Knoxville woman sentenced to 40 months for theft of government funds

A woman was sentenced in Knoxville to serve 40 months in prison for theft of government funds, according to a news release from the U.S. Attorney William Killian.

Kathy Winters, 58, of Harriman Tenn., will be under supervision for three years after being released from prison and is ordered to pay a total of $428,076.94 in restitution, according to the release.

In May 2014, Winters pleaded guilty to theft of government funds from the U.S. Department of Education. In the fall of 2012, the Tennessee Comptroller of the Treasury became aware of irregularities in the Tennessee Attendance Supervisors Steering Committee's (TASSC) bank account during the time Winters had access to the funds, the release said.

The investigation expanded when investigators found that she also served as federal projects administrative assistant for the Alcoa City School District and treasurer for East Tennessee Attendance Supervisors Association (ETASA). The expanded investigation showed that ETASA lost $1,236.36, and Alcoa City School District lost $344,203.79, which included federal grant money paid to the school district for special educational expenses, according to the release.

Winters took the money by creating false invoices which demanded payment to TASSC or ETASA, forging an official's signature and forwarding them to Alcoa City for payment. Winters then endorsed the checks issued by Alcoa City as payment for the false invoices, and deposited the funds into her personal account or into either the TASSC or ETASA account, withdrawing the money by a check payable to her or through ATM withdrawal, the release said.

The Tennessee Comptroller's Office, Financial Compliance Unit and Tennessee Bureau of Investigation were all included in the investigation, and Assistant U.S. Attorney Brooklyn Sawyers represented the United States.

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