MORGAN -- Former Morgan County Council Administrator Garth Day has admitted to stealing $415,000 during his employment with the county, according to police reports recently obtained by the Standard-Examiner.
"Garth indicated that he was going to fully cooperate, give a full disclosure, and not fight any charges," according to a Sept. 14, 2010, police report.
A Jan. 12, 2011, update to the reports states, "The subject, Garth Day, has been cooperative and has made admission to the theft of public monies."
Asked via e-mail to comment on this story, Day replied, "Just know that the questions you submitted do require some explanation. I really need to wait till the investigation with the feds is complete, at which point I may be able to shed significant light or clarification. My fear is that with only half the story, all the facts won't be put forth."
In an Aug. 26, 2010, phone call to former Council Chairman Sid N. Creager that spurred the criminal investigation, Day "told Sid that he had done some bad things, things he shouldn't have done," and that he had been consulting with his attorney, according to the report.
Shortly after the phone call, Creager had all of Day's e-mails forwarded to him. One e-mail from CLMG Corporation mentioned a $250,000 redevelopment agency line of credit that had become due.
"This appears to be another fraudulent transaction," according to the report. The loan "obtained illegally" originated with Centennial Bank. Upon viewing the promissory note and business loan agreement, investigators found the forged signature of Creager.
Day admitted to forging the signature during a Sept. 29, 2010, interview at the South Ogden Police Department with his attorney Amy Hugie present. The interview site was chosen for its wired interrogation room capable of providing audio and video recordings.
"He admitted to opening several fraudulent accounts with financial institutions in order to facilitate the theft of money from the Morgan County Treasury," according to records detailing the hour-and-a-half interview. "He confirmed that he had fictitiously created financial documents in order to conceal his crimes."
Early reports indicate that Day understood the gravity of his actions.
"He told Sid that they, the council, should distance themselves from him and should either place him on unpaid administrative leave or fire him immediately," reads the report. "The things that he had done will most likely cost him his marriage, home, and will do jail time."
Police reports list Creager, County Treasurer Bonnie B. Thomson, Clerk/Auditor Stacy Lafitte, and former County Auditor Lynn Wood as witnesses.
Investigative subpoenas were sent to financial institutions including Goldenwest Credit Union, Wells Fargo Bank, American Express Datamark and Centennial Bank.
The police report lists no accomplices and says Day used an independent audit to cover his tracks. The audit was requested when Thomson suspected fraudulent activity.
"Garth did tell Sid that the audit was favorable because he had fabricated all the documentation to the auditor," the report reads.
Thomson suspected the fabrication when cashier's "checks provided by Garth for the audit had no routing transit numbers, account numbers, and all were in sequential order but issued over a three-month period to four different businesses." Upon bank employee inspection, the checks in question were not actually Chase Bank checks.
In a statement to an FBI special agent and Morgan investigator Oct. 18, 2010, auditor Lynn Wood said he may have missed some things in a special audit of Day's dealings.
"He was under some pressure from (Creager) to complete the audit and had not immediately noticed some of the documents Day had submitted were questionable," according to police reports.
Although the checks were supposed to be sent to four different vendors, each used the same fictitious Ogden post office box number. The vendors included Intermountain Testing, Frontier Corp., CMT Engineering and Civco Engineering.
In each case, employees of these actual companies said Day's fabricated invoices were convincing but contained "oddities" such as old addresses and incorrect numbering.
"These fraudulent invoices and checks provided to the auditor from Garth add up to $152,299.20," according to the police report.
Police reports also mention another instance of financial improprieties previously reported by the Standard-Examiner.
When the economy made it obvious that Hidden Hollow, a local subdivision under development, was in financial trouble, Day retrieved $540,000 in an escrow account held at a Morgan bank. The county intended to use the money for improvements to infrastructure that the developer was unable to finish.
Day retrieved the money, deposited it in a Centennial Bank account, then cut a $410,000 check to Thomson. The transaction left $130,000 in the account.
Day is expected in court April 4 and Morgan County Attorney Jann Farris expects federal charges to be filed in the case soon.