Former Shorewood schools secretary charged with embezzling $310,000 in special ed funds

Woman used money to buy electronics, gift cards and more

April 16, 2013

Shorewood - Donna Sternke, a former secretary at the Shorewood School District, has pleaded guilty to embezzling approximately $310,000 in special education funding from the district, according to federal court records.

The April 11 plea agreement alleges Sternke, who is in her mid-50s, embezzled the money between 1998 and 2011 while serving as a secretary in the Instructional Services and Special Education Department, abusing her purchasing abilities to buy big-screen TVs, household items and gift cards to the Kalahari Resort in the Wisconsin Dells, among other things.

According to the plea agreement, Sternke admitted to federal investigators that between 1998 and 2011 she used the district's computer system to create bogus invoices totaling $310,263.44. For instance, in February 2009, Sternke created an invoice for about $1,600 that she claimed was for an Hewlett-Packard laptop.

"In fact it was for her own 50-inch TV console and 37-inch Sony TV," the plea agreement reads.

By using falsified invoices to get checks from the district business office, Sternke also made in-store payments at Menards, JC Penneys, Target, Walmart, Best Buy, Kohls, American TV, as well as made payments on a personal credit card. She also paid for vacations and household purchases with district funds, often with gift cards.

Gift card raises suspicions

Sternke was allowed to resign in 2011 after the district discovered she had purchased gift cards to the Kalahari Resort and agreed to repay the amount of the gift cards, according to a district news release. At the time, she denied any further thefts until the district tracked the bogus invoices back to 1998 and later turned the case over to Shorewood Police Department and federal officials.

In the plea agreement, Sternke agreed to pay restitution of $310,263.44 to the district.

Superintendent Martin Lexmond noted in the release that Sternke's alleged fraud went unnoticed by each of the three independent auditing firms hired by the district between 1998 and 2011.

"Each company performed an annual audit of the district's financial accounts, including the funds Ms. Sternke embezzled from," Lexmond said in the release, "but did not find anything suspicious as it appears Ms. Sternke created false invoices and receipts that were very convincing."

Services unaffected

Because the district maintains a surplus in its special education fund, Lexmond's statement noted, services remained unaffected despite the repeated embezzlements.

"The false invoices created did not replace invoices for items teachers needed or requested," Lexmond said in the release. "Teacher requests for supplies and materials were fulfilled during this time period."

According to the release, in light of discovering Sternke's invoices the district has added steps to purchase orders which require additional documentation and requires administrative approval for staff attending professional conferences.

The School Board will field an update on the case at its April 23 meeting at 7 p.m. If convicted, Sternke could face a maximum sentence of 10 years in prison and a $250,000 fine.

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