Eric Hinson Suspicions Started in Early 2011 - The Missourian: Saint Clair

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Eric Hinson Suspicions Started in Early 2011

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Posted: Wednesday, May 8, 2013 8:30 am | Updated: 7:32 pm, Sat Jun 22, 2013.

St. Clair Fire Protection District Office Manager Anna Marie Short started getting suspicious about financial matters relating to Eric Hinson in February 2011, or about one month after he was appointed the district’s chief and had resigned as treasurer.

During the next eight months, she and then-newly appointed board Treasurer Dave Berkel started digging and slowly uncovered Hinson’s financial misappropriation scheme that ended up totaling almost $600,000 in fire district funds over a six-year period.

Hinson, 43, pleaded guilty in February of this year to one felony count of fraud and five felony counts of tax evasion. A month earlier, he was indicted of the fraud and multiple tax evasion charges involving his alleged misuse of about $593,236 of district funds between January 2006 and September 2011.

Hinson is awaiting his sentencing in U.S. District Court. It is scheduled for June 13.

Short, who has been the local fire district’s office manager for nine years, provided details to board members during a recent meeting of her and Berkel’s personal investigation process that led to Hinson’s resignation as chief, the subsequent formal investigation into the financial irregularities within the department and to Hinson’s eventual indictment and guilty plea.

First Suspicions

Short told board members that when Hinson was the district’s treasurer, “I only did payroll and did not handle any of the district’s other financial matters with the exception of a volunteer account that keeps minimal funds in it.”

She said that she and then-Fire Chief Tim Wideman were the only signers on that account.

When Hinson was appointed chief in January 2011, he had to give up his board treasurer position. Berkel was named as his replacement, but Hinson said he still wanted to be in charge of certain financial processes within the district.

Short said that in February 2011, Hinson “insisted” that volunteer checking account be closed. That account, Short said, was used similarly to a petty cash account.

“He asked me to write a check to him from the account to close it out and he would deposit it in the bank,” Short said. “I told him we had to wait to make sure any outstanding checks were cleared before we could do that.”

That request coupled with Hinson’s firing of the district’s accounting firm a few months earlier led to Short’s first suspicions. Short said at the time Hinson had said the district was not required to have a yearly audit.

“That is when I started to get suspicious about certain things,” she said.

Short said she closed that account in March 2011 and deposited the money from it into another SCFPD account.

“In May, Eric called me to get a voucher for boots ... so they could get boots for his (youngest) son who is on the junior department.”

Short said she informed Hinson that another member of the fire department handled vouchers and that individual was out of town at the time. She also said she questioned Hinson about the voucher because to her knowledge, those monies could not be used for junior firefighter supplies.

“I was told by Eric that he was the chief and I was to do as he said,” Short said. “I asked him, ‘Are you telling me to get into (another employee’s) desk drawer and get a voucher for boots,’ and he said ‘yes.’

“I told (the other employee) about the incident when he returned to work, and we spoke about watching for a bill to come and see who pays for the boots.”

Short continued.

“That incident got me to thinking about the cash collected over the years from the sale of district T-shirts and ball caps. I always kept a spreadsheet and inventoried all of the clothing items. I would print out the spreadsheet and give it along with the cash to Eric at the board meetings to be deposited.

“With my suspicions raised, I started going through QuickBooks to see if that cash had been deposited over the years. I could not find that it had been deposited.”

Confirmed Suspicions

In the following months, Short said Hinson did other financial-related things that also raised her suspicions, so she continued to do some checking.

In July 2011, “I printed out a general ledger from QuickBooks to look for the boot money,” she said. “In a matter of minutes, I received a call from Eric asking if I had printed a custom report. I knew then that there was definitely a reason to dig deeper.”

On Sept. 11, 2011, Short said she ran a second QuickBooks custom transaction detail report from Jan. 1, 2004, to Sept. 7, 2011. Originally, it was thought that maybe Hinson had misappropriated about $6,000 to $7,000.

“I contacted Dave Berkel, and he came in on Sept. 7,” Short said. “I explained to him that I knew Eric was taking money.”

Over the next couple of weeks, other transactions were questioned as Hinson’s activities were monitored.

When Hinson’s access to QuickBooks was terminated on Sept. 21, Short said he immediately called and asked why he couldn’t gain access to the program.

“He sounded very irritated,” Short said. “I asked him what was going on and he said nothing was going on. Then he started to get upset and sounded to me like he was crying. I asked him if he had done something he shouldn’t have, and he said ‘no.’”

A couple of hours before the fire district board meeting that night, Short said she noticed additional abnormalities on QuickBooks and that she couldn’t find certain transactions. All of Hinson’s access privileges to the district’s computer system then were terminated.

An emergency board meeting was called for the next day, Sept. 22.

“Eric called me that morning and was asking what I thought about why Dave (Berkel) shut him out of everything,” Short said. “I told him I wasn’t sure, but that if he didn’t do anything wrong it would all be cleared up.”

She then said Hinson came to the office that afternoon.

“He put his arm around me, hugged onto me and asked that I support him on whatever he has to say in the board meeting that evening,” she said, adding that the two had another conversation the next day, Sept. 23.

“He stated to me that without his chief’s pay from here, they could not pay their bills. ... He stated that the worst thing he had done was step down from the treasurer’s position on the board and let Dave Berkel in.

“He kept going from being mad to upset during our conversation.”

Short then said that she saw Hinson at the next board meeting on Sept. 28. During that meeting, the formal investigation into the financial irregularities was launched, and the board also accepted Hinson’s resignation.

That investigation led to the report that disclosed the $593,236 in misappropriations. It also stated that Hinson was the only individual involved in the investigation that was spearheaded by the U.S. District Attorney’s Office and the Internal Revenue Service.

“I have not seen, spoke or heard from him since,” Short said.

Official Investigation

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 that came after the formal investigation, the misappropriation of funds scheme went much deeper than anyone first suspected. It stated that 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 fraudulent transactions and by changing the payee in order to manipulate the district’s accounting records.

Through his fraudulent conduct, Hinson obtained about $593,236 from the St. Clair Fire Protection District, the indictment states.

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.

He was earning $25,000 annually as the part-time chief of the SCFPD.

Hinson also served as chief of the Ladue Fire Department. He resigned from that position last year.

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