The St. Clair Fire Protection District will keep moving forward after former Chief Eric Hinson was indicted on fraud and multiple tax evasion charges on Wednesday, Jan. 9, involving his alleged misuse of about $593,236 of district funds between January 2006 and September 2011.
The U.S. Attorney’s Office for the Eastern District of Missouri released information on the indictment Wednesday afternoon.
Hinson, 43, who lives just outside the St. Clair city limits, was indicted by a federal grand jury on Wednesday on one felony count of mail fraud and five felony counts of tax evasion.
If convicted, mail fraud carries a maximum penalty of 20 years and a fine of up to $250,000. Each count of tax evasion carries a maximum penalty of five years and a fine of up to $100,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
“Actually, this is a relief,” board Treasurer Dave Berkel told The Missourian on Thursday morning in commenting on the case. “It’s been such a long, ongoing investigation and we’ve been unable to say anything so not to endanger the investigation.
“It’s good to see the case is working toward closure.”
Berkel said the Internal Revenue Service told him Hinson was expected to surrender to authorities by Friday. He did not attend his grand jury hearing on Wednesday.
District firefighters and personnel met at House 1 in St. Clair on Wednesday night as information about the indictment was shared.
“There were mixed emotions about it,” Berkel said about discussing the indictment at the informal meeting. “Of course, they all wanted to know what was coming next and where we go from here. There are still a lot of questions. We’re just trying to explain it all to them.”
Throughout the ordeal, however, the fire district continued to serve its patrons.
“In no way, shape or form has service provided by the district suffered,” Berkel said. “We got through last year with the money we had from 2012. We did such a good job of controlling our money and expenses. We were very careful.
“We now can breathe a little sigh of relief.”
District Lt. Jason Hatley told The Missourian on Thursday that the local firefighters did not have “any part of or knowledge of the alleged actions of Eric Hinson.
“We are sickened over this event as it has tarnished our reputation and relationship we have with our public,” said Hatley, who also represents the Professional Firefighters of Eastern Missouri, Local 2665. “When this event was first reported, we vowed that the services we provide would not be interrupted or affected in any way.
“We are still as dedicated to the safety of our taxpayers as we were before. ... When you need us, we will be there.”
Last September, it was revealed that only Hinson was involved in the investigation.
The St. Clair Fire Protection District primarily is funded by public funds, through real estate tax, personal property tax and sales tax.
Hinson began with the district as a volunteer firefighter in 1985, was elected to the board of directors for the district in 1997, and as treasurer of the district in 1999. In January 2011, he became the fire chief for the district while continuing to perform his duties as treasurer until his resignation as chief on Sept. 28, 2011.
The investigation into the misappropriation of funds started at the same time as Hinson’s resignation.
As treasurer, Hinson was responsible for preparing the annual budgets, facilitating the annual financial statement audit, gaining approval from the district’s board of directors for expenditures, reconciling bank statements and performing other accounting-related activities in the QuickBooks general ledger system other than for payroll. He also had the ability to access the QuickBooks system remotely from outside the district offices.
According to the indictment, Hinson used the district credit cards to pay for family vacations to Hawaii and Florida, to pay for personal items such as sporting goods and other items, limousine rentals, tickets to Six Flags, Big Surf Water Park and other entertainment expenses, restaurant meals, gasoline and hotel rooms, as well as to obtain significant cash advances.
Without the knowledge and authority of the district, Hinson directed that these personal credit card charges be paid with district funds. Further, on several occasions, according to the indictment, Hinson wrote district checks to pay for his own personal expenses, including checks to Ford Credit for a pickup truck, to Macy’s for furniture, to John Deere Credit for tractor parts, and checks to Bank of America and Fifth Third Bank for other personal expenses.
The indictment states that in order to conceal his scheme, Hinson accessed the district’s QuickBooks to alter reported general ledger activity by backdating certain of his fraudulent transactions and by changing the payee in order to manipulate the district’s accounting records so as to hide the existence of his fraudulent transactions. Through his fraudulent conduct, Hinson obtained about $593,236 from the St. Clair Fire Protection District.
Additionally, the indictment alleges that Hinson filed false tax returns for five years, 2006 through 2010, underreporting his taxes during those years in a combined amount of about $400,000.
This case was investigated by the Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation. Assistant U.S. Attorney Hal Goldsmith is handling the case for the U.S. Attorney’s Office.
He would not provide comment to The Missourian on the case.
“Since this is in the allegation stage, there is no comment beyond what is contained in the charging documents,” said Jan Diltz, public relations officer for the U.S. Attorney’s Office.
John Nunez, public information officer for IRS Criminal Investigation, also did not provide any comment.
The fraud investigation into the misappropriation of funds conducted by BKD CPAs and Advisors of Kansas City, which was completed in September but not available for release until after the indictment was issued, revealed a $410,933 total. Berkel said on Thursday he did not know why there is such a difference in that amount when compared to the $593,236 listed in the indictment.
“I will be interested to see where the extra money was found,” Berkel said. “It’s interesting that even the audit company didn’t catch everything.”
The press release announcing the indictment stated that as is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.