Here's how Vanderburgh prosecutors zeroed in on My Goals nonprofit spending

EVANSVILLE — Eighteen days after Regene Newman announced her 2021 departure as then-Vanderburgh County Prosecutor Nick Hermann's finance director, Hermann's nonprofit for at-risk youth closed a checking account packed with questionable expenditures.

It opened a new one at the same bank four months later without telling Newman's successor about the account that had been closed, current Prosecutor Diana Moers told the Courier & Press.

Newman was secretary, checking account co-signer and registered agent for the nonprofit, now-dissolved My Goals Inc. After her departure, My Goals made none of the large cash withdrawals and expenditures on women's clothing stores, beauty retailers, out-of-town shopping sprees and other questionable expenditures that had filled its previous bank account's statements.

It did make three large charitable donations from the new account.

The bank activity is documented in Evansville Teachers Federal Credit Union statements obtained by Moers and provided to the Courier & Press upon the newspaper's request.

More:Vanderburgh County Prosecutor Nick Hermann gave $25k in public money to nonprofit he runs

Moers, who succeeded Hermann in January, thinks Hermann was keeping a secret from Newman's replacement when they opened the second ETFCU account together on July 28, 2021. That was four months after the first account was closed on March 22. Newman's resignation letter was dated March 4, according to the prosecutor's office. She is now business director for Vanderburgh County Community Corrections.

"(Newman) leaves, a few months go by, and Nick walks (deputy prosecutor Jay Newton, who succeeded Newman as the prosecutor's office's finance director) across the sidewalk to the credit union and says, 'Hey, we're going to open up a new account here, it's more convenient,'" Moers said.

"Notably, he did not tell Jay about the old (ETFCU) account."

Moers, who prosecuted financial crimes for the Indiana Secretary of State's Office from 2010 until 2015, has her suspicions.

"Did someone not want Jay to see what was in this (first ETFCU account)?" she said. "There would be no reason to open up a second (checking account) at the same bank and not mention the previous one."

Spanning March 2016 through March 2021, banks statements for My Goals' first ETFCU checking account are dotted with more than $14,000 in 71 ATM and bank withdrawals. They also show thousands of dollars in purchases at fast food restaurants, women's clothing stores, hair salons and beauty retailers, convenience stores, pharmacies and supermarkets and in out-of-town shopping sprees.

It's impossible to tell from bank statements whether Hermann or Newman personally carried out the transactions. Then-Evansville Police Department Detective Brian Turpin signed on as a bank account co-owner a few weeks after Hermann and Newman did.

Newman and Turpin have not returned messages about My Goals, but Hermann issued a statement Friday afternoon saying his office discovered "a pattern of unauthorized expenditures and withdrawals" in My Goals bank records last year and requested a full criminal investigation.

"It is important that detectives be allowed to conduct their investigations based on facts and evidence," Hermann wrote.

Walking a tightrope

The Downtown branch for ETFCU (now branded as Liberty Federal Credit Union) is a stone's throw from the courthouse where Hermann and Newton prosecuted accused criminals together in the same office for a decade.

Moers said she learned from Newton that My Goals' very first account after its creation in 2011 was held at Crane Credit Union. She has not yet obtained bank statements from that account, which would also have been held at a time when Newman was the nonprofit's secretary and Hermann's office finance director.

Newton, who had not been involved in My Goals or the prosecutor's office's financial affairs before 2021, said he assumed Hermann's "more convenient" remark was a reference to whatever bank My Goals had been using — not the previous ETFCU account packed with questionable expenditures. He's not sure exactly when he realized that account ever existed — but he doesn't remember Hermann telling him about it the day they walked over to ETFCU.

More:Questions remain about Vanderburgh Prosecutor Nick Hermann's nonprofit

Newton recalls that he didn't even know what My Goals was when he assumed Newman's duties.

But Newton — now not just Moers' finance director but her chief of staff and a deputy prosecutor as well — is not critical of Hermann, as is his new boss. Newton was hired by Hermann and then worked for him for 10 years. Moers defeated Hermann in a Republican primary election last year. Part of her campaign's rationale was that he needed to be replaced.

Newton walks a tightrope discussing his former boss.

No, Newton doesn't remember Hermann ever telling him about the ETFCU checking account that was filled with questionable expenditures.

"But (Hermann) might remember it differently if he talks to you," he said.

'Oh, crap'

Newton recalls that he and Hermann went to ETFCU in July with a $5,000 check in hand — he doesn't remember where the money came from — to buttress the $1,983.36 the original ETFCU account held when it closed on March 22. Newman had announced her intention to resign on March 4, but her resignation wasn't effective until April.

Bank statements show the new ETFCU account opened on July 28 with $6,983.36 — the original balance plus the $5,000.

A month later, $10,000 went in and $10,000 went out in a charitable donation to Sleep in Heavenly Peace, a national nonprofit that says it is "dedicated to building, assembling and delivering top-notch bunk beds to children and families in need."

Newton acknowledged Hermann asked him to take the $10,000 from forfeiture funds, which come from the seizure of cash, cars, real estate and other assets from suspects. Seven months later, the Courier & Press would report that Hermann's office made five separate payments of $5,000 from its forfeiture fund to My Goals between 2018 and 2020.

Hermann pointed out at the time that Indiana code allows prosecutors to set up, staff and support a "youth mentoring program" such as My Goals. The statute says prosecutors may "receive and expend charitable contributions, appropriations, and federal, state, local, or private grants" for the organizations.

But the newspaper reported that Indiana Prosecuting Attorneys Council guidelines for spending forfeiture money didn't specify giving to nonprofits as an allowable use, and Evansville Police officials said they didn't give forfeiture money or any public money to their affiliated nonprofits.

Newton remembers thinking: "Oops."

"I had seen where that had been done prior, numerous times, and I had no reason to believe that wasn't proper," he said. "I remember reading (the Courier & Press) article and thinking, 'Oh crap, I know I did that at least once."

It hasn't happened since then, Newton said, and county auditor's records support that. But then, the auditor doesn't show in its records the $10,000 transfer of forfeiture funds to My Goals that Newton mentioned, either. He said he did send the necessary paperwork.

My Goals would go on in the last weeks of 2021 to kick in $5,000 for law enforcement's "Say Boo to Drugs" Halloween event at Bosse Field and $2,500 to the Hadi Shriners Transportation Fund for patients and their families. There were no cash withdrawals, shopping sprees or expensive trips to nail salons or beauty retailers.

Newton is proud of those donations, though he acted as a financial officer and not a decisionmaker.

"That was me," he said.

Looking ahead

Enter Moers, who took office in January.

Newton recalls that about 10 months earlier, when the Courier & Press published the first in a series of stories about the forfeiture money Hermann's office had given to My Goals, he and then-Chief Deputy Prosecutor Kevin McDaniel realized they needed to look at the nonprofit's records. But they didn't have the bank statements Moers would eventually get from ETFCU.

They asked Newman, who had left the prosecutor's office a year earlier, to produce them.

"It took a little while to get those," Newton said.

Newman eventually dropped off some records. Newton thinks some of them might have come from the earliest My Goals bank account at Crane Credit Union.

One look, Newton said, and he and McDaniel knew there was a problem.

"It didn't take long for us to realize that it didn't look right," he said.

McDaniel didn't return messages seeking comment, but Evansville Police Chief Billy Bolin told the Courier & Press that a police financial crimes investigator last year steered McDaniel to the FBI about suspected misappropriation of funds by My Goals. Hermann wouldn't confirm on Friday that his office approached the FBI.

Upon taking office in January, Moers said, she was determined to find out for herself what had happened. After all, Hermann said a year ago that My Goals was "not my charity" and "something that our office runs."

Because the prosecutor's office didn't have online access to the nonprofit's previous ETFCU account, Moers went personally to bank offices to get as many of My Goals' financial records as she could. She walked away with stacks of hard copies.

My Goals may be administratively dissolved, but for the moment its current checking account at ETFCU sits with $4,582.98 on hand, the same amount it had at the tail end of 2021 when the nonprofit cut its $2,500 check to the Hadi Shriners Transportation Fund.

"No activity this statement period," the ETFCU monthly statements now say.

Moers said she will give the $4,582.98 to a charity yet to be named.

"It will be a local non-for-profit that has business directly correlated to the office — such as helping crime victims," the prosecutor said.

What about forfeiture money? The Vanderburgh County prosecutor's share of a forfeiture fund that's split among local law enforcement was $76,122 in 2021 and $81,473 last year. That money will be spent in ways "directly related to the office needs" too, Moers said.

"It's really important for me to sort out the issues so we can move on and focus on what we are here for," she said.

This article originally appeared on Evansville Courier & Press: Here's how Vanderburgh prosecutors zeroed in on My Goals nonprofit spending