CUMBERLAND COUNTY, Pa. — The Cumberland County District Attorney will on Tuesday announced the findings of an investigation into former Newville Borough manager Fred Potzer's handling of Newville's finances.
Earlier this year, the District Attorney's office launched an investigation into the Borough's accounts after finding discrepancies in late December 2022. The borough council said in February that a forensic audit of the accounts was being conducted.
At that time, the borough said in a statement that they promised to be transparent with Newville residents, make every effort to maintain payroll and benefits for borough employees, correct outstanding accounts and continue to support the investigation.
According to a criminal complaint filed by investigators with the Cumberland County District Attorney's Office, representatives with the Newville Borough Council and the Newville Water and Sewer Authority alerted authorities about "irregularities" in their finances in January 2023.
Both entities employed Potzer to oversee their finances, they told investigators.
Potzer was first hired in 1994 and served until 2022 when he stepped aside due to illness.
In Potzer's absence, borough secretary Jody Hoffman began to open incoming mail to process bills, something that previously had been exclusively handled by Potzer.
Hoffman found an electric bill for NWSA over $50,000. She brought this to the attention of NSWA president Roger Hoover, as it was exceedingly high.
This triggered a review of both the BON and NWSA accounts, investigators said. The review compared bank accounts to treasurer reports prepared and submitted by Potzer.
The comparison found the reports did not accurately represent the bank balances. Hoover found that NWSA funds had been used to purchase a police vehicle and he observed several loan payments. The loan payments were not expected as he was unfamiliar with any loans that the Authority currently had.
Hoover advised that BON and NWSA were separate entities, and the monies were to be kept separate, according to investigators.
After receiving the complaint, investigators met with Potzer, who allegedly related that he used monies form NWSA to cover the BON when they had no money coming in, the complaint states.
"He indicated he was robbing from Peter to pay Paul," investigators said in the complaint.
Potzer related that a NWSA Treasurer Report showed it to have a $200,000 balance when it held $2,000, investigators said. Potzer reported that Authority Members were not aware that he was using NWSA Funds to pay BON bills. He allegedly advised that sometimes it became apparent that funds could not be reimbursed to NWSA, and he would write them off.
When asked how the payments were made, Potzer allegedly described how some payments were made using NWSA checks that would be signed by BON Council Members. These members reviewed the invoices but were unaware that the checks they were provided were not ones they were authorized to sign.
The check used to pay for a police vehicle was from a Mid Penn Bank account ending in 7373. This was a NWSA account, but the check was not adequately labeled, investigators claim. The header merely listed Borough of Newville without any indication it belonged to the NWSA, and the council members who signed this check were unaware that it was not a BON check, according to investigators.
Financial records were obtained from BON and NWSA and provided to a forensic accountant for analysis, which found that 65 treasurer reports from December 2017 through November 2022 were inaccurate, investigators claim.
Potzer provided these fraudulent reports to the BON Council and the NWSA Board at their monthly meetings, investigators said. They reflected balances that were less than what some of the accounts held.
One of these accounts was the BON Fire Tax Account. This account was misstated since December 2019, with the largest discrepancy being in November 2022, at approximately $67,000 dollars, according to investigators.
Potzer's position did not provide him the authority to spend BON and NWSA monies without council and authority approval, investigators said. Both entities relied on the fraudulent reports that he prepared to conduct business.
Potzer is charged with tampering with public records/information, access device issued to another who did not authorize use, misapplying government funds, and tampering with public records/information.
District Attorney Sean McCormack revealed the findings in the conference room of the District Attorney's Forensic Lab in Carlisle on Tuesday.
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