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Insurance repays ELCA synod in alleged embezzlement case

MOORHEAD - A Moorhead-based Lutheran synod has recovered about $590,000 of the $714,000 that its former bookkeeper is suspected of embezzling, according to a letter to synod members from Bishop Lawrence Wohlrabe.

The Northwestern Minnesota Synod of the Evangelical Lutheran Church in America received a total of $590,012.72 from the synod's crime insurance coverage through the ELCA, Wohlrabe stated in the letter dated Tuesday and posted on the synod's website.

That means the synod has recovered 77.5 percent of the funds it believes former bookkeeper Robert D. Larson misappropriated between September 2004 and Jan. 2, 2012, the day he was fired by the synod, Wohlrabe stated.

"Although receipt of this significant insurance settlement does not mean that we have concluded our response to the misappropriation of synod funds by Mr. Larson, it is a significant milestone in our journey toward such a conclusion," Wohlrabe stated.

The remaining $170,632 that Larson allegedly misappropriated and transferred to the Rural Life Outreach program "cannot be demonstrated to have directly benefited Mr. Larson, based on the forensic audit," Wohlrabe stated in the letter.

Rural Life Outreach, a nonprofit that helped financially strapped farmers and others pay their bills, was dissolved last May. It had no remaining financial assets and didn't carry crime insurance coverage, Wohlrabe stated.

Larson, 61, of Wolverton, has not been charged with a crime and has declined repeated interview requests.

Assistant Clay County Attorney Heidi Davies said Wednesday she couldn't comment at length about the pending case.

"We're visiting with the interested parties. We're close to making a determination of who will proceed ... with the charging," she said.

Jon Evert, program coordinator for the rural outreach group, told The Forum last month that federal authorities were interested in the case due to potential income tax implications.

The synod plans to monitor the progress of the pending charges against Larson in the hope that a legal judgment will be made against him leading to a restoration of all misappropriated funds, Wohlrabe stated.

The synod also will reserve the right to sue Larson for any misappropriated funds that have yet to be recovered, following conclusion of the criminal proceedings against him.

Members of the synod support staff, in collaboration with its bookkeeper at Fiebiger, Swanson, West & Co., will continue to identify specific ways that the misappropriation of funds harmed ministries of the synod and ELCA, Wohlrabe stated.

"Although at times this painstaking work seems akin to hunting for a needle in a haystack, we believe we will be able to discover additional effects of the misappropriation of funds by Mr. Larson," he stated.

From the $590,012.72 insurance payment, the synod's executive committee has decided to pay $259,951.68 to the ELCA Hunger Appeal before the end of this month. That represents the funds that were given by synod congregations during fiscal years 2009, 2010 and 2011 but were not properly remitted by Larson to the ELCA Hunger Appeal, Wohlrabe stated.

The synod plans to retain the remaining $330,061.04 in a synod restricted fund, pending discovery of other ways in which the misappropriation of funds harmed synod and/or ELCA churchwide ministries, he stated.