Teacher's union told money went missing

OCEAN CITY -- In a routine tax filing to the IRS last spring, the Worcester County Teachers Association made a startling disclosure: Its leaders believed more than $100,000 in funds had gone missing.
Now, local authorities -- who say they never heard about the reported loss -- are investigating.
The WCTA's tax-exempt status was revoked by the Internal Revenue Service in October for failure to file a Form 990 for three consecutive years, according to the Guidestar website, which makes available public tax filings from nonprofit organizations.
Before that, in March, the union had told the IRS its finances were in crisis. According to a WCTA tax filing dated March 13 of last year, the union documented $111,589 in what it called "misappropriated funds" and noted the amount was pending an audit by a bonding company.
Prior to this, records show, the union's last tax filing was sent in August 2008 and accounted for the 2005-2006 tax year. It was signed by former WCTA Treasurer Denise Tull.
Included in the March paperwork was a typed letter, undated and unsigned.
"Due to circumstances beyond the control of the present officers," the letter reads, "on behalf of the organization, I respectfully request any proposed penalties be waived."
The letter says Tull resigned as WCTA treasurer on March 31, 2009, and prior to that time, she had represented that all tax filings were current.
"However, the officers learned not only had the returns not been filed, but a substantial amount of money was embezzled (over $100,000). An investigation has begun and the bonding company took all the records. The current treasurer only recently obtained some of the bank statements in order to prepare this return," the letter reads.
The hole in the union's finances was large, equal to nearly half of the organization's reported revenue of $227,200 in 2008.
According to the names and signatures on the paperwork, the treasurer who replaced Tull was Sylvia Barrios. Tax forms show she assumed that role April 1, 2009. The tax form also was signed by Lester A. Simpson of the Salisbury accounting firm Twilley, Rommel & Stephens.
Denise Tull is now a teacher at Stephen Decatur Middle School, where she has worked since 1988, according to the Worcester County Board of Education.
Several phone calls placed in the last two weeks to Denise Tull and Sylvia Barrios, seeking comment for this story, were not returned.
In an interview, current WCTA President Helen Schoffstall said the union has accounted for all its funds. Schoffstall is a U.S. history teacher at Snow Hill High School.
"All of our accounts have full restitution, and there are no claims pending against any of our association officers," she said. "But beyond that, I can give you no more information about personnel.
"WCTA did not lose any money," she added. "WCTA finances were not out any money to my knowledge. But then again, I can't discuss it, because I don't know anything about it; it occurred before I became president."
She added: "Not privy to the information. Not going to discuss it with you. Not going to do hearsay, and I think some of the information you have is just that."

Flawed paperwork

Schoffstall also said the union's loss of its nonprofit status was the result of a "clerical faux pas."
"Apparently, when we found out we had not filed the three consecutive years, there had been some kind of a clerical error," Schoffstall said. "We secured a firm to help us file those. When the firm faxed those forms to the IRS, the third year -- the third page -- didn't go through. By the time the IRS notified us that they had not received that one, of course, they dropped our tax-exempt status."
The WCTA has since made current its back tax paperwork, Schoffstall said; the union is in the process of reapplying for tax-exempt status.
Schoffstall declined to comment further, and deferred to "the MSTA lawyers who would deal with that kind of thing."
Susan W. Russell, an attorney who works as the full-time legal counsel to the Maryland State Education Association, did not return multiple phone calls for comment during a 10-day period for this story.
Terry W. Springle was the president of the WCTA at the time of Tull's departure as union treasurer. A longtime math teacher at Pocomoke High School, he retired in 2010.
When reached by telephone for comment, Springle said Tull was not charged with any criminal offenses.
"It was the decision of the people who suffered the loss," Springle said, "and I don't know any more than that ... . She was never charged with anything. I have no proof that she ever did anything." When asked if the "misappropriated" money had been repaid, Springle replied: "Yes. Maybe I wasn't supposed to tell you that."

Prosecutor investigating

Worcester County State's Attorney Beau Oglesby said his office is looking into the embezzlement allegations included in the IRS paperwork. He said no area law enforcement agencies had reported hearing about any criminal activity related to the tax filings.
"We have a potential crime that has gone unreported, at least to law enforcement," he said. "There's going to be a complete and thorough investigation.
"If there's been a breach of a very important fiduciary duty, there's going to be charges filed and someone's going to be held accountable for their actions," he said.
Oglesby also said there may be jurisdictional issues in any investigation. That's because the WCTA's listed business address is 1302 Old Ocean City Road in Salisbury -- a residential address that online property records show belongs to the Wicomico County Education Association. Springle said the WCTA rents the office space from its Wicomico counterpart.
Oglesby said he's brought Wicomico County State's Attorney Matt Maciarello up to speed on the situation. When reached for comment, Maciarello said there are no charges pending in Wicomico County related to the matter