Clinton, Iowa School District to move forward with litigation in embezzlement case

The Clinton School District will take legal action to recover more than half a million dollars in funds allegedly embezzled from the district’s budget by a former employee.

The Clinton School Board voted unanimously at a committee of the whole meeting Monday evening at Bluff Elementary School to proceed with litigation to recover any misappropriated funds beyond the district’s $500,000 insurance policy limit.
The motion also included approval for the district to submit a claim to its insurance company for the $500,000 covered by its insurance policy.
Superintendent Richard Basden released a statement to the Clinton Herald last week alleging that Denise Babcock, a former accountant and business office supervisor for the district, embezzled more than half a million dollars from the district.
Babcock has not been publicly charged by state or federal authorities in connection with the case.
According to district officials, the specific amount Babcock is accused of misappropriating will be revealed at the conclusion of an ongoing investigation being conducted by the district, the Iowa Auditor of State, the Federal Bureau of Investigation and the U.S. Attorney's office in the Southern District of Iowa.
The school board spent nearly 30 minutes in a closed-session litigation discussion with local attorney Jerry Van Scoy, who handles legal matters for the district, before taking its vote Monday.
The school board’s motion for the vote, which names Babcock, states the district will enforce its legal rights to reclaim any funds misappropriated beyond the insurance limit and will “effectuate return of district property or assets” from “any party responsible.”
“We do not have a timetable,” Board President Jim McGraw said after the vote. “Unfortunately, that’s all we can divulge.”
The state auditor’s office has not yet released an audit report on its investigation into the district’s finances.
Mike Bladel, law enforcement coordinator with the U.S. Attorney's office in the Southern District of Iowa, has said charges in cases similar to the school district investigation are not usually released as public record until a suspect has made an initial appearance in court.