Checks and Balances 

Trust and assumptions lead to Valley County theft

When former Valley County Clerk Leland Heinrich received requests for payment for brush-clearing work in late 2006, he said he didn't think much about it.

"It was just business as usual," said Heinrich, now a Republican state senator representing Cascade. "We had done other projects like that before."

But it was far from routine.

As it turns out, those two payments, for $17,856 and $34,914, were the start of what the Idaho State Attorney General's Office believes was a scheme to steal more than $52,000 of federal grant money from the county by a former employee, Lois Van Hoover.

Van Hoover has since been charged with two counts of felony grand theft and four counts of felony forgery. Her preliminary hearing is scheduled for Feb. 26 in Valley County.

So, how did one woman get away with so much public money in just two checks?

For Heinrich and others involved, it was a combination of trust and routine. They trusted people to do their jobs and got used to that happening.

"We had a system that created a lot of trust, and that breeds opportunity," said Valley County Commissioner Frank Eld. "We, as commissioners, have to trust and have faith in these individuals. It's built on an awful lot of trust. If there's a fault in the system, that's it."

The incident began in 2005, when Valley County was awarded a $55,000 federal grant through the Idaho Department of Lands to pay for removal of hazardous wildfire fuels in the Yellow Pine and Big Creek areas. None of the money was used until late the next year, when Heinrich received two requests for payment from Backcountry Services, Inc., claiming to have done the work.

The company was a real one, but never held a contract with the county, never did the work, and just happened to be owned by Van Hoover's son, Leo E. Van Hoover Jr. The payment requests were signed JR Van Hoover, listed a post office box belonging to Lois Van Hoover as the address to send the checks and didn't include an invoice.

Still, the requests were approved with little or no questioning.

"She was the one I relied upon to authorize final payments," Heinrich said of Van Hoover. "She would prepare claims for payment [and then they were sent] to my staff and then to the commissioners.

"There were no flags at all," he said. "As far as I was concerned, it was presented in proper order."

During its investigation, the Attorney General's Office found that the signatures on the payment requests were not only different from each other, but also different from the one on the articles of incorporation on file with the Idaho Secretary of State's Office.

Eld is the only current commissioner who was serving on the board at the time the payments were approved. He said the requests for payment were just two of hundreds the commission receives from the county clerk, some of which are for similar services, including snow removal and road grading. Additionally, many contracted companies have the word "backcountry" in their names, Eld said.

"It just didn't ring any bells," he said. "If I had seen [Van Hoover's name], then it would have raised a red flag."

Another Valley County employee spotted the discrepancy and brought it to the attention of current Valley County Clerk, Archie Banbury, prompting the ongoing state investigation.

That investigation uncovered that Van Hoover's son, who was living in Arizona at the time, had been told of the possibility of a county contract, and had been assured by his mother that she would take care of the details and hire contract labor to do the work.

According to the probable cause affidavit, the county checks were deposited into his business account, but he then wrote large checks to his mother for specific amounts, which he assumed were for expenses. The checks actually went straight into accounts held by Van Hoover and her husband.

When she was interviewed about the incident, Van Hoover at first said she had no knowledge of the grant and wasn't in charge of it. This is despite the fact that she submitted the grant proposal, and was charged with administering it in her official role as Valley County natural resources coordinator.

"I still think there's more to the story," Heinrich said. "It's totally out of [her] character.

Heinrich, who served as county clerk for 16 years, said he knew Van Hoover for four or five years, and took her at her word when she presented payment requests. According to the affidavit, one of the requests even had a note Heinrich stuck to the bottom stating, "final as per Lois," which Heinrich said wasn't unusual.

"In 16 years, this is the only happenstance that happened," he said. "It certainly wasn't the norm."

Heinrich said he hasn't talked with Van Hoover since the investigation began, but believes the truth behind the incident will come out in court. "I'm just anxious for the whole thing to progress," he said.

In the meantime, Valley County is still out more than $52,000.

As the grant was structured, the county did not receive the funds up front. Instead, it was to be reimbursed after the work was done. Since it was never completed, Eld said Valley County may never get it back.

"It's Valley County's money that's down the tubes," he said. "We're hoping they will find the money and [Van Hoover] will reimburse us.

"We don't have a lot of money," Eld said. "People think because we have all this high-end development [we have lots of money], but we don't. We need all the money we can get."

While the Van Hoover case heads to court to be decided, Eld said it has already changed the way daily business is conducted in Valley County.

"We all look at [payment requests] a little bit differently now," he said. "There's increased scrutiny of any bills that come through. It just highlights the need that you've just got to double-check everything."

Heinrich argues that the case shows that the protocol worked. "It just proves that the system catches you," he said. "There are checks and balances. If it isn't kosher, they will show up."

Eld laments the loss of innocence in what was once a small-town government.

"We had a system where you believe people, you trust people, if they say something has been done, you believe them.

"It's a sad day when you can't trust people," he said. "The handshake used to mean something."

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