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Statement of the Attorney Generalís Office: March 27, 2008
Contact: Bob Brammer, 515-281-6699

State Files Lawsuit to Recover CIETC Funds

Statement of the Attorney General’s Office:

The Attorney General’s Office filed a lawsuit Thursday seeking to recover losses in excess of $1.3 million sustained by CIETC, the State, and CIETC’s member governments. The suit was filed in Polk County District Court. [Go to lawsuit.]

The State, CIETC and CIETC’s member governments are repaying $1.3 million to the federal government for disallowed costs related primarily to alleged excessive compensation paid to CIETC’s top three executives. The Attorney General’s Office agreed in December to pursue recoveries from those who might be responsible for misspent funds. [Go to agreement.]

The suit filed Thursday alleges that the State, CIETC and it member governments “became victims of a scheme devised by a group of individuals to divert federal, state, and member government funds into their own pockets by way of overcompensation.”

Defendants named in the suit are Ramona Cunningham, former CEO of CIETC; John E. Bargman III, former COO; Karen Tesdell, former Chief Accountant; Archie Brooks, Jr., former Chairman of the Board; Jane Barto, former Deputy Director of IWD; Dan Albritton, former CIETC paid consultant; and Deb Dessert, former CIETC paid consultant. The suit also names Faller & Kincheloe, P.C., CPAs, former independent auditor for CIETC, alleging the firm’s “negligent conduct permitted misuse of federal, state, and county funds” by the other defendants.