Stolen: over $430,000 from Cherokee County tax office (and they won't report who did it)

They won't tell you who stole $431,375 out of the Cherokee County, TX courthouse over a 5 year period. 

Every wonder why your property taxes keep going through the roof each year? It was quietly reported in July 2022 that the Texas Rangers were investigating the disappearance of over $430,000 in funds from the Cherokee County, TX Tax Assessor-Collector's office.  (Source: Funds missing from Cherokee County tax office, KLTV) After all the hemming and hawing with the County Appraisal District's property tax shortfalls, even blaming "clerical data entry mistakes," there is a simple reason why the county tax roll levy doesn't match what is reported to the State Comptroller. (Source: Jacksonville council calls for chief appraiser’s removal,  Jacksonville Progress)

County commissioners gear up to sue courthouse thief before their unnamed coworker is charged. Or will she ever be charged?

Will she be indicted by her cousins at all? After several forensic audits, $431,375.91 was confirmed stolen between 2015 and 2021 by an elected official in the Cherokee County Tax Assessor's Office.  Instead of publishing the name of the former Cherokee County official responsible for the missing money, the Cherokee County Commissioners Court is suing the unnamed female embezzler in Civil Court with the help of Tyler based attorneys Flowers Davis PLLC. (Source: County leaders to pursue civil suit in tax office theft case, Cherokeean)

In 2021, an internal audit of the Tax Assessor’s Office revealed county documents did not match what was reported to the state comptroller, said the Cherokeean.

Another audit was conducted by an outside company, and they also found there was an inconsistency and that $431,375.91 was missing, said officials. This was allegedly taken between 2015 and 2021 by an employee who had worked for the county for several years, according to the Cherokeean.  (Source: Cherokee County Commissioners Court votes to begin civil suit after money stolen from county tax office, KETK)

Cherokee County Commissioner's Court "...we're gonna get that money back from her, but we ain't gonna tell you who stole it..." (Courtesy: Jacksonville Progress)

 

 

Putting the cart before the horse.

With countywide elections around the corner, County Commissioners are eager to appear on top of the $430,000 stolen out from under their noses. They've announced a lawsuit against a still unnamed and unindicted defendant who is apparently related to members on the last two sitting 2022 Grand Juries. This gives the District Attorney's office time to wrangle with the thief's cousins behind closed doors before a potential trial jury is hand-picked and she is offered a settlement. Of course local media doesn't question the bass-ackwards civil suit against an undisclosed former county employee who hasn't been charged with an actual crime. In the interim you are to assume a low level courthouse clerk is capable of doctoring the books of nearly half a million dollars reported to the State Comptroller. They wouldn't lie to you...

Friends in low places

Will Elmer Beckworth recuse himself?

The "investigation" into the missing $430,000 began in January 2022; it was hidden from the public for 7 months until being leaked to the press in July 2022.  It's been over a year since the initial audit confirmed the stolen $430,000 and there are no reports of any criminal charges being filed by good friend Cherokee County District Attorney Elmer Beckworth who works in the same building as the thief.  As does Chris Davis and the entire Commissioners Court. She always brought cookies for everyone...

Gina Upshaw, (4th from the left) et al are lauded with their 15-year service awards, circa 2019 (Jacksonville Progress).

 "Just pay back what you can and don't talk to nobody..."

 

 Missing vs. Stolen

Audit reveals over $430,000 missing from county tax office, July 13, 2022- Jacksonville Progress

An internal audit of Cherokee County offices and departmental accounts revealed a discrepancy of $431,375.91 related to the tax office.

“Red flags were discovered by my internal auditor in doing a routine part of the audit that initially drew our attention to this,” said Cherokee County Auditor Steven Daughety. “We did do an audit report. Those findings were turned over to the D.A. because of our concerns with it.”

The information was presented to the district attorney on January 12, 2022, according to Daughety. 

District Attorney Elmer Beckworth confirmed only that the Texas Rangers were investigating the matter and that, if the missing amount is proven, the offense would be considered a felony. When questioned about the forensic auditor Daughety said was retained, Beckworth would only speak in generalities, stating the hire of a forensic auditor in such cases would be standard procedure. (Source: Daily Progress, July 13, 2022)

Where are the feds and the Attorney General?

Cherokee County voters are supposed to remain in the dark while their tax dollars are embezzled in the Rusk courthouse. Imagine the response in neighboring Smith County (with a population and budget 5 times the size of Cherokee County) if a mere $4500 went missing from the county tax rolls.  The suspected official's name and face would be all over the 6 o'clock news. Commissioners jumping the gun with a civil suit, before a criminal case has been made by the District Attorney's office, portends the Dog & Pony Show leading up to the May election cycle.  Local media does not make the correlation between hiding the identity of government thieves and their incentive to keep stealing. Obviously, they're all in on it.

Footnote 6/2/23: Gina Upshaw, 62 from Rusk TX was formerly indicted by a Cherokee County grand jury for stealing $431,375.91 from taxpayers during her tenure as Tax Assessor bookkeeper. Of course, no one in the Rusk courthouse has ever met her, or laid eyes on her. They do hope you enjoy your ever increasing property tax hikes (Source: Cherokee County tax office bookkeeper indicted for theft, money laundering, KETK).

Gina Upshaw receives 15-year service award, circa 2019 (Jacksonville Progress).

Gina Upshaw, was employed for 18 years at the Rusk courthouse with the County Clerk's office, and later handpicked by the Commissioners Court as the Cherokee County Tax Assessor Collector Bookkeeper.  (courtesy KETK)

Alto ISD manipulates enrollment, gets UIL suspension; Property tax disasters postponed

It's better to be a big fish in a small pond.

County Judge Chris Davis' alma mater is currently under a 3 year UIL probationary suspension for misreporting the number of students in attendance. Alto ISD football had been playing with the big boys in the 2A- Division I conference for several years. In 2021, they dropped themselves down to Division II after a long losing streak.

2A Division I: 165.5 - 229 students
2A Division II: 105 - 165.4 students

(Source: UIL)

On Aug 2, 2022, UIL ruled unanimously Alto High School football ineligible for playoffs for 2 years, and on probation for 3 years. They don't have a thousand kids to keep track of; there are less than 166 enrolled students per conference cutoffs.

The vote comes after violations of conference based enrollment reporting. The UIL said the Alto, TX school district turned in enrollment numbers that were not accurate and affected Alto in realignment which moved them into conference 2A-II instead of conference 2A-I. (Source: KLTV)

This is only newsworthy to regional football teams, however it is yet another example of the systemic flipping of facts of practically everything that comes out of Cherokee County. And the padding of enrollment numbers to get into a larger state football conference and the dropping of a few to get into a more competitive one when things don't work out. It is being reported the UIL Committee realigned Alto ISD because of an alleged "error" involving three late enrolled students. The football team has currently been playing the 2021-2022 season in the lower ranked 2A Division II. 

The Jacksonville Progress reports the UIL was alerted by two former employees that Alto ISD deliberately misrepresented enrollment numbers to remain in its winning football conference.

An allegation by two former Alto Independent School District employees, one of which resigned and the other terminated — was submitted to the UIL earlier this year stating that the district had under counted it students on Snap Shot Day (Oct. 30, 2021).

The UIL investigation revealed that the district's 163 number did not include three students who began class in the district on Oct. 19-20, 2021. These students were officially reported as being enrolled in the district on Nov. 1, 2021.

Dr. Jamey Harrison of the UIL reminded everyone that schools were sent a Snap Shot Verification form on Nov. 16, 2021, so that corrections could be made to the number submitted if needed.

Alto officials signed off on the form, confirming that the original number sent in was correct. (Source: UIL Executive Committee rules Alto football ineligible for district awards, Jacksonville Progress Aug. 2, 2022)

The fact the Alto ISD superintendent blames the high school counselor and principal for the SNAFU tells you exactly who is running this train.

Property owners get railroaded with defaulted school taxes.

Texas school districts are funded from county property taxes and directly from the state. As of 2022, each district receives an allotment of $6100 per student each year. Federal funding is also distributed based upon need and attendance. After years of misappropriations, reporting has ceased on how delinquent school taxes are resolved after being passed on to property owners.  To date, state government watchdogs have overlooked this reverse Robin Hood. They know if they start asking questions, so called "conservative" Cherokee County and neighboring counties would flip to Democrat in a New York minute. They'd rather watch the place implode.

One disaster after another.

Jacksonville and Rusk school districts voted to increase property taxes to cover their combined $1.7 million tax deficits, to avoid being penalized by the Texas Comptroller's Office. Commercial real estate appraisals came in 15% lower than actual market values according to MAPS audits conducted by the State in 2018 and 2019. (Source: Cherokee County Appraisal District fails state property study, Daily Progress Feb. 13, 2020) Timber and agricultural exemptions in rural areas were blamed for CCAD's tax shortfalls, not the commercial and Section 8 rental properties of board members.

Cherokee County TX Chief Appraiser: "This is insane."

Cherokee County blames the Tax Code for devaluing the property of those controlling the purse strings, and passing costs onto those not in the clique. It's just so "confusing and unfair" according to Chief Appraiser Lee Flowers who Jacksonville City Council recently voted unanimously to remove from office for a $5 million tax "mistake." The CCAD Board of Directors who own a big chunk of property in the area of course voted to keep Flowers on the county payroll.

The Jacksonville city council called for the removal of Cherokee County Chief Appraiser Lee Flowers in May 2021 over pending litigation from conflicting numbers on an amended tax roll levy.

City Manager Greg Smith stated the city had lost $200,000 in tax revenue as a result of the difference in original tax levies Flowers deemed "clerical data entry mistakes." (Source: Jacksonville Progress May 15, 2021)

Source: CCAD 2022 Newsletter

 (Click to view)

The Texas Comptroller of Public Accounts has done "limited scope" property tax appraisal audits since the 2018 failures, thanks to County Judge Chris Davis and Governor Greg Abbott declaring Cherokee County a disaster area right in time to cleverly circumvent in-depth biennial MAPS reviews. Never forget, as Attorney General, Greg Abbot's office also did not pursue criminal charges against those who robbed Lon Morris out of existence, Texas' oldest Junior College. Offended locals would jump party lines if their kinfolk were exposed manipulating enrollment and Financial Aid. They were such good stewards of your tax dollars and public trust funds. Keep forking it over, folks. You know you love it.

Everyone gets good marks during election year.

They also hope you forget about the $431,375.91 stolen out of the Cherokee County Tax Assessor-Collector's office. Stealing hundreds of thousands of dollars each year out of the Rusk, TX courthouse apparently doesn't get the attention of the governor or Attorney General.

Funds missing from Cherokee County tax office - July 12, 2022

RUSK, Texas (KLTV) - Texas Rangers are investigating the disappearance of funds from the tax office in Cherokee County.

District Attorney Elmer Beckworth said the office notified him about missing funds and he forwarded the case to Texas Rangers.

Beckworth said he could not comment further on time periods or how much money was missing.

The county auditor’s office deferred comment to Beckworth. (Source: KLTV)

Audit reveals over $430,000 missing from county tax office - July 13, 2022

An internal audit of Cherokee County offices and departmental accounts revealed a discrepancy of $431,375.91 related to the tax office.

“Red flags were discovered by my internal auditor in doing a routine part of the audit that initially drew our attention to this,” said Cherokee County Auditor Steven Daughety. “We did do an audit report. Those findings were turned over to the D.A. because of our concerns with it.”

The information was presented to the district attorney on January 12, 2022, according to Daughety. (Source: Jacksonville Progress)

Cherokee County property tax appraisal – How taxpayers pay for nepotism

State Comptroller- Those with property in Cherokee County owe the State in school taxes:

Jacksonville ISD- $1 million

Rusk ISD- $700,000

Cherokee County, TX:
For decades land owned by the Good Ol’ Boys and Biddys has been appraised at a substantially lower (almost zero) tax rate compared to property owned by those not in the clique. A quick online review of elected officials’ appraised property tax values shows the glaring discrepancies. Cherokee County appraises commercial property in Jacksonville at 15% below actual market value, and 35% below realistic estimates in Rusk according to a recent State Comptroller’s property tax audit. (Source: Daily Progress)

Local attorneys, JEDCO and Chamber of Commerce members own the most valuable commercial and rental properties in Cherokee County and have favored status with the Cherokee County Appraisal District. They own the Low Income Housing, the halfway houses, and the old folks' homes, i.e. privately owned subsidized Section 8. They get first shot at federal housing authority grants.

Even though they own the majority of taxable properties within Cherokee County, they do not share the tax burden.

On the other hand, those who are not in the good graces of CCAD are hit arbitrarily with high taxes and lawsuits, forcing many to leave. To mitigate the loss, out of region companies are enticed to set up shop and pay into the County coffers or they too risk being sued out of existence. By hook or by crook, Cherokee County puts nepotism over the needs of its residents, regardless of the dwindling tax base loss to local school districts. Property owners living outside the county coterie can expect their Balance Due Notices in the mail first.

Why should those who run the county into the ground pay property tax?

In 2012 the State Comptroller's Office found the Cherokee County Appraisal District "UNSATISFACTORY" in its operational procedures and ability to implement a reappraisal plan. (Source: State Comptroller) School district tax values would continue to be reported too low under the State's enhanced Methods and Assistance Program auditing every 2 years.



School Board elections have consequences.

In 2015, Cherokee County had failed the State's audit of Non-Farm properties along Lake Striker in the New Summerfield School District. Residential sales were "not previously available" and those they recorded were as far as 25% below actual Market Value. Kinfolks' homesteads on Lake Striker had their unpaid tax liability limited at a 10% increase, while the rest of the county taxpayers made up the difference. (Source: Cherokee CAD) This shell game keeps the public from petitioning for a property tax rollback election and School Board members will never vote for a tax rate rollback. (Source: Texas State Comptroller)

 


















Do you know who is on your Agricultural Appraisal Advisory Board? 

In a 2015 property tax exemption workshop held in Jacksonville, TX for Cherokee County landowners, Chief Appraiser Lee Flowers blamed farmers' excessive agricultural and timber exemptions for the low residential property values. Meanwhile lake front property sales taxes are skirted or not recorded at all.

Cherokee County landowners fight tax break changes, March 29, 2015

Cherokee County Chief Appraiser Lee Flowers said around two-thirds of 2,900 property exemptions could be in jeopardy of failing to meet state requirements.

The district would require landowners with agriculture exemptions to provide proof of productivity and meet state production requirements. So landowners who produce hay must provide proof they are producing hay at amounts and quality levels consistent with state and regional numbers. Cow-calf operations would be required to meet per-acre head counts consistent with production requirements, he said.

A landowner claiming his property is an orchard, but only has four fruit trees on 10 acres, won't make the cut anymore, he said.

"We're aiming to stop abuses of what's required by state law," Flowers said. "So is it a qualified production operation or that ‘I just want lower taxes?'"

The same goes for land with timber exemptions. (Source: Tyler Paper, Cherokee County landowners fight tax break changes, March 29, 2015)

Two years later, the State Comptroller found in the 2016-2017 MAPS Report that Cherokee County's  Chief Appraiser had not appointed a qualified agricultural appraisal advisory board to meet once a year as required by Tax Code 6.21 (Source: State Comptroller)

 TAX CODE TITLE 1

Sec. 6.12. AGRICULTURAL APPRAISAL ADVISORY BOARD. (a) The chief appraiser of each appraisal district shall appoint, with the advice and consent of the board of directors, an agricultural advisory board composed of three or more members as determined by the board.

(b) The agricultural advisory board members must be landowners of the district whose land qualifies for appraisal under Subchapter C, D, E, or H, Chapter 23, and who have been residents of the district for at least five years.

(c) Members of the board serve for staggered terms of two years. In making the initial appointments of members of the agricultural advisory board the chief appraiser shall appoint for a term of one year one-half of the members, or if the number of members is an odd number, one fewer than a majority of the membership.

(d) The board shall meet at the call of the chief appraiser at least once a year.
(e) An employee or officer of an appraisal district may not be appointed and may not serve as a member of the agricultural advisory board.
(f) A member of the agricultural advisory board is not entitled to compensation.

(g) The board shall advise the chief appraiser on the valuation and use of land that may be designated for agricultural use or that may be open space agricultural or timber land within the district. (Source: Texas Property Tax Code)

The most recent 2018 audit "FAILED" the County's record keeping and property valuation procedures. (Source: State Comptroller)


  
Nepotism is a recipe for disaster.

The trend of not accurately recording real estate sales and shorting the State in property taxes continues today. 

As a result, the State Comptroller’s Office audit will penalize taxpayers $1 million in the Jacksonville School District and $700,000 in the Rusk School District.

The decision is on appeal. Taxpayers can expect another School Bond election and sales tax hike on the horizon. The school districts will ask for new facility funds that will actually go to pay off the tax deficit and funnel money back to Good Ol' Boy construction projects. Tax revenue from new construction will be excluded to solicit businesses while farms, ranches, and dairies will be hit hardest. As the State Comptroller found, Cherokee County "record keeping" does not pass the smell test.

Cherokee County Appraisal District fails state property study.

Feb 13, 2020
RUSK – Annual property study results recently released by the State Comptroller’s Office do not bode well for some Cherokee County taxpayers, said Cherokee County Chief Appraiser Lee Flowers.

According to information issued by the state Comptroller’s Property Tax Assistance Division, Jacksonville and Rusk schools could be penalized severely in state funding if a pending appeal by the appraisal district is not successful, Flowers said in a Feb. 12 release issued by his office.

“We first received notification on Jan. 31,” with amended updates arriving at his office later because “they've had to reissue numbers a couple of times,” Flowers said.
The state's study indicates the local appraisal district is below market value on both residential and commercial real estate valuations in the two school districts. The effect of an unsuccessful appeal could penalize JISD a million dollars and RISD $700,000 in overall state funding, according to the CCAD release.

Flowers said he doesn't agree with the state's overall assessment of commercial values, based on the market information available to his office.
“They (state findings) indicate we are 15 percent low on commercial real estate in JISD and 35 percent low on RISD commercial real estate. These types of property in our county are difficult for anyone to appraise,” he explained. “However, if the state has reliable data not previously available to us, we will analyze their information and move forward accordingly.”

Data from property value studies – which “looks at our values and our at-market values” – and something called a “MAP audit” (methods and assistance program audit) alternate each year, he said.
“The most recent MAP audit was in 2018, while the value study was in 2019,” he said, explaining that a grace period is what gaps the two.
“It is apparent that these schools might have received a grace period if not for a failure in the appraisal district’s most recent state procedures audit,” the CCAD release stated. “This grace period would have held the schools harmless in state funding for one year.”
For a school to qualify for the grace period, the state requires that the local appraisal district must score a “pass” on four key questions.

In 2018, the appraisal district missed one of those key questions, the release stated.
“That question contained 15 subparts. Of those subparts, Cherokee CAD passed all but one. In order for that key question to be considered a 'pass,' all 15 subparts must have been a 'yes.' Overall, the appraisal district successfully passed 77 out of 80 questions in the audit,” it added.

“The subpart preventing grace relates to the valuation of low-income housing. I made a decision to focus our resources on other critical matters relating to 2019 values, and take up the question of low-income housing data in 2020,” Flowers said, noting that the low-income housing question was not in previous audits.

He and his staff had from December to April to correct the deficiency.
“We would have appreciated either an earlier notice of the question’s inclusion or more time to assemble the data in order to properly implement the correction,” he said.
Currently, Flowers is appealing the value study, which has a March 23 deadline.
“Originally, it was March 11. The extra time can't hurt us, but that also delays any kind of resolution. If we think we have enough to file and feel comfortable in doing so, we'll file sooner,” rather than wait, he said.

Meanwhile, his office is focused on looking at all the properties considered by the state in their findings, and “we've submitted a request to see their work files,” Flowers said.
If the appeal is successful, the potential for loss to the schools could either be eliminated or substantially reduced, he said. (Source: Daily Progress)