'This theft is damaging.' Ex-Covington employee sentenced for stealing city money

When a former administrative manager in the Covington Public Works Department was charged last year with wire fraud and identity theft, it wasn’t the first time she had been caught misusing city credit cards, court records show.

Allison Donaldson was sentenced Friday morning in federal court in Covington to three-and-a-half years in prison followed by three years of supervised release, according to the U.S. Attorney’s Office for the Eastern District of Kentucky.

Donaldson pleaded guilty in April to a single count of wire fraud and one count of aggravated identity theft, court records show. Prosecutors agreed to drop six other counts as part of her plea agreement.

For at least two years, she used her city-issued credit card and her coworkers' credit card information to fund nearly $185,000 in personal expenses, prosecutors say, including a Chanel leather tote bag, repair work for her Mercedes Benz and remodeling work for her master bedroom and garage.

Donaldson “traded public services for personal extravagance,” prosecutors wrote in court filings.

Court records show Donaldson had been employed with the city since 2005. In her position, she received the receipts for items Covington employees bought with their city-issued credit cards as well as monthly credit card statements.

She was also in charge of uploading corresponding receipts to the city’s online bookkeeping system to process credit card statement payments, prosecutors said.

Donaldson fabricated receipts to make it seem her buys were for legitimate government expenses and forged documents to make it look like some of her purchases were made by other public works employees and approved by a supervisor, prosecutors said. She then uploaded those receipts into the bookkeeping system to be paid for by Covington as part of its monthly statement payments.

Harry Hellings Jr., Donaldson’s attorney, was unavailable for comment Friday afternoon.

Hellings wrote in court filings that Donaldson agreed at the outset of the investigation to cooperate with the city to determine the total amount lost and pay restitution after that amount was tallied, which she eventually did.

“At no time did Allison cause, or mean to cause any personal financial harm to these individuals while using these credit cards,” Hellings wrote.

In a victim impact statement submitted to U.S. District Judge David Bunning, Covington Mayor Joseph Meyer wrote that Donaldson was previously found to have abused the city’s credit cards and manipulated its invoice system in 2012.

She acknowledged at the time that she entered personal invoices to be paid for with city funds, the mayor wrote, adding that a series of invoices she entered for payment by the city lacked proper documentation and there were other "irregularities" found in her management of the city's purchase system.

Donaldson entered into an employee improvement program and agreed that personal billing records should be kept separate from city records, according to Meyer.

She isn’t the first Covington employee to be prosecuted for stealing city money.

Bob Due, the city’s ex-finance director, was sentenced in 2014 to 10 years in prison for a decade-long embezzlement scheme in which he stole $793,000.

“ln 2012 the city leadership did not take action sufficient to deter Donaldson's conversion of public funds to personal profit,” the mayor wrote. “Even after the 2012 disciplinary action and after the 2013 discovery and prosecution of the City Finance Director, Donaldson resumed stealing public money.”

Meyer wrote that changes to the city’s software systems, a lack of credible recordkeeping and the cost of recreating years-old financial records make it impossible to know the full extent of Donaldson’s thefts.

“A second major theft of City funds in less than a decade is more than enough reason for our citizens and the general public to question the city's trustworthiness and competence to manage the public purse,” Meyer wrote. “This theft is damaging.”

This article originally appeared on Cincinnati Enquirer: Feds: Ex-Covington employee used city credit cards for 'extravagance'