Bureau of Economic Research head Lauritz Mills pled not guilty Wednesday to a fraud and embezzlement charge stemming from a September 2009 audit report questioning the agency’s management of some federal funds.
The audit was born out of another case involving former government aide Alric Simmonds, who was sentenced in 2008 to seven years in prison after being convicted of embezzling government funds — primarily from an account set up at the bureau to hold federal funds awarded for a proposed universal health care program.
The 2009 report states that Mills knew about Simmonds’ transactions but didn’t report them and only asked him to stop writing checks from the account once it was overdrawn. The audit also highlights what was called "inadequacies" in the management and accounting of bureau funds, the processing of transactions and the awarding of professional service contracts.
More specifically, the audit says:
-investigators found that the bureau had "unchecked access" to $2.7 million in federal and local funds in its checking accounts, which – because of a lack of proper monitoring by the Finance Department – were "put at risk" and left open for Simmonds to embezzle;
-the bureau "inappropriately" paid its employees for work done after regular business hours, failed to negotiate contractual services from certain vendors and didn’t put services valued at more than $5,000 out for bid, as required by local procurement laws; and
-the office also entered into transactions that "created a conflict of interest" for Mills, and gave employees unauthorized pay advances.
Mills countered the allegations after the audit was released and, in a September 2009 phone interview with the Source, described the report as "unfair and incorrect." In many instances, the auditors never sat down with BER employees to discuss their findings, and if they had, they would have been provided with documentation that disputes their claims, she said at the time.
The charge against Mills is included in a three-count indictment filed earlier this month. In it, Mills and her husband, Frank Mills — who was also arraigned and advised of his rights Wednesday in federal District Court — are also charged with filing fraudulent tax returns for calendar years 2004 and 2005.
According to the indictment, the couple were making in excess of the $77,267 and $101,348 in taxable income they declared during that time.
According to court officials, the couple was released on an unsecured $50,000 bail — on condition that they surrender their travel documents and request permission from the court to leave the territory.
Neither of the Mills has been arrested but appeared Wednesday pursuant to a summons from the court.
