In 2010, the Gila County Attorney’s Office reported a fraud allegation to the Office of the Auditor General involving the accounting manager for Pine-Strawberry Water Improvement District, Rebecca Sigeti. Sigeti was an accountant for a private business, Sunny Mountain Realty, LLC.
The Auditor General’s Office found that from August 2010 through January 2016, Sigeti have embezzled a total of $841,056 from her employers: $524,686 from the District and $316,370 from Sunny Mountain. The alleged embezzled district monies came from customer security deposits and water-use payments as well as taxpayer
property tax payments and should have been used to support district operations, according to the Auditor General’s Office.
The Auditor General’s Office turned over its finding to the Arizona Attorney General’s Office, which resulted in her indictment on 40 felony counts.
The Auditor General’s report reads in part:
From August 2010 through January 2016, Sigeti may have violated state laws related to theft, misuse of public monies, fraudulent schemes, computer tampering, money laundering, and forgery when she issued 32 district checks and warrants with forged signatures totaling $524,686 payable to herself and to three businesses for which she managed the bank accounts. Specifically, Ms. Sigeti paid $408,922 of these monies to Sunny Mountain; $93,294 to two businesses she owned with her husband; and $22,470 directly to herself. Ms. Sigeti also falsified district records to help conceal her scheme by recording false payees, omitting payees,
and deleting entries in the District’s accounting software program and in bank account reconciliations.
From August 2010 through September 2015, Ms. Sigeti may have violated state laws related to theft, fraudulent schemes, computer tampering, money laundering, and forgery when she issued 200 Sunny Mountain checks with forged signatures to herself, her creditors, and two of her businesses. These checks totaled $725,292; however, $408,922 of this amount was paid with district monies deposited in Sunny Mountain’s bank account, resulting in an alleged net theft from Sunny Mountain of $316,370. Specifically, Ms. Sigeti issued Sunny Mountain checks totaling $681,092 directly to herself and $44,200 to her businesses and creditors. Ms. Sigeti also falsified Sunny Mountain records by recording false payees, omitting payees, deleting entries in the accounting software program, altering bank statements, and creating false invoices.
Former and current district governing board members failed to properly protect and control district monies entrusted to them by taxpayers. Specifically, they did not implement adequate controls over disbursement procedures, review bank statements, or enforce their conflict-of-interest policy.