Delaware County Treasurer Accused of Mishandling Millions in Tax Dollars

John Dorer pleads innocent, makes bail, plans to return to collect spring taxes

By Rick Yencer

MUNCIE, INDIANA (NEWS) - Delaware County Treasurer John Dorer spent April 15 in jail, accused of mishandling millions in tax dollars, as spring property tax bills are mailed this week.

"I am doing good," said Dorer, shackled and dressed in an orange jumpsuit as he awaited a hearing Wednesday in Delaware Circuit Court 1.

The state charged Dorer with 47 counts of mishandling tax dollars, generally making late deposits, and ignoring state examiners' recommendations to clean up millions of dollars in bookkeeping errors.

There's a count of  theft besides a lawsuit filed by Delaware County Prosecutor Jeff Arnold to remove Dorer from office for his miscount.

 Arnold filed formal charges on Monday, got an extraordinary $400,000 bond to hold Dorer for 48 hours until defense attorney Donald McClellan got a hearing to reduce the bond and allow Dorer to go back to work until a jury decides his guilt or innocence.

"He is still the treasurer," said McClellan, 

Circuit 1 Judge Marianne Vorhees agreed to reduce the bond to $50,000 with a cash equivalent of $5,000 which Dorer posted after pleading not guilty. The trial on the case involving theft and misconduct is Aug.25.

Arnold also got Vorhees to seal the record including evidence of Dorer's alleged wrongdoing, although the state later released probable cause and the suit to remove Dorer from office after he was arrested.

The prosecutor merely said he followed the law in setting the bond, although McClellan said Dorer was surely no flight risk with family, a home and means in Muncie.

McClellan also pointed out 27 of the counts of failing to properly deposit public funds involved a single day's lapse. And he pointed out the theft amounted to less than $80.

Arnold quickly said he was not going try the case in a preliminary hearing.And he offered no other information about Dorer's failure to comply with state law or accounting procedures.

State law makes it a felony to fail to properly deposit public funds. That crime came up in numerous cases in government and schools where public funds went from one fund to another, earning interest for personal gain.

Indiana State Police, working to State Board of Accounts examiners, found numerous cases of Dorer making late deposits during the last four years. And Dorer telling employees not to talk with state examiners about an ongoing investigation also is cause for removal from office.

In one case, state examiners found Dorer deposited $11 million in public funs into an account at Merrill Lynch in 2010 State law only allows public funds deposited in an approved bank, and Merrill Lynch was not an approved depository nor FDIC insured.

The state also claimed Dorer failed to follow the directions and recommendations of examiners during 2010-12 and failed to reconcile account differences between his office and the bank.

A Dec. 31, 2010 reconciliation offered to the state included unidentified differences in excess of $5.4 million with numerous posting errors in the auditor's fund ledger and treasurer's cash books.

The state also accused Dorer of not giving them access to his books or records which amounts to an infraction under state law, causing a public official to forfeit the office.

Criminal charges over Dorer's misconduct has been pending in recent weeks after the state police conducted its investigation last year. The treasurer also was investigated for the theft of money at the Delaware County Fairgrounds, but the charges filed Monday do not include that theft.

As ironic as it was to have a tax collector in jail on tax day, Dorer will be responsible for sending out spring property tax notices this week to home and business owners besides farmers and other property taxpayers.

The treasurer's office collected over $83 million last year in property taxes that was distributed to nearly 40 taxing districts, including government, schools and other public service providers. 

Dorer, a Democrat,  has been treasurer since 2009 and was among the biggest local voter getters in 2012.