Police: $139,000 missing

COEUR d'ALENE - Coeur d'Alene police investigating a suspected case of embezzlement by a former longtime Kootenai County employee have determined about $139,000 is unaccounted for from a 10-year period.

Coeur d'Alene detectives received a report Dec. 7 from Kootenai County Clerk-Auditor Dan English of an employee - named by English as chief deputy clerk Sandy Martinson - possibly embezzling money.

Detectives received financial records dating from January 2000 to Oct. 31 for review.

The police department completed its investigation and forwarded the results to the Bonner County prosecutor's office, said Sgt. Christie Wood, department spokeswoman.

The police report or results of the investigation couldn't be obtained Wednesday in a public records request because the investigation is ongoing.

Bonner County is handling the prosecution because Martinson was a Kootenai County employee for almost 35 years.

Bonner County Prosecutor Louis Marshall told The Press he will need to review the matter with the investigators and hopefully make a charging decision in the next week.

Martinson, a Post Falls resident, couldn't be immediately reached for comment about the allegations.

English said county auditors undertook a routine review of Martinson's records after her late-November retirement and discovered "irregularities." He said her retirement plans had been in the works for a year.

Martinson was chief deputy clerk and auditing supervisor before English was appointed in 1995.

As a chief deputy, she had the authority to sign documents when English wasn't present. Much of her day-to-day duties included dealing with taxing districts.

The Press interviewed Martinson in October about those very taxing districts.

The newspaper reported then that the Kootenai County auditor's office was a year late distributing $1.4 million in property tax relief to the county's taxing districts.

"The money was there, but action wasn't taken, for some reason," Martinson said in the Oct. 27 article. "We're going to have it (the funds) all labeled and ready to go with other remittances on Nov. 8, so it will finally be in the districts' coffers."

The delay meant taxing districts - including highway districts, cities, fire districts and North Idaho College - didn't get some due property taxes they could have used to provide services.

Few, if any, noticed the missing money.

Martinson couldn't pinpoint just what went wrong, the article reported.

Every year, the state provides property tax relief, paying property taxes on behalf of low-income individuals who didn't cover it themselves.

The relief funds enter Kootenai County's system twice a year, Martinson said. It's up to the auditor's office, where she worked, to send the money along to the taxing districts, along with other property taxes.

The tax relief for 2008 simply sat in the computer system and wasn't distributed.

There is no way for taxing districts to know if the tax relief funds are missing, Martinson said, as those are lumped in with other property taxes - not listed as a separate line item.

The county has distributed property tax relief for more than 35 years, she added, with no problems before.

There won't be any again, she assured.

"We may stumble once in awhile, but we always learn from it," she said.

On Wednesday, English said there was no relation between the late distribution reported in October and the ongoing embezzlement investigation.

"But she was responsible to get those payments out in a timely way," he said.

On Oct. 30, the Press reported another failure by the Kootenai County auditor's office to distribute tax revenue to county taxing districts.

Because of an employee's oversight, the county failed to distribute a total of $151,000 in what it called "yield and deferred taxes" to taxing districts from 2006 through 2009.

A county staff member had held off on calculating yield and deferred tax distribution manually, waiting for a computer program to be updated to do the calculations.

The taxing districts affected include school, highway, and fire districts, as well as county emergency medical services.

Also in that case, English said there was no connection at all between that tax-distribution mistake and the current investigation of Martinson.

The last few months have been a very tough time, with the two taxing mistakes and now the investigation of his chief deputy, English acknowledged.

His credibility has taken a hit, he said, as has the office's.

"I still feel like I've done a good job overall," English said.

The clerk-auditor position is a big job, he said.

"It's a very wide-ranging set of responsibilities that aren't logically connected," English said. "That's why I've had to rely on my staff and department heads."

Cliff Hayes was elected in November as the new clerk, and he takes office Jan. 10.