Detectives say a bookeeper for Clackamas River Water diverted $57K water district
by: Submitted photo, Carol J. Labrado

A former bookkeeper with Clackamas River Water was arrested last week on suspicion of stealing $57,000 from the Clackamas-based water provider in the first half of 2007.

Carol Jean Labrado, 61, was arrested on two counts of aggravated theft and seven counts of first-degree theft.

According to court documents, Clackamas River Water staff first became aware of the potential problem in July after newly elected Board Treasurer Warren Mitchell asked to review the payrolls from the previous two pay periods. When Mitchell got them he discovered that Labrado had deposited more than $30,000 into her own bank account over the two previous pay periods.

Labrado, a part-time employee, had 'total control over the company finances and was authorized to make all payroll payments, and was in charge of keeping track of all income and expenses,' board member Patricia Holloway told the sheriff's office.

In January of last year, Labrado's pay had inexplicably risen from about $1,100 every two weeks to $4,166.52 over two pay periods, according to the documents. Over the next two months her pay jumped even more, reaching as high as $3,365.85 for one pay period.

In April Labrado was told to train other employees in the payroll system, and her April pay was normal, Adora Campbell, another employee, told the sheriff' office. But after that, it rose exponentially, reaching:

• $14,594.12 over two pay periods in May,

• $23,597.09 over two pay periods in June, and

• a single payment of $16,668.93 on July 10.

After Mitchell asked for the payroll accounts, Labrado never showed up for work again. When then financial manager Steve Lidston tried to call Labrado, her phone had been disconnected.

The water district was formed in 1995 and directly serves about 50,000 people in Milwaukie, Gladstone, Oak Lodge and unincorporated Clackamas County.

Holloway told the sheriff's office that Labrado's hours could vary slightly in a given month and therefore so could her pay.

But Campbell told the sheriff's office that there was no reason Labrado should be making such large wages, according to the court documents.

Former board treasurer Waneta Conway, whose term ended in July, said she had tried to investigate the payroll but was denied access.

'They refused to give me the payroll records,' Conway said. 'I've done this for a long time and I knew something was very amiss. I was stonewalled. They wouldn't give them to me.'

When the new treasurer, Mitchell, finally discovered the inconsistencies in pay, the water district hired Moss Adams LLP to conduct an audit into the payroll situation, fired Labrado for not returning to work and not informing anyone of her absence and told the sheriff's office about the situation.

Holloway said the sheriff's office initially couldn't investigate because they didn't have enough available staff, so the district had to build the case with the help of Moss Adams. Once the district had a report of how much they believed was stolen and how, the sheriff's office took over.

Sheriff's office personnel went to Clackamas River Water headquarters in Clackamas and copied the hard drive of Labrado's work computer and seized the contents of her storage locker, which included financial documents and Casino Club Cards, the report said.

Labrado, who detective Jum Strovink said had been in contact with the sheriff's office, turned herself in Thursday morning following the investigation.

Holloway said insurance would cover some of the losses, but not much.

'We have employee dishonesty coverage that should cover the proven amount of loss,' she said. 'It does not cover any of our costs documenting the extent of the loss,' which she said was about $36,000. With lawyer fees on top of that, she said the district may hardly see any return.

'We're still out a lot of money.'

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