Halfmann embezzlement scheme; start to finish
BALLINGER TX - On Thursday, March 17, former Ballinger Independent School District business officer manager, Janna Halfmann, was sentenced to 19 years in prison for stealing over $200,000 from the school district over the course of several years.
District Attorney John Best opened his case before 199th District Court Judge Ben Woodward, "You're going to hear evidence that Janna Halfmann was in a position of trust. She used Ballinger ISD credit cards for her and her family. She also stole over $70,000 in overtime. We are not asking for probation."
How it all started
Halfmann had worked for the school district since 1995 and was fired on October 1st, 2018.
BISD superintendent Jeff Butts testified at Halfmann's trial regarding how the embezzlement first came to his attention, "In June of 2018 I got a phone call stating that there was an issue with supplemental pay. The caller said, 'I think you need to check into this.' I told Janna about the problem and she said that she would take care of it."
At the time Halfmann was business office manager for BISD, Molly Whitten was payroll clerk. Halfmann denied that there was any collusion between her and Whitten regarding the overtime payments.
Butts testified that he'd known Halfmann since they were in high school. Butts attended Winters High School while Halfmann attended Wall High School back in the early 80s. He said that the phone call regarding the payroll irregularity came from someone who is a consultant. When the original irregularity came up, Butts talked to another consultant regarding the issue, saying "red flags went up, immediately."
According to Butts' testimony, he spoke to Halfmann about the issues to which she responded to Butts that "she had no idea what was going on."
Signature stamps lead to more suspicions
Once he had a better understanding of what was happening with the payroll, Butts reported his suspicions to the Ballinger Police Department. He also reported the incident to the school board.
While the school district's executive staff were going through the handwritten payroll overtime sheets, Butts explained that they found two signature stamps in a pink makeup bag in Halfmann's desk, "It was just your basic ink stamp with 'Jeff Butts' on it."
On the stand, Best asked Butts if he saw documents that "have your signature but that you didn't sign?"
Butts replied that he did find forms with his signature but that he didn't sign. He said that the stamp they found was not the stamp he uses for staff birthday cards or such. They also found a stamp for BISD's maintenance chief, Tony Harral.
Calling in the Rangers
Butts testified that the district put Halfmann on suspension on September 11, 2018, at which time the district paid a forensic auditor to come in and go through their books. The district notified the Ballinger Police Department, who called in the Texas Rangers. The investigator assigned to the case was Ranger Jason Shea.
According to Butts' testimony, he said that early in the investigation that Ranger Shea told him to also look into any credit card spending, since falsified payroll investigations often lead to other forms of theft in an organization.
The school district investigation
Butts, along with Ballinger Assistant Superintendent Caroline Toliver, and forensic auditor Pat King, went through the books, with Toliver being handed the reins to dig deeper into the theft that would eventually exceed $213,000.00.
As he continued testifying, Butts spoke about how strict Halfmann was when it came to receipts, "If I went to a conference and came back with even $5 missing, she had me settle it up immediately."
Halfmann, according to Butts, wasn't using the "check-in system," "She was using a paper copy (time sheet). Any OT for her would have to be approved by me, and I never approved any OT for her."
As for Whitten, Butts said that he spoke to her about Halfmann's overtime sheets, "She told me that she saw some of them and others she didn't."
Best asked Butts whether he believed the $214,000 was the total of Halfmann's thefts, "Not even close. When we started to look at credit card statements, the credit card companies told us that they could only go back 3 years. There is a substantial amount over that $213,000. I mean substantial. That $213,000 is just where we decided to come to a stop and move forward."
Butts was asked by Best how he felt the case has impacted the district, "That money (that was stolen) is for our students, our kids, and our staff. It is not to be used inappropriately. For anyone to do this and deprive our students is incomprehensible. Every employee, student, and parent put 100% trust in Janna. To have that trust destroyed is disheartening."
As for her retirement, Butts testified that Halfmann was fired on October 1st and removed her full retirement from the retirement system on November 1st. Butts testified that the total amount of the retirement that Halfmann withdrew totaled approximately $79,000.00.
Halfmann's defense attorney, Tip Hargrove, cross examined Butts. The cross-examination centered on a $100,000 settlement from the school district's insurance. Hargrove would contend that the district was paid for the theft and that $100,000 should be taken off of the $213,000 total. Hargrove also said that the insurance company couldn't be a victim. Judge Woodward ultimately disagreed with Hargrove at sentencing.
Toliver puts the pieces together
Caroline Toliver took the stand prior to Butts and confirmed that Halfmann was an exempt employee, meaning that she didn't qualify for overtime. Prior to Toliver's testimony, the forensic investigator, Pat King, said that in August of 2015, Halfmann received $4,427.88 in pay and another $5,296.22 in overtime pay. That was just one of the examples of thousands of dollars in overtime paid out to Halfmann during several months.
Toliver testified that at times the fraudulent handwritten time sheets showed that Halfmann had worked 21-hours in a single day, "In once case, she wouldn't have gotten off of work until 1 a.m."
Halfmann would later testify that Whitten entered the dollar amount in overtime and that she didn't know how Whitten arrived at some of her figures, such as working two-hours of overtime and getting paid over $1,000 for those hours. Halfmann avoided tying Whitten in to any of her own criminal activity.
According to Butts, it is Toliver who put in the hundreds of hours going through credit card receipts, time sheets, etc. Toliver testified that she put in up to 80-hours a week investigating the fraud, "I worked many nights and weekends."
One part of Toliver's testimony regarded the school's Lowe's credit card. Toliver testified that it was twice declined by Lowe's when Harral had attempted to use it for the school district. Toliver stated that she spoke to Halfmann about it and that Halfmann said that she'd take care of it. It was later learned that the card had been declined because the payments hadn't been made.
According to testimony, Halfmann bought a washer and dryer from Lowe's on the school account and purchased some cabinets and countertops. Halfmann would admit during her testimony that she still had the washer and dryer at her home and that she was still using them. She denied any knowledge about the countertops, although other testimony stated that Halfmann's house was being remodeled during the period that the embezzlement was going on.
Toliver testified regarding the countertops and cabinets, "There was the reimbursement for cabinets and countertops at Lowe's. Janna spoke about how she was having her cabinets and counters redone."
iTunes and gift card purchases
Toliver answered one of the biggest questions on the minds of the public: What did she do with the money?
According to Toliver, one of the most common purchases were gift cards. These included iTunes and restaurant gift cards, as well as gift cards for various stores. The iTunes purchases were in the thousands of dollars. Groceries were also purchased with the school credit cards. Toliver testified as to when the purchases were usually made, "They were made from Friday afternoon thru Sunday afternoon."
One other common purchase was made with the school's Mastercard: Amazon. Other purchases spanned from west Texas to east Texas, "The Amazon purchases included actual paperback books, as well as e-books. Her other purchases were made primarily in San Angelo, but ranged from as far as Midland-Odessa to College Station."
According to Toliver, the purchases were also made in Kerrville, Abilene, San Angelo, at Hobby Lobby, HEB, Albertson's, and others. Toliver testified that Halfmann transferred a $13,000 personal debt to a school credit credit.
The evidence showed that Walmart was the most often used location, with the state alleging that approximately $109,000.00 was spent at Walmart, $13,000 at Lowe's, and $18,494.76 on Mastercard. This was in addition to the other money that she stole and her payroll fraud.
Toliver was detailed in her testimony. Her confidence was readily apparent as she spoke about some of the individual purchases made by Halfmann, such as a $1,717.88 Lowe's charge. Toliver carried a banker's box of files into the courtroom, an arsenal of paperwork detailing Halfmann's myriad of transgressions.
The trial continued on throughout the day before concluding with Halfmann testifying on her own behalf.
The total amount of money stolen was $213,987.79. There was a total of $79,000 in fraudulent overtime.
Halfmann takes the stand in her own defense
Attorney Hargrove called Halfmann to testify at the end of the trial. Most of her testimony was guided by Hargrove regarding how her crime has personally effected her life. She testified that she and her husband, Greg, can't afford to go out to eat. She continued by saying that she only now shops in San Angelo. The former business office manager also testified that she's a member of St. Joseph's parish in Rowena and volunteers at the church's festival.
In addition, Halfmann spoke about being "shunned" in her own community and that her and her husband don't go out. Asked by Hargrove if she had any friends left, Halfmann replied, "I have a few good friends left."
The rest of her testimony revolved around her health. She testified, "It's been better," when asked about her health by Hargrove. She spoke of a blood disorder, osteoarthritis, glaucoma, sinus surgeries, anemia, etc. Hargrove asked her if she'd tried to get a job, to which she replied that she had applied, but didn't get any of the jobs because she can't pass the background check.
Halfmann also testified that she and her husband own a home in Rowena that has been appraised at $250,000, with approximately $50,000 remaining to pay it off. She says that neither her, nor her husband, have any savings or cash. On the stand, Halfmann spoke about their income now, "Greg makes around $4,000/month. After bills, there is not much money left over."
As to how the whole issue with the credit card fraud started, Halfmann responded, "At one point I found myself in financial problems and couldn't afford groceries. I said that I'd use the card one time and never use it again."
"It's all gone, sir."
District Attorney John Best's cross-examination of Halfmann was short and focused. Best said that Halfmann's first child went to college in 2009 and that her youngest just graduated in 2019. He contended that Halfmann was named business manager in 2011 or 2012 and was making "almost $5,000 per month."
Best said that when Halfmann used to card the first time, it was after her kids were in college. Best also asked Halfmann how she was able to pull off the embezzlement for so many years, "I guess you could say that I was very lucky that no one discovered it. 'Lucky' isn't the right word. I would use receipts from other purchases and put them with the purchase orders," Halfmann answered.
To finish off his questioning, Best asked Halfmann if there is any money left. Halfmann said that there wasn't any money left, "It's all gone, sir."
Halfmann said that the money and overtime "went to just regular living expenses." Best asked her how she hid the credit card statements, "I had a folder in my email marked 'Mastercard.'"
District Attorney asks for prison time
For his closing arguments to Judge Woodward, Best spoke about the depth of the deceit required to pull off such an lengthy embezzlement over so many years, "Mrs. Halfmann seems like a nice lady. Her beloved friend and superintendent (Butts), and I imagine everyone, trusted her. She was trusted by the school and just went off the rails for at least 7 years. She stole from the citizens of Runnels County, she stole from the kids that go to BISD. She was buying iTunes, a $700 washer and dryer that not many people can afford, but she bought it and is still using it. Fishing stuff, groceries, she was living off the dime of the taxpayers."
Best summed up his case by pleading for significant punishment for Halfmann, "The hard part is what are you (Woodward) going to do about it? What message do you send to Janna and others out there who steal taxpayers dollars for 7 years? The punishment has to be more severe than probation. We're asking for penitentiary time. We're asking that she pay back every penny that she stole. We're requesting that she be given a harsh penalty and punishment. We absolutely don not believe that deferred adjudication or probation would be proper."
Best also said that Halfmann had not paid any of the money back and had not apologized.
Hargrove argued that state law says that restitution goes to the victim. He argued that the insurance company couldn't be considered a victim, and that Halfmann was therefore only responsible for $113,987.79. He asked for deferred adjudication or probation, "Taking a 55-year old woman severe health issues and putting her in is retribution, not rehabilitation."
Best countered Hargrove on the restitution issue, "I don't see a problem with our restitution request. I can't see how someone can steal $214,000.00 and not have to pay it back. Any consequence to her retirement is her own doing. Her car is almost paid off. That's great. She either used the money she stole or her retirement (to make payments). It was 7 years of stealing."
Hargrove lined out a hypothetical probation arrangement for Woodward, "Let's put her on probation for 120 months. Let's round it down to 110 months. Her car will be paid off in May, so that money can now go to paying restitution, about $600 per month. Ultimately that would leave a lump sum payment of around $39,000. She's 55-years old, so at age 62, in 7-years, she can get a reverse mortgage on her home and pay off the final amount."
Hargrove's proposal didn't include the $100,000 that the school received from the insurance company. The proposal would ultimately be rejected in-whole by Woodward.
"Breached a trust"
Woodward took about an hour to come to his decision on guilt and punishment.
The judge didn't waste time getting to the point when addressing Halfmann, "You have breached a trust. You haven't been honest with yourself. You answered the questions, but you weren't completely honest with the Ranger or Mr. Butts. What disturbs me more than anything else is how you disregarded the very processes in place to prevent this sort of thing from happening.
When people disregard safeguards, it causes more issues with the public trust and fellow employees. This is all you. This is a particularly despicable crime."
Woodward brought up the fact that Halfmann hadn't mentioned the email folder where she kept the credit card information, "You didn't tell the Ranger everything, such as the email folder titled 'Mastercard.' Restitution, alone, does not address this crime."
In all, there were 7 charges. The theft was a 3rd-degree felony, enhanced to a 2nd-degree felony due to Halfmann being a public servant at the time of her crimes. For that charge, Woodward sentenced her to 7 years in prison. Halfmann old could have been sentenced up to 20 years in prison.
She also faced 6 state jail felonies. The maximum punishment for those convictions is 2-years in state jail for each count. Woodward gave her the maximum sentence in each case, culminating with 12-years in prison for the 6 state jail felonies, and 7 years in prison for the 2nd-degree felony theft, for a total of 19 years.
Halfmann will serve her sentences concurrently, which means she will serve 7 years, total. She will be eligible for parole in 21-months as inmates in Texas usually serve at least 25% of their sentence before being eligible for parole. With Halfmann having no prior criminal history, having health issues, and not considered a danger to the public, she could see parole sooner than 21-months.
Woodward set an "Appeal bond" for Halfmann at $10,000.
Sending a message
Best was asked if he thought that a message was sent by the punishment handed down by Woodward, "Yes, I do believe a message was sent. Like I told the judge, the only message that makes sense in this case, under these facts and circumstances, is for Mrs. Halfmann to get prison time. You just can't steal over $200,000 from the taxpayers in the community and from the kids where you work, and not have the most severe consequences."
Best commented on the crime of embezzlement in general, "One thing I've talked to the Ranger about and Mr. Butts about is that this problem (embezzlement) is prevalent, not just here, but everywhere. It's everywhere."
Halfmann was offered several plea bargains, but declined them all. Best said that the plea bargains all included at least 5 years of prison time.
Butts spoke about the conviction, "It's bittersweet. I've liked that girl (Halfmann) like a sister. When I came here as a superintendent we even developed that bond that I have somebody that I can trust so I can go focus on something else. I learned don't do that. I didn't think Janna would ever do something like this. Now, we have a process in place that everything goes through two or three people. There isn't just one person over something. The staff understands that when we ask questions, it's not that we don't trust ya, we're just verifying that what we're seeing is what is actually taking place."
The trial was attended by the BISD school board, several of whom were in tears afterward.
Butts said that the school district could have fired him for Halfmann's crimes and Whitten's alleged crimes, but they stood by him and trusted him, "When you got a good staff, you can do things. In our district, our board is solid, our staff is as solid as anybody that I've ever been around. They just came together and we kept going. We went to five employees in the business office to 3 employees. I mean, they spent hours and hours just focusing on the kids. When you have good campuses, good principals, good students, we were able to focus on what we needed to focus on. I applaud the board for trusting me to get this fixed. Some schools would have fired me, and I told the board from day 1 that I understand that. It's my responsibility to make sure stuff like this doesn't take place. But they stood beside me. I can tell you that we're going to bust our butt making sure that something like this doesn't happen again."
The closure is there, but it isn't complete. Friends spend decades together to find that one of them, in a position of trust, has been stealing from all of them, as well as the general public. It's a trust that was seemingly betrayed by nothing more than greed. The closure will not be truly complete until trust between the district, the employees, the school board, and the public has been restored. Halfmann's crimes have left a stain on that trust, the working relationships, and the personal friendships in BISD.
Molly Whitten's trial is coming up. She is currently out on a $25,000 bond for State Jail Felony theft, punishable by up to 2-years in state jail and a fine.