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Court of Appeals to hear Alcona lawsuit

August 7, 2013
Betsy Lehndorff - News Staff Writer , The Alpena News

HARRISVILLE - A $1 million lawsuit against an auditing company finally will be heard in the Michigan Court of Appeals five years after it was first filed, Alcona County Board of Commissioners learned Wednesday.

During their regularly scheduled meeting, Chairman Kevin Boyat presented a letter he had received from an attorney, who stated the hearing would be held 10 a.m. Sept. 4 in Lansing.

"We still probably won't know for six months," Boyat said.

Boyat was relieved the appeal finally was being heard years after a former county treasurer went to prison for stealing more than $1 million.

At issue is a malpractice suit the county filed against its auditors, Rehmann Robson. The county contended that the auditors should have spotted the losses earlier.

Although the county eventually was awarded $1 million in 2010 by 23rd Circuit Court Judge William Myles, the auditing company appealed the ruling to the higher court.

The case stems from a 2004 to 2006 embezzlement case involving former Treasurer Thomas Katona. In 1998, while serving the county, Katona was convicted of wrongdoing while handling a private client's accounts. The charges included forgery and counterfeiting. However, because he completed parole and paid fines, his record was cleared and he kept his post.

In 2006, the county discovered $1.24 million missing, while Katona was on vacation. When the evidence led to him, he claimed he had become ensnared in a Nigerian money scheme, and hundreds of thousands of dollars he had wired overseas were lost.

He was sentenced to nine to 14 years in prison and is at the Kinross Correctional Facility. According to the prison website, the earliest he can be released is May 2016.

In a letter from Detroit attorney Neal Kennedy, representing the county, the three judges on the appeals panel are Mark Cavanagh, Kirsten Kelly and Karen Fort Hood.

Commissioner Carolyn Brummund will attend the hearing.

"Too many years have gone by for that lawsuit," Boyat said.

But the money the county won in 2010 has been held in a special fund, so if the auditing company were to close its doors, the award still would be available.

In other action at the county commissioners meeting:

Sheriff Doug Atchison said he will need an additional $15,200 for overtime before the end of the year. His department's 12 deputies were slammed with 400 calls in July because of a rash of thefts from automobiles in the Greenbush area and breaking and entering cases elsewhere. The staff also responded to a high number of accidents and other issues. Atchinson said it was the highest number of calls ever recorded in the county.

the commissioners approved payment of $444,332 in bills for the July 16-Aug. 6 period.

Commissioner Bill Thompson reported that four semi-tractor trailer loads of electronics, television sets and appliances have been picked up for recycling this year and in 2012 at the ARA Fairgrounds in Lincoln. An electronics recycling event Aug. 3 drew more than 275 people to the farmers market, he said.

each county commissioner donated $200 to pay for some free rides for deserving children at the Alcona County Fair, which opens Aug. 20.

Betsy Lehndorff can be reached via email at blehndorff@thealpenanews.com or by phone at 358-5693. Follow Betsy on Twitter @bl_alpenanews.

 
 

 

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