The Portable Sanitation Association International has filed a civil lawsuit against its former executive director, William F. Carroll, Jr., and other staff over the alleged theft of between $650,000 and $1 million from the organization over a several-year period. A 25-page complaint was filed in Minnesota’s Fourth Judicial District Court in Hennepin County Aug. 13.
The PSAI announced to members last week that Carroll was arrested for felony embezzlement on Aug. 27 and former administrative assistant Cynthia Rudiger was arrested for embezzlement on Aug. 14. D. Millicent Carroll, former industry/regulatory standards director for the association, has not been charged, but remains under investigation, according to the letter to PSAI members.
No criminal charges have been filed yet by the Hennepin County Attorney’s office, according to a spokesman.
According to the civil suit, PSAI board members became aware of financial irregularities early this year when the IRS conducted a payroll audit of the association for 2009. In April, the executive committee of the association launched an internal investigation. William Carroll resigned his post on April 3 and Millicent Carroll and Rudiger were fired April 13.
Carroll held his position with the PSAI since 1990.
The suit alleges that beginning in at least 2004 and running through April 2012, the Carrolls and Rudiger stole PSAI funds in a variety of ways. William Carroll took $504,000 in direct funds over that period, as well as $70,400 in unearned and false merit-based bonuses. The suit alleges Millicent Carroll took $12,000 in direct payments and $33,100 in false merit-based bonuses over that period. It states Rudiger took $12,000 in direct funds and $23,400 in unearned or false merit-based bonuses.
The suit also alleges the trio was responsible for at least $50,000 in unacceptable benefits and perks over that time period. An example was paying Rudiger’s husband’s airfare and baggage costs to attend PSAI conventions despite his lack of a connection to the association.
In addition to the Carrolls and Rudiger, the suit names Boyum & Barenscheer CPAs and individuals Joseph A. Rusche, James C. Payette and David Lambert, who the PSAI said was responsible for PSAI tax returns during Carroll’s tenure as executive director.
The suit says the accounting firm in 1995 expressed a concern of the lack of control over association finances due to a small number of employees working in the association offices. But the letter detailing these concerns went to Carroll and was not passed on to the association’s board of directors. The suit claims the accounting firm should have known about the thefts
In total, the association claims it has lost between $650,000 and $1 million. The suit asks for damages in an amount to be determined at trial.
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