Sentencing in Oklahoma Beef Council embezzlement case
Former Oklahoma Beef Council employee Melissa Day Morton, Edmond, Oklahoma, received a sentence of 57 months in federal prison Jan. 4 for her conviction of bank fraud and filing a false federal income tax return, according to reports. She will receive five years of supervised release after her prison sentence, and was also ordered to pay restitution to the OBC of $2.3 million. According to federal law, she is required to serve at least 80 to 85 percent of her sentence.
“While there is no sentence that would truly rectify the harm these crimes have done to our organization and to our producers, we are satisfied knowing we have done everything in our power to cooperate with Federal authorities to seek justice,” said Angie Meyer, chairman of the OBC, in a statement following the sentencing.
On May 24, 2017, Morton pleaded guilty to bank fraud and signing a false federal income tax return in connection with the embezzlement of $2.6 million from OBC. She was charged by information with one count of bank fraud and one count of filing a false federal income tax return.
From October 1995 to late July 2016, Morton worked as the accounting and compliance manager at the Oklahoma Beef Council in Oklahoma City. As part of her job, Morton prepared checks, paid invoices and generated financial statements for audits.
Details of her plea include preparing an unauthorized company check, in the amount of $5,652.25, made payable to herself in February 2016. She admitted forging the signature of the OBC executive director on the check and later presented the check for payment at a local bank. She also admitted embezzling funds from the OBC from 2009 to 2016, the total loss from the scheme reaching $2,681,400.73.
Morton also pleaded guilty to signing a false tax return, omitting on her 2014 return more than $388,000 of embezzled income for that year from the OBC.
In December, the OBC also filed a lawsuit in the District Court of Oklahoma County against the Edmond-based accounting firm Arledge & Associates, P.C. The lawsuit alleges that Arledge was the accounting firm engaged to perform audits of OBC for fiscal years 2012-2015, and for each audited year, Arledge issued clean, unqualified opinions that the financial statements presented fairly, in all material respects, the financial position of OBC. The lawsuit further alleges that after a thorough investigation, it became clear that Arledge’s audit opinions were incorrect and misleading, that Arledge had failed to reasonably and properly perform a risk assessment of OBC, that Arledge employed inadequate and flawed audit planning and testing procedures, and that Arledge failed to perform the audits in accordance with reasonable and applicable auditing standards. The lawsuit seeks to recover all damages caused by Arledge’s conduct.
In the statement, the OBC Board of Directors further expressed its continued regrets to the farming and ranching families it serves:
“As beef producers, the intangible harm of this former employee’s actions will be felt for some time as we work to rebuild the trust that was broken,” said Meyer. “It’s important to know the OBC has taken the key steps to ensure such a crime never happens again.”
According to the OBC, these steps include:
- Contracting with a third-party accounting firm with circulating accountants for all accounting services;
- Utilizing a five-step financial review process; and
- Instituting an Audit/Risk committee with an independent audit advisor to the committee.
Jennifer M. Latzke can be reached at 620-227-1807 or [email protected].