from Wohlrabe to church leaders and congregations.
Larson also volunteered as financial manager for the Rural Life Outreach program, a nonprofit that helps financially strapped farmers and others pay their bills. The synod donates $1,000 annually to the program, which pays companies directly for the outstanding bills.
Moorhead police believe Larson embezzled from the synod by transferring money to the RLO program and making unauthorized payments to himself and creditors. A preliminary audit revealed $714,168.93 in unauthorized transfers, according to an affidavit filed in support of a search warrant application.
More than a dozen search warrants have been filed in the case since Wohlrabe first contacted police Jan. 1.
Most of the warrants were for records of bank and credit card accounts. The most recent warrant, returned Aug. 27, also sought financial records for Larson's 59-year-old wife, Leslie. Other warrants targeted Larson's cellphone account and his utility customer records.
In the affidavit, police said they suspected Larson of possibly using the embezzled funds to pay off a 2007 car loan and 2008 house loan.
Larson also speculated in a police interview that he put a lot of the money toward a $150,000 renovation of his 82-year-old home in rural Wolverton, the affidavit states.
Wilkin County property records show that in 2011, 1,008 square feet was added to the Larsons' two-story home, which sports gray brick, white trim and green and yellow siding. They also added a 1,089-square-foot attached garage.
After the improvements, the estimated market value of the home and 4.2 acres on which it sits increased from $93,800 to $164,000, property records show.
Police searched the home on the afternoon of Jan. 10, seizing two journals, a computer, credit cards and receipts, carbon copies of check blanks, miscellaneous paperwork and a flash card from a camera.
Jon Evert, the RLO program coordinator, said he is aware that federal authorities also are looking into the case because of the potential income tax implications.
Evert said he has received indications that court action should come by the end of the year.
"We're just trying to be patient," he said.
Wohlrabe, the bishop, said synod leaders were still determining how to share information about the recovered funds.
"Frankly, we want to be able to tell the people of our synod not only that we've received the funds but that we've actually turned around and made well some of the ministries that suffered as a result of the embezzlement," he said.
Wohlrabe said the ordeal prompted a "top-to-bottom reworking" of how the synod handles its finances. Its previous bookkeeper also was fired in 2004 for fund mismanagement. She later pleaded guilty to theft in Clay County District Court for making nearly $24,000 in unauthorized purchases.
The synod no longer employs an internal bookkeeper, instead paying Fiebiger, Swanson, West & Co. of Moorhead to manage the books.
"That's been a huge help," Wohlrabe said.
The synod also created an audit committee to review internal control procedures, and it is evaluating whether to hire a different company for its external audit in 2013, Wohlrabe said.
"I can say with a fair amount of confidence that ... the way we account for, report out all of our finances is vastly improved over the period before this," he said. "We've just tried to learn in every respect how we can do everything we can to prevent this from ever happening again."
Wohlrabe called the case a "sad, grievous thing" but said it hasn't hurt giving by congregations. In fact, at the end of October, year-to-date giving was up $40,000 over the same time period last year, he said.
"It would not seem to me that they have, as a result of this, lost faith and felt unable to continue supporting the synod. It seems to be the opposite, and that, of course, is very encouraging to us," he said, adding that he believes the synod's transparency throughout the ordeal has helped.
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