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story.lead_photo.caption Missouri State Auditor Nicole Galloway, center, announced the results of her audit of the Callaway County Collector's Office on Monday. The audit discovered more than $300,000 in missing funds, she said. Callaway County officials including Presiding Commissioner Gary Jungermann, left, Prosecuting Attorney Christopher Wilson, Auditor Karen Rentschler, Commissioner Roger Fischer and Sheriff Clay Chism were present. Photo by Helen Wilbers / News Tribune.

The former Callaway County collector has pleaded guilty in federal court to embezzling nearly $300,000 from Callaway County taxpayers, according to a news release Monday from the Office of the United States Attorney in the Western District of Missouri.

The guilty plea by Pamela J. Oestreich, 59, of Fulton, comes after an investigation by the Callaway County Sheriff's Office and the FBI.

"On more than 100 occasions, this public official stole directly from the people she was elected to represent," U.S. Attorney Tim Garrison said in the release.

"(Oestreich) will be held accountable for violating the public trust and abusing her position. The government will seek a significant prison sentence and repayment of what was stolen from the taxpayers of Callaway County," Garrison added.

Oestreich waived her right to a grand jury and pleaded guilty before U.S. Magistrate Judge Willie J. Epps, Jr. to one count of stealing from an organization that receives federal funds.

Her plea admits she "disbursed taxpayer funds for her personal use on 103 occasions beginning in September 2015." The U.S. Attorney's office explained Oestreich deposited taxpayer funds into her own personal bank account and moved taxpayer funds between 
Callaway County bank accounts to conceal her thefts of cash deposits at the Callaway County Courthouse.

She also made $19,430 of payments from her personal account into the Callaway County Collector accounts to hide her theft.

Missouri State Auditor Nicole Galloway announced Monday that former County Collector Pamela Oestreich stole about $300,000 in just more than two years.

"To see taxpayer dollars abused in this way is deeply disappointing," Galloway said during a press conference.

Oestreich had been in office since March 1999.

"I was shell-shocked, to say the least," Presiding Commissioner Gary Jungermann said. "I've known her for years."

He said commissioners see themselves as caretakers of taxpayer dollars and are working to rectify the situation.

No information as to Oestreich's possible motives has been made publicly available. She will face a sentencing hearing during which she could receive 41-51 months in federal prison, according to the Office of the United States Attorney in the Western District of Missouri. She will also be required to pay restitution.

Prosecuting Attorney Chris Wilson said civil action is also a possibility.

Central Bank officials reported suspicious activity in a collector's office-controlled checking account on March 15 and reported it to Wilson. Following that meeting, the prosecuting attorney informed Callaway County Sheriff Clay Chism of the report, then Chism and Wilson contacted the FBI.

"We wanted to make sure there was no sense of impropriety during the investigation and prosecution," Chism said.

Oestreich met with Jungermann and Chism and tendered her resignation immediately.

The case was investigated by the Callaway County Sheriff's Office and the Federal Bureau of Investigation, the Department of Justice stated.

On March 19, county commissioners requested a state audit, which is required by law any time a county collector's seat is vacated. The audit began March 26.

During a Monday press conference, Galloway praised county officials for their cooperation with the audit.

"I appreciate their quick actions to allow my auditors to work," she said.

Galloway said her office looked primarily at the timespan between Jan. 1, 2016, and March 15 of this year.

"We did not note any significant suspicious activity prior to that (time)," she added.

Press releases from Galloway's office and the Department of Justice differ slightly as to the exact amount of diverted funds. Galloway stated her office found at least $316,758 had been misappropriated in the above-mentioned timespan.

The Justice Department said Oestreich embezzled $299,387, beginning in September 2015.

Both sources agree on how the embezzlement occurred, and how it was covered up.

Many cash tax payments taken to the collector's office simply never got deposited, to the tune of approximately $244,000. On 35 occasions, all cash collected for the entire day went missing.

"One hundred and thirty deposits were made with cash shortages," Galloway said.

At one point, Oestreich deleted a tax bill totaling more than $74,000 to cover stolen funds, the auditor's office reported. Oestreich also wrote herself about $71,000 in checks from county funds, Galloway said.

To conceal the missing funds, Oestreich made payments totaling $19,340 from her personal bank account, the Justice Department stated. Once those funds started running dry, she dipped into an account used to manage payments made by taxpayers on an installment basis, Galloway said.

"In other words, it was a shell game," Galloway added.

Jungermann said the missing funds would likely have been caught during the next annual county audit. In fact, while conducting the annual audit for 2016-17 shortly after Oestreich's resignation, external auditors immediately picked up on the missing funds, he said.

"(Oestreich) had planned vacation time during the annual audit," Jungermann said. "I think the writing was on the wall and she knew it, though that's just a guess."

According to the Justice Department, Oestreich will be required to pay $279,957 in restitution to Callaway County. County officials hope the surety bond she was under, like all public officials who handle public funds, will cover part of that sum.

Because some of the stolen money was tax payments that went unreported, taxing entities such as cities and schools will be receiving part of that restitution, Jungermann said.

"We're still trying to determine which taxing entities were affected," he said. "They're aware they probably have some money coming to them."

Beyond the money, there's also the matter of rebuilding public trust in the county government.

"Whenever there's a theft or fraud, there's a break in public trust," Galloway said. "This is the place they can start rebuilding that trust."

The theft was possible in part due to lack of adequate monitoring and oversight of the collector's office, Galloway said.

"What we recommend are better checks and balances," she stated.

Her office's report outlines steps the county can take to improve its oversight and prevent future problems, such as better segregation of duties, independent reviews of accounting and bank records, allowing the county clerk to verify the accuracy of the county's tax books and many others.

Jungermann and County Auditor Karen Rentschler said the county was already working to implement the changes. Galloway's office will be following up with the county in a few months, Rentschler added.

"We have some homework to do," Jungermann said.

This is a day Jungermann never saw coming, he added.

"I think all of us, as elected officials, are feeling pretty betrayed," he said. "We're the ones left answering all the questions."

Reporters Helen Wilbers and Phillip Sitter contributed to this report.

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