January 17, 2007
Lansing - Attorney General Mike Cox has announced the arrest of Thomas Katona, former Treasurer of Alcona County and current resident of Harrisville, Michigan, on nine counts of Embezzlement by a Public Official, each a 10-year felony, and 1 count of Forgery, a 14-year felony, for allegedly embezzling more than $1.2 million in county monies to invest in the Nigerian fraud scam.
"Public officials who violate their oath will be held accountable by my office," said Cox. "The citizens of Michigan should rest assured that public officials who mishandle public monies will be prosecuted to the fullest extent of the law."
Katona, age 56, was first elected Alcona County Treasurer in 1993, a position he has held for the past 13 years. While Katona was on vacation in London, England, in late 2006, county treasury employees learned from local bank officials that Katona had directed eight unauthorized wire transfers of county monies totaling $186,500. Six of the wire transfers were to overseas accounts, including to beneficiaries closely linked to the Nigerian Advance Fee Fraud Scheme. Pursuant to Michigan statute, public monies shall not be invested overseas.
Based on these irregularities, the Michigan Attorney General's Office and the Michigan State Police conducted an extensive criminal investigation. It was discovered during the investigation that Katona had wired $72,500 of his personal money in June 2006 to these same bank accounts. On numerous occasions, bank officials warned Katona that they strongly suspected that he was "investing" money into the well-publicized Nigerian fraud scam. Katona ignored these repeated warnings.
In November 2006, the Michigan Attorney General's Office requested that the Michigan Department of Treasury conduct a forensic audit of the Alcona County records. The audit, conducted in December 2006, revealed that the county now has a shortage of $1,236,700. Alcona County's yearly budget is approximately $4 million.
Katona was arrested by the Michigan State Police on January 16, 2007 and was arraigned this morning at 9:00 a.m. in Harrisville 81st District Court before Judge Allen C. Yenior on 10 felony counts.
"I'd like to thank the Michigan State Police for their hard work on this case," said Cox. "Together, we will continue to investigate and prosecute public corruption cases."
Judge Yenior set bond at $1 million cash or 10 percent. Katona will be back in court for a preliminary hearing schedule for January 31, 2007, at 11:00 a.m.