Hermantown police investigating possible fraud with members of parent-teacher group

The possible fraud case involved funds provided to Hermantown students.

HERMANTOWN, MN — The Hermantown Police Department is investigating a possible fraud case.

The claim came from the chairperson of a nonprofit school fundraising group and was against members of that group.

The Parent Teacher Organization (PTO) raises funds for teachers and students at Hermantown Elementary School. Now, police are investigating allegations that thousands of those funds may have been taken by a member of the group.

On September 22, the PTO President contacted the Hermann Township Police Department. The president said funds were missing from PTO bank accounts, not just change. She told police more than $43,000 was stolen.

A written statement from the Hermantown PD said in part:

According to the whistleblower, there have been 369 cases of personal theft and overdraft in the past three years. The 42-year-old suspect wrote himself 31 checks totaling 43,000…$638…and 50 cents. Another $59,000 was stolen in the form of debit card purchases and cash withdrawals.

According to Principal Wayne Whitwam, while the PTO is not directly affiliated with Hermantown Elementary, it does work closely with the school.

Whitwam provided us with a written statement, which reads in part:

The District is aware of allegations of corruption within the elementary PTO. We are cooperating with law enforcement. As the police are investigating…we cannot disclose any details.

As for the PTO group, it is currently on hold. Whitwam said all fundraising activities have been suspended and the PTO has frozen the relevant bank accounts until the investigation is concluded.

Herman Township police said they went to the suspect’s home days after receiving the report and demanded a statement from her. The woman said she wanted to speak to her attorney, police said.

The incident is still under investigation. Whitwam said the school will provide updates as the cases progress and as the law allows them to do so.

The PTO chair told the Hermantown Police Department that she and three other team members discovered the missing funds while sifting through past account statements. They continue to separate valid purchases from theft and overdrafts resulting from theft, the president said.

Late Tuesday, the Hermantown PTO chair released a letter to parents and staff. The full letter follows.

Dear Parents and HES Staff,

As Hermantown School’s fifth Parent Teacher Organization (PTO) President, I would like to address recent revelations about the devastating so-called “theft” of our organization. I realized a problem when some of our checks bounced, so I stopped at the bank to get a statement. That same afternoon, when this issue came into focus, I stopped by the Hermantown Police Department to begin filing and reporting suspected crimes. From there, the principal and superintendent were notified. Over the next week, our newly appointed Treasurer, our school’s Co-President (VP) and I spent hours working through the mountain of paperwork to hand it over to the police, who are now handling the ongoing investigation .
Many of you, like we on the PTO committee, are asking, “How did this happen?”
All members of the PTO Board and Committees are volunteers. As a Board, we succeeded the outgoing Board in 2018, following the same process as in the past. Although each board member has a full-time job and a family, we devote countless hours of our free time to our assigned responsibilities, and we do so because we want to make a difference in our communities.

Many of us have lost sleep and cried tears of anger over betrayal, and we all know it. Not only has this thing left us without money to operate, but all the programs (anti-bullying efforts, staff appreciation, backpacking programs, etc.), student scholarships, and teacher supplies that we no longer need can be detrimental to schools, teachers, and our kids negatively impact the community as a whole. We are all victims.

Your next question will likely be “How will you make sure this doesn’t happen again?”
A great leader will steer the ship through the storm, and that’s what I’m committed to doing. I will not shy away from this challenge, and with the help and support of you as parents, school staff, and the community that has generously supported us, the board and I will rebuild. The current Board of Directors have all put in extra time, effort, and determination to ensure we get through this event. New checks and balances that will safeguard the organization going forward:
• When the bank opened the morning after the incident was discovered, the old checking account was closed and a new checking account was opened.
• Ordered new dual signature checks.
• A monthly board meeting will review the monthly bank statements.
• Mobile app alerts for all credit/debit card charges have been set up for the President and incoming Treasurer.
• We will add embezzlement coverage to our PTO insurance plan.
Where do we go from here?
Unfortunately, my cliché is very true for this one: hindsight is always 20/20. I’m one of those people who always looks for good in others. If you’ve met me, you know I’m an optimist, which is why I believe the community is stronger than the selfish actions of one individual. The board and I will work to right this ship, and we appreciate your support as we work together to replenish our resources so we can continue to be an asset to our school and our community.
Cindy Lewis (formerly Frick)
President of PTO

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