HOUSTON -- Former Houston Deputy Clerk Kathy Smith was booked into the Chickasaw County Jail Friday morning, Feb. 26, on one count of embezzlement, according to jail records.
She has been released of $25,000 bond, records indicated Saturday afternoon.
Smith was suspended by the Houston Board of Aldermen in March, 2018. City officials said at the time they were awaiting the results of an audit.
Smith was suspended with pay, following a 4-0 vote by the Houston Board of Aldermen, while an audit and investigation was to be conducted into books and procedures at City Hall.
Ward 1 Alderman Kellie Atkinson, Ward 2 Alderman Shenia K. Jones, Ward 3 Alderman Frank Thomas and Alderman-at-Large Barry Springer all voted for suspension. Ward 4 Alderman Willie Mae McKinney was not at the meeting.
At the time of her suspension, the city’s website listed Smith as the deputy clerk and Houston’s purchase clerk.
This is now a state criminal investigation.
A demand letter showing she owes $131,697.00 was presented to her upon arrest. The demand amount includes interest and investigative expenses, according to State Auditor Shad White.
Smith is accused of embezzling cash and money orders meant to pay fines levied in Houston Municipal Court. To conceal the embezzlement, she allegedly manipulated records in computer software used to track court-ordered fines.
Smith purportedly manipulated records to show payments made by “public works” although no fines were actually paid by public works from January 2013 to April 2018, the timeframe of the alleged embezzlement.
If convicted, Smith faces up to 20 years in prison and $5,000 in fines. All persons arrested by the Mississippi Office of the State Auditor are presumed innocent until proven guilty in a court of law. The case will be prosecuted by the office of District Attorney Benjamin Creekmore.
A $50,000 surety bond covers Smith’s employment as municipal court clerk in Houston. Surety bonds are similar to insurance designed to protect taxpayers from corruption. Smith will remain liable for the full amount of the demand in addition to criminal proceedings, White said.
Suspected fraud can be reported to the Auditor’s office online any time by clicking the red button at www.osa.ms.gov or via telephone during normal business hours at 1-(800)-321-1275.