More on Karen Brewer

(Note: You can read an earlier story about Karen Brewer here. A later story is here.)

Nov. 17, 2008

By Jacob Quinn Sanders
Arkansas Democrat-Gazette

After interviewing Karen Brewer about a scheme in which she told authorities she stole cash from her job issuing personalized license plates for the state Department of Finance and Administration, an Arkansas State Police investigator estimated she took a total of between $42,000 and $44,000 over three years.

An internal department audit completed last week, however, concluded that Brewer embezzled at least $268,622.20, usually in $24 cash increments, during a scam she pulled off alone that lasted a decade.

In the last three years alone — the time period for which auditors had the most complete records — the audit found that Brewer stole $232,128.25. That amount is almost 10 times her most recent annual salary.

“The consensus of all involved,” the auditors wrote, “is this has been going on as long as they can remember.”

A 20-year department employee, Brewer was the only full-time employee who worked issuing personalized plates such as “DRHOG” and “BUGGOFF” in the only office in Arkansas that performs that type of work. Audit records show that only one employee raised questions about Brewer’s actions.

The department fired Brewer, 41, on Oct. 3, a day after her interview with state police investigator Rick Newton. State police spokesman Bill Sadler said Friday his agency was preparing to send its case file to the Pulaski County prosecuting attorney’s office for possible criminal charges.

No one answered the door at Brewer’s home Friday afternoon.

Michael Munns, the Department of Finance and Administration’s assistant commissioner of revenue operations and administration, said the case was a painful learning experience.

“There is a lot that we are changing because of this case,” he said. “We cannot leave ourselves open to a situation where this could happen again.”


Brewer had been considered an exemplary employee in her two decades at the Department of Finance and Administration when supervisors first learned in late September that she had repeatedly asked lower-ranking cashiers to turn checks for amounts between $20 and $100 for license-plate fees into cash for her. The most common check amount was $25.

Telling the $9-an-hour cashiers she needed most of the cash to send as a refund and the last $1 to pay for a requested duplicate registration, Brewer pocketed all but that $1 and ordered the plate anyway, listing it as free in the computer system, the department’s investigation found. She would also order the duplicate registration and show it as paid, according to the department’s investigation.

With people receiving the plates they paid for, there was no one to complain. And with the cashier’s cash drawers and Brewer’s computer system showing no money missing, there was no reason to ask too many questions internally either.

But there are very few reasons to legitimately send out a free plate, Munns said, including replacing ones that were damaged, missing their reflective coats or recalled.

None of Brewer’s supervisors has gone beyond simply guessing at a possible motive. Court records show that she and her husband, Timothy, filed for bankruptcy in 2000 and that the case was closed in 2006.

Munns said the audit was incapable of documenting every dollar Brewer stole. A change in computer systems in the late 1990s made that difficult, as did regular destruction of some internal records after a given period of time.

Auditors originally planned to examine all 14,323 transactions Brewer made going back to 1999 and considered checking back to 1997, internal department records show.

When that proved difficult, Munns said, the auditors went back only to July 15, 2004.

“That big number, the $268,000 number, is the best we could do,” he said. “We know it’s probably more than that.”

The auditors also specified the amount reportedly taken between Oct. 1, 2005, and Oct. 1, 2008, to give Newton a figure from within a three-year statute of limitations that could apply to certain crimes. Newton made clear to the auditors that he needed the information they found.

“The Prosecuting Attorney Office for Pulaski County will not accept an Affidavit from this agent until an audit can be completed,” Newton wrote in a statement dated Nov. 10 included in the audit records.

In the end, the auditors concluded that Brewer “fraudulently used fellow cashiers” to cash 10,557 separate checks — an average of almost seven checks a day for every calendar day between the earliest date in the audit and the date she was fired.


The audit records show only one employee asking any questions about Brewer before supervisors became suspicious of her Sept. 20, when a security manager saw a busy cashier but no customers.

“I don’t remember when Karen first asked me to cash the checks,” the employee, Mary Porch, wrote in a statement to the auditors dated Nov. 5. “When she first asked me I went to the supervisor Sondra Thomas and asked her about giving Karen my cash she said it was OK.”

According to the audit report, the former assistant agent of the department’s Central Revenue Office in Little Rock, Diane Mitchell, remembered Porch questioning Thomas “and was told it was procedural to comply.”

Thomas told the auditors she asked Brewer about it and mentioned it to a supervisor perhaps “4 or 5 years ago,” according to the audit report. That time period corresponded to a day when Porch processed 29 duplicate registrations and gave Brewer a total of $721 in cash, the largest single-day amount auditors believe Brewer could have taken.

Yet Munns said Thomas’ supervisors remember no such conversation.

“Well, it’s a he said, she said thing,” Munns said. “It’s a very difficult situation and we still have not resolved that to our satisfaction.”

Nothing happened to Brewer. The matter is never mentioned in Brewer’s performance evaluations, in which she continued to win excellent marks, and she was never investigated or disciplined, according to her personnel file.

Munns said it was important that the department use Brewer’s example to strengthen itself against rogue employees.

Already, he said, the job Brewer did alone will be divided among two people. Free plates — “or, really, free anything,” Munns said — now require a computer override from a supervisor in the department’s administrative offices in Little Rock.

“And we will get a monthly printout showing exactly who authorized what,” Munns said.

All cashiers were also reminded of a requirement to read the department’s cash-management manual, and supervisors put special emphasis on check-cashing and returning change. And the department is developing a form for all employees who handle cash to sign acknowledging that only certain supervisors can authorize giving change from checks.

Munns said, too, that supervisors from the administrative offices in Little Rock were meeting with each of the department’s five divisions statewide.

“We want them to know what happened so we can work together to be sure something like this doesn’t happen again,” he said. “That’s the biggest thing: We can’t let this ever happen again.”


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