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Alleged embezzlement from Moorhead Lutheran synod may top $250K

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MOORHEAD - A bookkeeper suspected of embezzling $250,000 or more from a Moorhead-based Lutheran synod via a nonprofit that pays the bills of struggling farmers doesn't remember how he spent the money, though much of it may have gone toward his $150,000 home renovation, he allegedly told police.

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Robert Duane Larson of Wolverton hasn't been criminally charged. Moorhead police have forwarded reports to the county attorney's office for consideration of charges, and the investigation is ongoing, Lt. Tory Jacobson said.

Details of the allegations against Larson, including his statements to investigators, are in a search warrant affidavit filed in Clay County court Wednesday.

Larson had been the bookkeeper for the Northwestern Minnesota Synod of the Evangelical Lutheran Church in America since September 2004. He was fired by the synod's executive committee Jan. 2 after confessing to financial misconduct, Bishop Lawrence Wohlrabe stated in a Jan. 6 letter to church leaders and congregations.

According to the affidavit, two synod employees who entered Larson's office on Dec. 19 to find their check vouchers also found bank records showing donations from the synod to the Rural Life Outreach program in amounts five to 20 times the annual budget.

Larson volunteered as financial manager of the RLO program, a nonprofit that provides last-resort financial aid to farmers and others who need help paying their bills. The synod donates $1,000 annually to the program, which pays companies directly for the outstanding bills.

Jon Evert, the RLO program's coordinator, said it continues to operate as officials try to figure out what happened.

"We don't really know the long-term outcome of it," Evert said. "We don't think he stole anything from us, but kind of used us as a pass-through for the money from the synod."

Wohlrabe and several of his staff spoke with Moorhead police Jan. 1. The next day, in an interview at police headquarters, Larson told an officer that he wrote checks from the synod accounts to the RLO account in amounts well over the approved budget, the affidavit states. Synod employees told police their signatures were forged on some of the checks.

Larson told police he started out writing $5,000 checks to himself and his wife from the RLO account but eventually wrote them for higher amounts, the largest being a $25,000 check last November, the affidavit claims.

He told officers he first started writing the checks because RLO didn't have enough money to handle the number of emergency requests from families.

But Larson said that the thefts "became a habit," he knew it was a mistake from the beginning and he took money from the synod and RLO for about two years, the affidavit states.

Messages left Wednesday on Larson's home and cell- phones weren't returned.

Police believe Larson deposited "a significant portion" of the money into his checking or savings account at Northwestern Bank, 2405 8th St. S., Moorhead, the affidavit states.

Police initially obtained a search warrant for the accounts dating back to Jan. 1, 2009; a second warrant was granted Tuesday covering the years 2004 to 2008. Both warrants were carried out at the bank Wednesday morning, court records show.

Police said in the search warrant affidavit Larson is suspected of possibly using embezzled money to pay off a car loan from 2007 and a house loan from 2008. Larson speculated in a police interview that a lot of it may have gone toward his $150,000 house renovation.

Wohlrabe said Wednesday that he didn't want to comment on information in the affidavit before seeing it.

He wrote in his letter to church members that the synod has contracted with Eide Bailly of Fargo to audit its financial records during Larson's tenure. Fiebiger, Swanson, West & Company of Moorhead is now managing the books for the synod, which plans to file an insurance claim to seek repayment.

Wohlrabe also wrote that the synod will review its financial management policies and procedures.

"It is vital that we learn from what has happened in order to minimize the possibility of such financial misconduct in the future," he wrote.

This isn't the first time a synod bookkeeper has been investigated for financial wrongdoing.

Larson's predecessor, Rosemarie Johnk, was fired in May 2004 for failing to prudently manage funds and follow internal controls, including not making deposits in a timely manner, then-Bishop Rolf Wangberg told The Forum at the time.

Johnk later pleaded guilty to theft in Clay County District Court for making nearly $24,000 in unauthorized purchases. Prosecutors alleged she forged a credit card application on the synod's account and charged nearly $13,000 on it as well as other purchases on synod credit accounts.

Johnk was sentenced in January 2006 to six months of electronic home monitoring and two years of probation. She also was ordered to pay $23,938 in restitution to the synod within two years.

Court records show she paid the money back by Dec. 14, 2006.

Wohlrabe said Wednesday that he wasn't bishop at the time and doesn't have direct knowledge of the Johnk case, but added, "I believe that there were some critical changes made in the office by my predecessor."

One of the key changes, he said, is the bookkeeper no longer handles deposits.

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