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County lawyers have now recovered 96% of the money stolen from school bank accounts

KBAK/KBFX photo

After more than 18 months of legal wrangling, the Kern County treasurer's office today announced it has recovered 96 percent of the $19 million that was stolen from local school bank accounts over the last several years.

Treasurer Jordan Kaufman said the 96-percent threshold was reached after county lawyers struck a deal with an unnamed financial institution to reverse $1.2 million of fraudulent transactions.

While it's doubtful taxpayers will recoup everything they lost, Kaufman believes still more can be found.

The FBI is conducting the criminal investigation into who took the money and does not discuss ongoing investigations.

A series of Eyewitness News reports in 2017 uncovered serious accounting problems that allowed the sizable fraud to go unnoticed for so long.

Officials from the Kern County Superintendent of Schools, the Kern Community College District and the County Treasurer's office argued publicly about where the breakdown occurred, before agreeing to hire a forensic accounting firm to sort it all out and make recommendations for the future.

The results of that investigation are expected by early November, school officials say.

The massive fraud was first discovered by a debt collector in Hanford, according to internal emails circulated by government officials and obtained by Eyewitness News.

"The hero in this story," as one college district spokesperson said, the debt collector spotted a government account being used to pay a variety of bills. It didn't seem right and she reported it, setting off a giant audit that found the problems.




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