By Mark Hansel
NKyTribune managing editor
A Kenton County Grand Jury indicted Bridget Johnson Thursday on charges of theft by unlawful taking of more than $1 million, unlawful access to a computer, and abuse of the public trust of more than $100,000.
Johnson
Johnson is the former director of finance for meetNKY/Northern Kentucky Convention and Visitors Bureau (CVB). She had been there for 20 years when she was suspended.
She was arrested by Covington police Nov. 16, for her alleged role in a sophisticated criminal activity that resulted in the embezzlement and misappropriation of more than $3 million in funds from the organization.
Kenton County Commonwealth’s Attorney Rob Sanders said there may be additional charges against others believed to be involved in the scam. At this point, no one else at meetNKY is among the targets.
“I hope that at some point we will be pursuing charges against other person or persons who received proceeds from the stolen funds,” Sanders said. “The investigation is ongoing and we are not ready to present evidence (on additional suspects) to the grand jury yet.
“Because Ms. Johnson has been arrested, we have to present the case to the grand jury within 60 days, or else she would be released from jail.”
Sanders did not provide details of the crime, but said recovering the stolen funds, which by some estimates could be as much as $3.8 million, will be a challenge.
“It’s too early to say, but I’m not very optimistic,” he said.
Sanders
The CVB has retained attorney Jeff Mando, a partner in the Covington law firm Adams, Stepner, Woltermann & Dusing, to lead the funds recovery effort and provide legal guidance.
Mando has engaged Barnes Dennig, a Cincinnati accounting firm with experience in fraud and forensic accounting, which is conducting a comprehensive forensic investigation.
While an annual audit is common practice in the business world, it would not have been expected to uncover this type of misappropriation. A comprehensive forensic audit provides a more detailed accounting, but is much more costly and is often deemed an unnecessary expense if adequate safeguards are in place.
Sanders did not elaborate on how many people might be involved in the scam.
“Covington Police have sent a detective to New York City in furtherance of the investigation and he’s also been in communication with state and federal law enforcement in other parts of the country as well,” Sanders said. “We’re getting assistance from a number of different agencies.”
Sanders described the investigation as very large and cumbersome, spread out all over the country.
Mando (provided)
“It is very time consuming, however, we have enough to go forward on Ms. Johnson and we are continuing to pursue anyone else that was involved,” Sanders said.
Sanders is not concerned that Johnson’s indictment will make it more difficult to locate other suspects.
“I don’t think that will change (anything),” Sanders said. ”Once Ms. Johnson was arrested, her ability to communicate with anybody else that was involved was cut off. It’s been very publicized.”
The CVB released the following statement, attributed to Board Chairman Tim Bray:
In addition to continuing to work closely with Kenton County Commonwealth’s Attorney Rob Sanders and local and national law-enforcement agencies into their investigations and criminal prosecution of Bridget Johnson and alleged accomplices, meetNKY|Northern Kentucky Convention and Visitors Bureau (the CVB) has taken proactive steps to conduct an internal investigation into the crime, recover missing funds, and implement new policies and procedures for handling the organization’s finances.
To lead a funds-recovery effort and provide overall legal guidance, the CVB has hired attorney Jeff Mando, a partner in the Covington law firm Adams, Stepner, Woltermann & Dusing, PLLC. Mando is a highly respected lawyer with more than 35 years of experience handling complex civil cases, including those involving financial crimes committed against government agencies and other organizations.
To assist in these efforts, Mando has engaged Barnes Dennig, a Cincinnati accounting firm with experience in fraud and forensic accounting, including cases involving embezzlement and misappropriation of assets. Barnes Dennig is conducting a comprehensive forensic investigation, will recommend policies and procedures to improve CVB accounting practices, functions and systems and will also provide litigation support to Mando in his efforts to recover the missing funds from third parties.
We recognize that the financial losses incurred by the CVB because of this criminal activity are considerable; we are firmly focused on restoring public trust in our organization while continuing to support our important mission of attracting conventions, meetings, and visitors to our region.
Despite this regrettable incident, the CVB and our hospitality partners continue to bring record-number visitors to the Northern Kentucky region. Boone, Campbell and Kenton counties account for more than 20 percent of all visitor expenditures in Kentucky and more than 10 percent of all hospitality jobs in the state.
Our destination continues to thrive and prosper thanks to the collective efforts of the CVB, our hospitality partners, and our community.
Law enforcement officials believe Johnson created fraudulent invoices to the CVB on behalf of several bogus vendors.
She paid millions of dollars to these vendors from three different bank accounts over the course of about 16 months. She is then alleged to have taken steps to cover up the activities from the organization.
The CVB has the accounting procedures in place to safeguard the agency against this type of misappropriation, including a dual signatures requirement and no electronic transfers for accounts payables.
Johnson is believed to have violated those procedures by using electronic transfers to avoid the dual signatures requirement and complete the transactions.
On Sept. 26, BB&T, the CVB’s bank, alerted the organization about suspicious electronic transfers in its operating account, which prompted Johnson’s administrative suspension. She had been with the CVB for 20 years at the time of her suspension.
A subsequent investigation that involved the Kenton County Commonwealth’s Attorney’s Office, Covington Police and the Federal Bureau of Investigation, led to Johnson’s termination of employment on Oct. 3, and the November arrest.
Johnson remains in the Kenton County Detention Center on a $500,000 bond.
Contact Mark Hansel at mark.hasnsel@nkytrib.com
