Three warrants related to the investigation were filed today. The most recent dates from last Friday. According to it, two employees in the city's Human Resources Department, Liz Oldre and Laura Masters, submitted letters to police and copies of flexible-spending documents, which they had removed from city files because "of fear of retaliation and concern that [HR Director] Lisa Roth and [Assistant HR Director] Robin Nix would 'alter' the documents." Masters’ letter "alleged that Lisa Roth did not comply with the flexible spending plan and open enrollment/insurance regulations."
Flexible-spending accounts are used by city employees to set aside before-tax dollars for child-care and medical expenditures not covered by insurance. According to the warrants, some employees were paid up-front for items they claimed to have purchased, were allowed to join the plan mid-year (in violation of tax regulations) and exceeded their yearly limit of $6,000.
Nix also told police, according to the warrant, that "it was common practice for employees to be paid 'up-front' for a year of child care expenses or dental quotes, where the dental work had not even been completed yet" and that "Human Resources management acknowledges that these past practices have allowed employees the opportunity to commit fraudulent acts with the flexible spending money." For example, Nix said that on several occasions she'd claimed reimbursement far in excess of the price of an item. In one case, she said she purchased a mattress for $2,000, but was given $4,099 in reimbursement.
Nix asserted that Oldre waived the annual flexible-spending limit for some employees.
The warrant also states that Roth was interviewed, and "stated that she has become aware of problems that existed within the flexible reimbursement program that she had not known about. ... Roth stated that as a result of the reviews that she has done since this matter was discovered she is fairly confident that others in the City of Asheville may have violated that conditions of the flexible reimbursement program.”
In their search Friday, police seized information on every employee enrolled in the flexible-spending program from Jan. 1, 2005, to present.
The other two warrants, also filed today, detail searches in December and January. The first, of Master's Asheville Savings Bank account, mentions that Masters and Oldre were possibly involved in fraud and may have exceeded the flexible spending cap by thousands of dollars, with Masters claiming $7,200 in 2007, $14,760 in 2008 and $14,500 in 2009. Oldre claimed $7,109 in 2009. The second warrant searched city records related to "questionable claims" Masters allegedly made for reimbursement.
"We can confirm that we executed a search warrant, but because this is an ongoing criminal investigation, we can't make any further comment," APD spokesperson Melissa Williams wrote to Xpress today. No one named in the warrants has yet been arrested or charged.
— David Forbes, staff writer
Read more articles in:News