(MARTINSVILLE) - Former Martinsville City Court Clerk and Washington Township Bookkeeper, Cathy Neal, pleaded guilty Friday afternoon in Morgan County Superior Court III to one count of failure to deposit public funds as a class D felony.
Neal, 65, also pleaded guilty to conversion as a class A misdemeanor.
Under a plea agreement, Hendricks County Superior Court III Judge Karen Love, who was a special judge in the case, sentenced Neal to three years in jail on count one, which she suspended except for 60 days to serve. The plea agreement allowed the judge to impose a jail sentence of up to 90 days, but the judge said since Neal had no previous criminal history, she imposed the 60-day sentence. The judge allowed Neal to report to the Morgan County Jail on June 18 and with "good time" credit, she will be released July 17. After she is released from jail, Neal will serve 270 days on home detention. The judge put Neal on probation for two years. As a condition of the plea agreement, Neal will pay $35,569 to the Martinsville City Court in restitution.
On the conversion charge, the judge sentenced Neal to 60 days, which will be served concurrent with the sentence from count one. She will also have to complete 300 hours of community service.
The plea also ends any additional criminal actions by the state regarding the results of an unspecified audit.
If Neal successfully completes her probation, she may apply to the court to have her felony conviction reduced to an A misdemeanor.
Before being sentenced by the judge, Neal attempted to read a statement. She became emotional and had her attorney, William VanDerPol, read it.
In her statement, Neal said she had a deep regret for her actions and that she never intended to defraud anyone.
"I kept good records," she said. "I violated my principles by my actions.
"I caused hurt to my friends and shame to my family. I take full and complete responsibility for my actions."
Neal said the reason she took the money was because of a "bad family situation."
The judge said while Neal has no previous criminal history, there was a violation of trust.
After sentencing, special prosecutor James Oliver, who is the prosecutor in Brown County, said it was important that Mrs. Neal serve jail time.
"Everyone needs to know that people entrusted with public funds cannot take the money for their personal use," he said.
Oliver said it was important to note that she took responsibility for her actions and is repaying the money. "She admitted her actions to investigators," he said.
VanDerPol declined to comment on the case.
Morgan County Prosecutor Steve Sonnega requested a special prosecutor in April of 2011 after an audit by the Indiana State Board of Accounts for 2010 and three months of 2011 showed that all deposits for the court had not been made. The state had completed a routine audit of the court when the problem was discovered. City Court Judge Mark Peden removed Neal from her position as clerk of the court.
Neal was the bookkeeper for her husband, John Neal, when he was the Washington Township trustee. She continued in that position when Scott Manley became the trustee. At that time, Manley was married to Neal's daughter. Manley and Neal's daughter have since divorced.
After the problem was found in the city court, Manley requested Neal's resignation.
In September, the Indiana attorney general filed a lawsuit seeking restitution from Neal and the companies that bonded her. The attorney general is asking the court to order Neal, the Fidelity and Deposit Companies, EMC Insurance Companies and The Travelers Companies to pay $49,835 to the state. That amount included the missing money plus the cost of the audit.
In December, the SBA released a report showing that while she was the bookkeeper for Washington Township, the pay records for Neal and her daughter, Melissa, disappeared. The state could not find any records they had done work for the township. Neal was asked to repay the $25,522 she received for work for which no documentation was found. Neal received a salary of $9,900 for being the clerk. Her daughter was asked to repay around $18,700 she received in 2010 because there was no paperwork found documenting the hours she worked or the job she was suppose to have done.
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