Charges filed in Bayfield County Circuit Court accuse the Tri-County Corridor Commission director of using more than $183,000 of the organization’s funds to cover personal expenses.
Scott A. Williams, 58, of Iron River is facing one count of felony theft in a business setting exceeding $100,000 and six felony charges related to tax credits and fraudulent income tax returns.
In addition to the theft, Williams is accused of evading more than $14,000 in taxes for not reporting Tri-County Corridor Commission income and collecting $454 in tax credits he was ineligible to receive based on his actual income over a three-year period, according to a Wisconsin Department of Revenue investigation.
Commission Chairman Pat Daoust reported the theft to the Bayfield County Sheriff’s Office last June. He said poor performance and Williams’ attitude prompted him to check on the organization’s account at Security State Bank in Iron River.
According to the criminal complaint:
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The chairman of the Tri-County Corridor Commission contacted the Bayfield County Sheriff’s Office last June after discovering the commission’s balance was just over $7,000 on June 3. During a meeting March 4, 2019, Williams had reported a balance of $143,396.63 in the account to commissioners. However, an unidentified bank employee revealed that on Feb. 25, 2019, the balance of the account was $6,802.61.
Williams was the only one authorized to sign checks on the account and bank statements were directed to Williams’ home, where he maintained the commission’s records, computer and accounting software.
An audit of the commission’s account revealed misstated or missing transactions started as early as Sept. 2, 2014, just after Williams took over the organization’s finances.
The Bayfield County Sheriff’s Office found checks written against the commission’s account that were omitted from accounting software and entries that were under different names and amounts from checks processed by the bank.
“When asked how he would take the money, Williams said a lot of times he would write a check to himself,” the complaint said. “Williams repeatedly admitted to the thefts and repeatedly stated that he was the only one involved in the thefts.”
Bayfield County Investigator Brent Bratley reviewed an audit performed by Ehlers & Pierce and reviewed Williams’ personal checking account. Bratley estimated Williams cashed checks and paid child support totaling about $183,029 using Tri-County Corridor Commission funds.
The commission is funded by Ashland, Bayfield and Douglas counties and grants from the Wisconsin Department of Natural Resources to maintain the 62-mile trail that runs from Ashland to Superior.
Ehlers & Pierce’s audit of the commission’s account showed checks that were never entered into the accounting software or misstated transactions totaling about $203,440.
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“These Tri-County Corridor Commission checks were either deposited into Williams’ personal checking account or cashed by Williams or used by Williams to purchase personal items,” according to the complaint. “According to the audit, the dates of these transactions are approximately between Sept. 2, 2014 and March 11, 2019.”
Daoust said Williams resigned in June. He said the loss has been devastating and forced the commission to take out a $60,000 loan from Ashland County, most of which has since been repaid.
Williams reportedly used the money to purchase motorcycles, two trucks, computer equipment and accessories, a washer and dryer, a zero-turn riding lawn mower and other equipment he wasn't authorized by the commission to buy. Williams is also accused of using a Tri-County Corridor Commission check to pay about $4,987 in child support to the Bayfield County Child Support Office in November 2017.
In October, the Tri-County Corridor Commission filed a civil suit against Williams and was awarded a judgment for $203,445.66, but Daoust wasn’t confident the organization would ever see the money. He said they are still trying to take possession of property Williams bought with the commission’s money.
Since the theft was discovered, Daoust said the commission has put measures in place to ensure that its financial statements reconcile with the bank’s reporting, and commissioners are doing the work because they can’t afford to hire a new director.
“People really need to be patient with us, because the work’s not going to get done and the corridor’s not going to be in as good a shape as it always has been because of this,” Daoust said. “We are doing our best to see that things continue … the future is unknown at this time.”
According to the criminal complaint, the tax-related charges stem from Williams not reporting his earned income from the Tri-County Corridor Commission —$500 per month salary, $200 per month to store the commission’s computer and records, and $11 per hour for trail maintenance — and the illicit proceeds on 2016, 2017 or 2018 tax returns in Wisconsin, according to the findings of DOR Special Agent Nicholas Weidman. Over the three year period, Weidman found Williams reported a total of $61,919 in income but had not reported $200,748 in money received from the Tri-County Corridor Commission.
A summons was issued March 27 ordering Williams to make an initial appearance May 19 in Bayfield County Circuit Court.
