Former Northeast Knox Utility District Employee Indicted for Theft

A former customer service representative with the Northeast Knox Utility District misappropriated more than $8,000 by using two separate schemes, according to an audit Tennessee Comptrollers released this week.

A Knox County grand jury indicted that woman, Sonya Sherrow, earlier this year on one count of theft over $2,500. The grand jury also indicted her on two counts of forgery, one count of money laundering, and one count of official misconduct, according to a press release.

“The investigation began after the Comptroller’s Office was notified that district officials had discovered unusual adjustments to customer accounts. Investigators found that Sherrow misappropriated district collections totaling at least $8,507 by using two separate schemes,” Comptrollers wrote in their audit.

“Most of the misappropriation came from fictitious adjustments totaling $6,346 that Sherrow made to district customers’ accounts. In many cases, a customer would pay his or her utility bill in full, and Sherrow would keep the money for herself. She would then adjust the customer’s account records to indicate a zero balance.”

District officials, Comptrollers went on to say, did not have a written policy for account adjustments, and the adjustment review process was inadequate.

“Additionally, Sherrow employed a lapping scheme to conceal her misappropriation of district collections totaling at least $2,161,” according to a press release.

“Investigators found that Sherrow did not always apply customer payments to the correct customer account. Instead, she stole the payment and later used another customer’s payment to cover up her misappropriation in the accounting records.”

Sherrow resigned from her job last year, according to the press release.

“Following her resignation, she attempted to conceal her lapping scheme by purchasing over 100 money orders from various vendors and submitting them to pay the outstanding customer account balances. She delivered the money orders through the mail and the district’s drop box,” auditors wrote.

Utility District General Manager Gregg Morgan told The Tennessee Star he and other officials have implemented new policies to make sure this doesn’t happen again — although he would not offer specifics.

“We will just do closer observation and more adherence to policies as directed in the findings in the audit report from the Comptroller.

“With it being an ongoing investigation, we cannot comment any further.”

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Chris Butler is an investigative journalist at The Tennessee Star. Follow Chris on Facebook. Email tips to [email protected]

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