Lee airport payroll scandal losses reach $1 million, auditor says

A suspected scheme to steal money from the Lee County Port Authority by inventing "ghost" employees and issuing paychecks under their names for work never performed resulted in at least $1 million in losses over several years, the county's inspector general said Friday.

The reported loss may have been considerably more than $1 million because the county audit of the port authority's janitorial services only went back to 2014, the earliest that the state statute of limitations would allow prosecution in the case.

Inspector General Tim Parks said the first "ghost" employee found to have received pay for time not spent on the job at the Lee County facility was working the scam as far back as 2006.

The Lee County Port Authority owns and operates Southwest Florida International Airport and Page Field.

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Not only was money paid for work never performed, according to Parks' report, the report details a multiplier effect to the port authority's losses.

Janitorial services contractor Triangle Services of Valley Stream, New York was paid on a cost-plus basis. It was paid for the time its employees were on the job, plus $2 for every hour worked by an employee, Parks told The News-Press.

Airlines that have bases at Southwest Florida took smaller losses. The carriers pay for airport service and receive credits for a share of airport profits. The auditor said that he is aware of no airline complaints about the scandal eating away some of their expected profit-sharing.

In a formal response to the audit, Gary Duncan, the port authority deputy executive director for aviation, detailed several steps taken in response to the audit.

The airports improved their internal controls over payroll reporting, used electronic badges to make sure that people paid for work showed up, and received the resignation of the airport executive who oversees contracts for the port authority. 

Last December, 10 people were arrested and charged in the scheme, uncovered through an audit conducted by Parks. 

When potential criminal violations were discovered, the Florida Department of Law Enforcement was called in. Charges were brought and the suspects were rounded up. The suspects have each pleaded not guilty. Their next court appearance is set for April 8.

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While the audit report was completed nearly two years ago, it was held for release this month, first at the request of the state attorney's office while charges were prepared and suspects arrested. It then took several weeks for the auditors to finalize the report and receive feedback on its findings from airport officials.

The time sheet scandal allegations date back years before the appointment of Jeff Mulder as executive director of the port authority. Mulder was terminated by county commissioners earlier this year.  

Triangle Services executives could not be reached for comment. Calls to the company's New York state headquarters were transferred to company voice mail. 

Triangle also performs services for Miami and Palm Beach international airports. Parks said management at the Palm Beach airport called his office to discuss the Lee County findings. 

Parks said the investigation was spurred by tips to the inspector general's hotline, which is given prominent display on the front of Lee Clerk of Court Linda Doggett's website.

"We look at every single call that comes in," Parks said. "We look into it and see if there is anything that we can do about it."

The janitorial scandal dovetailed with a scandal over allegations of misuse of parking passes at Southwest Florida International Airport. In that scandal, the airport's former contracts administrator was accused of providing free parking privileges to family members.

"We had two tips, one focused on the parking pass issue and the second picked up on that, plus included the time sheet fraud," Parks said. "We were scheduled to do an audit anyway, so once we got a tip we decided to also look at the payrolls and that's what triggered it."

The allegations involved two basic methods of stealing port authority funds.

One, Parks said, involved creating "ghost employees" for the sole purpose of submitting time sheets to produce paychecks for work never performed.

The other was simple time sheet fraud — paying workers for more hours than they actually worked and paying some of them at hourly rates higher than what their experience and duties would justify.

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Intimidation of employees was also found, Parks said, with employees placed in lower paying jobs if they complained about the situation.

The inspector general's department has responsibility to ferret out fraud, waste and abuse in government spending and to conduct management audits intended to make sure agencies are doing the public's work efficiently. 

Parks said the county's two airports were cleaned to management's satisfaction, and with no complaints, the alleged theft was harder to notice.

"As far as performance goes, we did not go down that path, it did meet standards of cleanliness," Parks said. "The big picture was payroll fraud, but everyone was pleased with the performance."