State auditors have identified another $195,000 in improper payments in an alleged money-laundering and kickback scheme linked to Iowa Department of Transportation land sales.
Three men, including a former DOT employee, have been charged so far in connection with the alleged scheme to steal more than $775,000 from the DOT. A new audit released Monday resulted from tips that came into a financial crimes hotline.
David Weigel, 56, of Nevada, who worked as the DOT’s right-of-way agent from 1995 to 2011, has been charged with first-degree theft, conspiracy to commit theft, ongoing criminal conduct, money laundering and felonious misconduct in office.
Grady Marx, 59, of Sioux City, faces theft, money laundering, fraud and ongoing criminal conduct charges.
In July, the DCI also charged Jason Weigel, David Weigel’s 31-year-old son, for his involvement in the case. The younger Weigel faces charges that include theft, identity theft and ongoing criminal conduct.
The alleged scheme came to light after a whistleblower tip in 2011. An April 22 report from the State Auditor identified $581,000 of diverted collections, uncollected lease payments and improper disbursement.
The DCI set up a hotline April 20 that resulted in tips leading to Monday’s audit report showing an additional $195,350 of improper disbursements, improper disability benefits and uncollected lease payments.
Included in the improper payments was $117,700 the DOT issued to L Jay’s Construction. An unnamed informant that called the DCI hotline said he received the payment even though he didn’t perform any work for the DOT and wasn’t affiliated with a construction company, the audit showed.
“The payments were authorized by Mr. (David) Weigel and were not supported by invoices which were not prepared or submitted by the individual who received the payments,” the audit states.
After receiving the payments, the informant issued checks totaling nearly $112,000 from his personal checking account to or on behalf of Jason Weigel, the audit found. Most of the checks were deposited into David Weigel’s bank account. The informant kept the remainder of the money.
The informant isn’t likely to be charged in the case, Special Agent Adam DeCamp said.
The investigation is ongoing, DeCamp said, depending on what information comes into the DCI’s Financial Investigation Team’s hotline.”We don’t know what the next phone call will bring,” he said. The phone number is (515) 725-6290.