Former Beekman Comptroller Frederick D. Knapp Jr. pleaded guilty to grand larceny in the second degree Friday in Dutchess County Court after an audit and investigation by State Comptroller Thomas P. DiNapoli uncovered a second theft of $150,000 in town funds, following an earlier admission by Knapp of stealing $390,000 while in office.
“This individual betrayed the trust of the taxpayers of the town of Beekman,” DiNapoli said. “But crimes such as these can be prevented by strong fiscal checks and balances. Internal controls over municipal cash are the first line of defense against public corruption. My office routinely advises local governments to follow the money. Sometimes, they follow it too late.”
DiNapoli’s audit and investigation revealed that from 2010 through 2013, Knapp, 63, of Poughkeepsie, stole an additional $149,219 in cash from the town’s recreation department. Knapp previously pleaded guilty to grand larceny for stealing $390,178 by using the town’s American Express card for vacations and other family expenses. Knapp and two of his family members had credit cards that were directly billed to the town.
DiNapoli’s office found that the Beekman Town Board failed to safeguard town money by overseeing Knapp’s processing of cash receipts. As a result, $149,219 in cash submitted from the town’s recreation department, town clerk and other offices could not be accounted for. In addition, cash receipts were not deposited into the town’s bank account within 10 days, as required by law.
DiNapoli made several recommendations to the town, including:
- Adopt written policies over cash receipts that address collection, recording and depositing. The policies should require segregating incompatible functions related to cash receipts;
- Ensure that deposits are timely and in accordance with applicable laws; and
- Seek recovery of $149,218.75 for collections never deposited in the town’s account.
Town Supervisor Barbara A. Zulauf thanked DiNapoli’s office for its audit and reported that the town has overhauled its Finance Department, hired a new comptroller and bookkeeper and is implementing recommended changes in the Comptroller’s audit.
Town officials agreed with the audit findings and have begun to implement many of the Comptroller’s recommendations. Their response is included in the final audit report, which can be viewed here:
DiNapoli encourages the public to help fight fraud and abuse. New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at [email protected], or by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.