Ex-Princess Anne Town Manager guilty of felony theft

Update - Town recovers from insurance over $103,000

By Richard Crumbacker
Posted 5/12/21

PRINCESS ANNE — A Somerset County jury on May 12 found Princess Anne’s former town manager guilty of felony theft and theft scheme after more than $100,000 in cash was diverted from bank …

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Ex-Princess Anne Town Manager guilty of felony theft

Update - Town recovers from insurance over $103,000

Posted

PRINCESS ANNE — A Somerset County jury on May 12 found Princess Anne’s former town manager guilty of felony theft and theft scheme after more than $100,000 in cash was diverted from bank deposits for nearly two years starting in 2018.

Deborah K. Hrusko remains free on personal recognizance and will be sentenced following the completion of a pre-sentence investigation.

The 57-year-old Salisbury resident answered “No” when asked by her attorney and public defender Arch McFadden if she took any money from the town but had no explanation when State’s Attorney Wess Garner asked why there were no cash deposits made in 2019.

She also did not remember making changes to 170 payment entries on a Sunday in September 2019 — the day before the annual audit was to begin — despite being on the clock as noted on her timesheet.

As for over $43,000 in cash deposits made into her personal bank account in 2019 that was explained as cash from her children to pay for cars and insurance, cashed checks for personal loans, and occasional winnings from Ocean Downs Casino which she said she frequented.

Hrusko started working for the town in February 2009 as an accounts payable clerk, and moved up to finance administrator in May 2014. In August 2015 at the request of the Town Commissioners she accepted the additional responsibilities of town manager with an annual salary by 2019 of nearly $96,000.

Employees past and present testified as to the internal workings of the town office. They described how cash, checks and credit card payments were made for taxes, rental inspections, permits, fines, towing fees, etc., and how they were logged into the Sage 50 computer system.
Former accounting clerk Carla Harris said at some point in 2017, Hrusko took charge of making all of the deposits. In 2019 when Hrusko started having health issues deposits would not be made until she returned to work.

“There were a lot of angry citizens when those deposits weren’t made on time,” Harris said. “It was a mess.”

On the first Friday in January 2020 cash accepted by the police department was taken to Town Hall. Receptionist Angela Williams was off that day but on her return Monday the envelope that was to have contained $1,000 in cash was empty and Hrusko explained she had come in over the weekend and handled it — which Williams testified was unusual.

That was the spark that started an internal investigation on Jan. 7, which led to the suspension and eventual discharge of Hrusko who was indicted some six months later.

The opening witness on the second day of the trial was certified fraud examiner Andrew Haynie with PKS & Co. He testified that the Sage 50 software records logins and a history of each transaction, that is, even if an account is later changed there is a record of the original entry.

The town’s operating account is with BB&T Bank. Haynie said there was $58,605.32 in cash deposited in all of 2018 but in reviewing the town’s accounting software there was an additional $28,164.81 that was outstanding.

For calendar year 2019 “There were no cash deposits,” Haynie said, but town records showed $71,885.56 was received. In January 2020 there was $698.56 in cash found during a search of the town office. The grand total of diverted cash was $100,748.93.

Haynie then testified to changes made to the accounting records starting in late June 2018. While he said data entry errors occur, they are typically “fixed almost immediately” and usually few in number. Records showed dozens of previously entered customer payments deleted — some of them entries made months earlier — with a concerted effort on Sunday, Sept. 22, 2019 to delete 170 entries the day before the fiscal year 2019 audit would start.

Haynie said he spent nearly 200 hours examining the data and preparing his report. When questioned by the defense whether he could say for certain that Hrusko was the person who made the changes, Haynie said he could only say it was accomplished through her user name and password.

The criminal investigation into Hrusko was left to the State Police. Sgt. Johnathan Pruitt testified he subpoenaed Hrusko’s bank records and executed a search and seizure warrant at her home. He said she denied involvement, that no missing cash was found, and nothing in Hrusko’s home computer or cell phone was of evidentiary value.

What he did find excluding mortgage and car payments was some $42,260 in credit card and other business charges 120 to 150 days past due. Pruitt testified that cash deposits into her Bank of Delmarva account totaled $5,075 in 2017, $4,000 in 2018 and $43,765 in 2019.

Hrusko said under oath that based on her salary she did not think being $40,000 behind was that much but it was also an amount that she said did not sound right to her.

“I don’t remember it being like that,” she said.

One of the expenses the prosecution highlighted was to ESP Chat, an online psychic network. Garner said there were days when $300 to $400 was spent. “I believe in them,” Hrusko said, adding if there’s an issue in her life “that’s who I turn to.”

Garner told the jury in his closing arguments that while this was “a fairly simple case” it was also “a very serious case.” “The town is not exactly flush with cash,” he said.
He said as the saying goes, “Power corrupts, absolute power corrupts absolutely,” and it was Hrusko as both town manager and finance administrator who had the status to do this — and the motive because of her debts.
“She had the motive, she had the opportunity,” he said, asking the jury to “use your common sense, she’s guilty.”

Defense attorney McFadden said Hrusko was not living in a $400,000 home or driving a BMW. And while her finances were not the best she was no different than “the American experience.” He said she worked in a small office that through the testimony was shown to have no interior office door locks until October 2019 after a nuisance inspector was fired.

“Should accounting practices be tighter? I think pretty clearly they should,” McFadden said, “but that is a world of difference to convict her of every single penny missing from the system because she was in charge.”

McFadden told the jury that the office and filing cabinet where cash was kept did not have locks and access to the accounting system was not entirely secure. “That’s mind boggling,” he said, adding that the Town Commissioners and employees “accept no responsibility so it must be her.”

As for taking comfort in consulting a psychic hotline, “that doesn’t make you a thief.” McFadden said the investigation focused on Hrusko alone and no one else when there was no direct evidence she took any of it.

In his final remarks to the jury Garner said Hrusko “stole out of necessity,” she had to take the cash to pay her own bills. At work she did not reconcile bank statements, or notice that no cash was being deposited.... “She’s the ringleader of the circus that is Town Hall,” adding, “The circumstantial evidence is overwhelming.”

Hrusko was the only witness for her case. For the state testimony from those not already mentioned was received from Gail Hudson and Mary Guerrero from the police department, former Chief Tim Bozman, former code enforcer and interim town manager Tracy Grangier, and Commissioners Garland Hayward and Joey Gardner, president and vice president during that time.

Marvin Parker, who represented a major property owner who made all payments for rental inspections, taxes and fees in cash, also testified.

The jury took less than two hours to make its decision. Senior Judge Raymond E. Beck of Carroll County heard the case and ordered a pre-sentence investigation. The maximum sentence is 20 years but the State’s Attorney was not immediately sure what he would recommend.

Should there be an appeal that decision has to wait until after sentencing.

Hrusko was bonded. According to town attorney Paul Wilber the town's insurance coverage for this theft resulted in a payment of $103,248.93.