Former CAFNR administrative assistant pleads guilty to embezzling more than $700,000 from MU

Published Date: 
Tuesday, June 7, 2016

COLUMBIA — A former administrative assistant with the Southwest Research Center in Mt. Vernon, Missouri, a unit of MU's College of Agriculture, Food and Natural Resources, pleaded guiltyMonday to embezzling more than $700,000 from the university.

Carla Rathmann, 54, waived her right to a grand jury and pleaded guilty to one count each of mail fraud and credit card fraud.

Rathmann was an employee of the research center from January 2000 until September 2015 when her use of a university credit card to make personal purchases was discovered.

Rathmann used the credit card to make unauthorized purchases such as a home remodel, dental expenses and herbicide for her home. 

According to a release from the U.S. Attorney's Office, Western District of Missouri, Rathmann also faked invoices and bills to MU to pay herself via three shell companies she created: R&R, R&R Agri and Garrett Farm and Oil. Rathmann and/or her husband, Thomas, were the registered agents for the companies, according to the the Secretary of State's online business filings.

An internal audit by the university identified two other shell companies: Rocky Road Farm and R&R Inc. The audit found she created fake payments for farm-related items such as propane and hay. In total, she paid $570,521 in university money to her shell companies.

The audit stated that her financial misappropriations were "a key factor" in the closure of the Southwest Research Center dairy operations in spring 2015. The audit also found that Rathmann stole grant money from three different federal and state sponsors: $3,330 from Agricultural Research Services, $3,158 from the Missouri Department of Agriculture and $35,116 from the National Institute of Food and Agriculture.

She admitted embezzling a total of $716,665 and making $146,144 in personal purchases with a university credit card. 

In a separate release from MU, the university estimated the scope of the thefts at $750,000, saying that additional credit cards thefts amounting to $27,178 had been discovered. These were not included in the charges filed against her. 

The release states that the university's insurer would cover $650,000 of the loss.

The thefts and embezzlement were detected by the university, according to the news release. Rathmann's administrative duties included receiving and paying bills, accounting and payroll for the center. She was paid $15.90 per hour before being fired, according to the MU salary database. 

In 2014, Rathmann and her husband placed an ad in the Barry County Advertiser for a moving liquidation auction. They listed a Samsung Plasma TV, a Yamaha Surround Sound System and leather furniture among a long list of household items for sale.

As part of her plea, Rathmann agreed to pay back $716,665. She could be sentenced to up to 30 years in prison without parole.

An internal investigation by the university found "a lack of fiscal oversight and accountability within CAFNR at the College, CAFNR Business Services office and Southwest Research Center levels."

According to the internal audit, factors contributing to the lack of financial accountability included:

  • Limited staffing in a remote location
  • Lack of an onsite superintendent for an extended period of time
  • Weak internal controls
  • Failure to adhere to University policies

The Southwest Research Center’s Superintendent, David Cope, first became suspicious of Rathmann a few months after he first started working for the university in July 2014, according to the audit. Rathmann was unwilling to share financial information with him. Cope first noticed unusual purchases on Rathmann's university credit card in July 2015 and reported his concerns to CAFNR Business Services. She was terminated for misconduct on September 21, 2015.

Cope worked as a loan officer at a bank before he was hired as superintendent, according to a 2014 CAFNR news release. He has a B.A. and an MBA in Agribusiness Management from MU.

Reached by phone Monday afternoon, David Cope confirmed that he was the person who detected the financial irregularities at the research center.

According to the audit, MU campus police were notified of an initial review of the matter by CAFNR in September, and the department then reported it to the Missouri State Highway Patrol. When contacted by the Missourian on May 3 about reports of embezzlement in CAFNR, MUPD spokesman Brian Weimer said he was not aware of any reports of embezzlement in the college.

Rathmann was released Monday on a personal recognizance bond.

Audit report:  https://uminfopoint.umsystem.edu/media/fa/audit/cafnr-investigation-audit-final-report.pdf