Former state treasurer employee charged with taking $750,000

Associated Press

Published Tuesday, April 1, 2008

SPRINGFIELD, Ill.---- A former employee of the state treasurer's office was accused Tuesday of embezzling $750,000 in taxpayer funds.

A federal grand jury indicted Debra Kirby on charges of wire fraud and money laundering, U.S. Attorney Rodger Heaton's office said. Prosecutors seek forfeiture of $263,408, the amount they claim she used for her own gain.

The 53-year-old Taylorville resident worked for the state treasurer from 1973 until she retired in May 2006. The three-count indictment claims Kirby transferred $750,000 to a bank account she created in October 2005.

Kirby earned $67,000 a year as the head of the division that handled payments between state agencies and banks. She allegedly created paperwork showing the Revenue Department requested return of an overpayment of $750,000. Instead, she allegedly transferred the money to her account, prosecutors said.

According to current Treasurer Alexi Giannoulias -- who took office in 2007 -- Kirby allegedly covered her tracks by replacing part of the money she took with $263,408 that Pekin Hospital had intended to pay the federal government but sent to the state. She allegedly repaid the balance of the $750,000 with a check from the account she created.

Giannoulias said his office discovered the discrepancy last fall and investigated the matter before alerting federal authorities.

A phone number for Kirby could not be located. Officials said no attorney had filed with the court to represent her. The court will issue Kirby a summons to appear in court later.

If convicted on all counts, Kirby could be sentenced to 20 years in prison.

Giannoulias said his office has created safeguards to prevent similar problems, including multiple layers of review and backup documentation before such transfers are authorized.