Kentucky State Auditor Adam Edelen hopes to learn more in Covington scandal

Robert Due accused of stealing $600,000 from city

COVINGTON, Ky. -- The Kentucky state auditor is getting to the bottom of an embezzlement scandal that's shaking up Covington's government and resulted in the firing of its finance director.

Auditor Adam Edelen met with Covington officials Thursday to discuss his investigation into the case against Robert Due, who is accused of stealing $600,000 from the city.

Edelen spoke at a news conference at 1 p.m. at city hall along with Kenton County commonwealth's attorney Rob Sanders and Covington Mayor Sherry Carran.

“We appreciate the transparency that an outside and independent state agency review brings to the process to restore public confidence,” said City Manager Larry Klein in a release.

With a rough estimate of $600,000 missing, Sanders said Edelen is getting involved in this case so the city can learn exactly how much was stolen from taxpayers.  

"That's the very first thing that I hope comes out of the auditor's participation in this case,” Sanders said. “A bottom-line number of how much are we talking about and what size was this theft."

Edelen said his office will examine Due's entire tenure as finance director, from 1999 to last month.    

"There will be an extensive process where we will go through and evaluate the systems that were in place that were either ignored or the absence of systems that needed to be in place to prevent this kind of abuse," Edelen said.

The state's audit will also help determine how much restitution the city can recover. There is no deadline for the audit to be completed.

Due appeared in court Wednesday afternoon for the first time since he attempted suicide last week.

A judge expressed concern for Due’s mental health but allowed Due to stay at home on electronic monitoring rather than send him to jail or back to the hospital.

Due left the hospital Wednesday morning for the first time since Aug. 27.

"The judge made it very clear he was concerned about the defendant's own mental health and well being," said Rob Sanders, Kenton County commonwealth's attorney.  "We don't want to have any more tragedies on our hands or anything to make this case worse than it already is."

Due waived his preliminary hearing, so there was no testimony Wednesday. The case goes to the grand jury.

Search warrants filed with Kenton District Court indicated that Due gave no excuses for the alleged theft and said he was simply "living above his means."

Detectives seized two Dell computers and numerous documents from his office. One warrant detailed a financial account that had been frozen.

In the civil case, a judge eased the freeze on Due’s wife’s assets. Patterson was allowed to access an account where the paycheck from her job is deposited.

Another civil hearing is set for Oct. 2.

The city's lawsuit, filed Friday, alleges that Due deposited the money into his accounts and the accounts of his wife, their children and his late aunt, Virginia Molique, who died in 2012.

The suit also makes claims against auditing firms and banks that failed to detect his alleged scheme as well as companies that provided the city with theft-prevention software and employee-theft insurance.

Due pleaded not guilty last week to theft, unlawful access to a computer, criminal possession of a forged instrument and official misconduct.

If convicted, he could face 20 years behind bars.

I-Team investigative reporter Jason Law contributed to this report

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