Evart city council woman was accused of embezzling funds from former employer

REED CITY — Virginia Staats was found not guilty last Thursday of embezzling money from her former employer, Evart-based attorney James White.

Staats was charged in Osceola County’s 49th Circuit Court with one felony count of embezzlement of $50,000 but less that $100,000. The maximum penalty on this charge is 15 years in prison.

The charges stemmed from a complaint filed by her former employer.

When the alleged embezzlement took place, Staats was also a sitting member of the Evart City Council and White was Evart’s city attorney as well as maintaining his private practice.

Because of the connections to city government, Ocseola County Prosecutor James Sims sent the case file to Attorney General Bill Schuette, asking the state to consider placing another prosecutor on the case. As a result of this request Wexford County Prosecutor Mark Smathers handled active prosecution of the case.

In his closing argument, Smathers said Staats was operating under the “... theory of the big lie.”

During the more than three hours Staats spent on the stand on Thursday, she spoke of times when she claims she was asked by White to conceal payroll checks by logging them as medical insurance checks to keep his expenses high for tax purposes.

She also claimed she was required to collect unemployment and file a 1099 tax form, which is used for income other than salaries and wages, to cover what she made while working for White.

“I started making copies of documents because I felt the need to protect myself,” Staats testified, adding that she kept track of her checks on a ledger hidden in her desk.

She was not able to retrieve the ledger after being fired last year, and no other witnesses testified to its existence.

Smathers said Staats’ account of financial operations at White’s office didn’t add up, noting that some of the questionable checks issued to her were for the exact amount of her monthly car payment.

“The innuendo is that Jim is the kind of shady character who would do this and agree it should not be written in the books. With the wages she was being paid and bonuses she was authorized to take, she was the highest paid employee in the office (but) the least educated,” Smathers said in his closing statement.

“She wanted more money. ... She felt entitled to more than was agreed on by Jim White.”

Elmore argued that White was responsible for the “errors” on the books and Staats was simply doing as she was instructed by her boss.

“Once you start falling and you’re cheating everyone in the system and you’re hiding money from municipalities, the world starts to look different,” Elmore said. “You are a liar, and you can’t get out. That is Mr. White. ... Ginny, at best, got suckered in by her boss. She didn’t want to lose her job.”

Following the verdict, Elmore said his client plans to stay active on the municipal board. Staats is running for re-election to the City Council in the November election.