TRIPP — On Dec. 27, Jennifer Friederich gave the city of Tripp $555,759.73, the equivalent of about 75 percent of the city's 2019 budget, or enough to pay every resident more than $875.
Friederich, a former finance officer for the city, was sentenced to three years in prison for embezzlement, forgery and altering public documents on Monday, and the money returned to the city in December, provided in part by her family's farm being borrowed against itself, was the total restitution amount agreed upon in Friederich's case based on findings from the South Dakota Department of Legislative Audit (DLA) and negotiation by counsel.
Mayor Vic Olson said in an email to The Daily Republic that the city of Tripp has been working with the DLA since investigation into Friederich began and that all of the department's concerns have now been addressed. Tripp is now using new financial management software, Olson wrote, and bills, invoices and other transaction-related paperwork, including statements for the city's credit card, are being reviewed.
"It is easy to identify what happened in this case with one word: embezzlement. However, what really took place was much more complicated," Olson said. "This was not a crime where someone simply wrote a check, absconded with cash or misappropriated funds. This was a sophisticated scheme that included forgery, record destruction, deception and falsification of accounts."
In November 2018, the DLA compared statements provided by BankWest to those Friederich had supplied and determined that Friederich had submitted altered statements, and the city was making large payments to a credit card account.
A special review by the DLA completed in August found that, using the city's BankWest account, Friederich paid herself $132,831.01 in excess payroll checks between November 2011 and December 2018 and had used bank card checks to charge $237,184.53 to the city's credit card for costs not related to city expenditures.
Additionally, the DLA found $18,814.82 in inappropriate payments made from the city's bank account to credit card accounts, $6,539.43 in unsupported charges to the city's credit card and $5,679.06 in excess of authorized payments for wireless phone services, and the city had to pay $6,035.64 in interest on cash advances and $5,611.56 in convenience check fees.
The special report found that from 2017 until Friederich's resignation on Nov. 20, 2018, about $1,000 in cash was deposited into the city's bank account annually. In the four months following her resignation, an average of $1,389 was deposited per month. While the report concludes it's likely a large amount of cash collected by the city didn't make it into the bank account during Friederich's tenure as finance officer, it states that the total amount missing cannot be determined because accounting records were altered and there was a lack of detail on the cash deposit slips.
"This type of crime is happening everyday not only in government, but also in the private sector," Olson wrote. "Unfortunately, as soon as you think you have plugged any holes in a system so that things like this cannot happen, someone will find a new hole."
Olson said that while the loss of funds did put strain on the city, because the embezzlement was spread out over the years, Tripp was still able to work on major projects while Friederich was stealing money, though funding for those projects came primarily from loans.
"For many years the city, along with a number of our non-profit organizations, put their trust in an individual that took advantage of that trust by stealing funds dedicated to supporting the community," Olson said. "By reviewing our processes and implementing the DLA’s suggestions, the city hopes that it can move forward and continue to be what Tripp has always been — a great place to live, work, and raise a family."