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Attorney Michael Varble Plans Civil Action on Behalf of Town of Beekman in Fraud Scandal

In a recent blog, we discussed Partner Michael Varble's work involving a local scandal in which former Town of Beekman comptroller Fred Knapp was accused of stealing nearly $400,000 from public funds to pay off personal debts. Attorney Varble – who also serves as Town Attorney for the Town of Beekman – has shared his insight on the case with many media sources and is currently involved in preparing a possible civil lawsuit to recover taxpayer money Knapp allegedly stole.

As Knapp faces criminal charges, many are raising questions over whether the fraud could have been prevented. A recent investigation by the Poughkeepsie Journalfound a number of warning signs that could have alerted Beekman officials to Knapp's ongoing scheme. A few interesting warning signs the investigation turned up include:

  • After Knapp became comptroller in January 2010, independent audits from 2011 and 2012 found that the town's bank accounts were not being reconciled on a monthly basis.
  • Auditors also reported that separate records for accounts payable and receivable were not being maintained.
  • The Town of Beekman had gone seven years without having its finances reviewed by state officials.

Although the Town officials have tightened check-signing policies – as Knapp had been writing checks to pay off his own debts – there are still concerns over who can be held responsible. As officials continue to investigate, the Town may sue auditors for failing to detect the fraud and Knapp for restitution.

Securing Justice on Behalf of Beekman

Attorney Varble shared his insight with the Poughkeepsie Journal by detailing Knapp's scheme of writing checks from Beekman's checking account to pay his American Express credit card debts. Varble also told the Poughkeepsie Journal that the town has filed a notice of claim against the accounting firm that audited Beekman's finances in 2011 and 2012, alerting them to the possibility of a malpractice action. The firm performed audits during the time Knapp was writing checks, but detected no illegal activity.

Attorney Varble is continuing to investigate the circumstances surrounding the fraud and whether it could have been prevented. He told the Journal that he plans on filing a civil lawsuit against Knapp on behalf of Beekman as soon as he receives bank records from the district attorney's office. Attorney Varble is as committed to securing justice in this case as he is for every client he represents at Michael R. Varble & Associates, P.C.