Former Milligan College postmaster pleads guilty to misappropriation of postal funds

   GREENEVILLE -- Harry S. Mattice Jr., United States Attorney for the Eastern District of Tennessee, announced that Robert Wayne Larkin, 51, of Johnson City, appeared Monday before District Judge Thomas G. Hull in U.S. District Court and pled guilty to a one-count felony information charging Larkin with misappropriation of postal funds.
   A statement of facts filed in the case stated that Larkin was employed by the United States Postal Service (USPS) as Postmaster for the Milligan College Post Office from 1982 until Dec. 13, 2001. Between Jan. 28, 1997, and Dec. 12, 2001, on about 62 separate occasions, Larkin failed to properly account for checks received from Milligan College and Emmanuel School of Religion, usually for permit imprint mailings, which permitted Larkin to embezzle and unlawfully convert about $51,599.80 in funds of the United States Postal Service.
   In early October 2001, the United States Postal Inspection Service (USPIS) received information that Larkin might have misappropriated funds received from Emmanuel School of Religion, Johnson City. The school had issued a check, dated Sept. 21, 2001, in the amount of $1,300 to Postmaster, Milligan College, Tenn., "to mail the school's publication, 'Envoy.' The articles mailed did not have postage stamps affixed, but instead were mailed using a "permit imprint." Articles sent by this method must bear a permit imprint indicia showing that payment for the postage was made at the time of mailing. On Sept. 24, 2001, Larkin deposited the check into a U.S. Postal Service bank account, but, on his daily financial report, had included the amount of the check in the amount of postage stamps he had purportedly sold that date. This created an overage in Larkin's stamp credit. By then converting postal funds to his personal use by either removing cash or issuing money orders for which payment had not been made, he reduced that overage.
   Emmanuel School of Religion was contacted to determine when they would be mailing their next issue of "Envoy." The mailing occurred on the morning of Dec. 12, 2001, and the permit imprint mailing was paid with a check in the amount of $1,439.00, $1,314.29 of that amount being for the permit imprint mailing. That same afternoon, a postal inspector, his identity unknown to Larkin, purchased $170 in postage stamps from Larkin at the Milligan College Post Office and paid using marked currency. Larkin completed a PS Form 1412, Daily Financial Transaction Report, which reported the deposit of the check from the Emmanuel School of Religion and a deposit of $598.53 in cash, but did not reflect a permit imprint mailing in that amount, instead reporting stamp sales of $1,753.39.
   The following morning, Dec. 13, 2001, a USPS auditor went into the Milligan College Post Office. Larkin unsuccessfully attempted to keep $910 worth of stamps from being included when the auditor inventoried his stamp credit. That inventory found an overage of only $886.59. Included in his stamp credit was a 50-dollar-bill the postal inspector had used to purchase stamps the previous day. While the bank deposit contained a 20-dollar-bill used by the postal inspector, a one-hundred-dollar-bill the inspector had used had not been deposited nor was it in Larkin's stamp credit. On Dec. 14, 2001, another USPS employee was assigned to replace Larkin, and five days later, the missing one-hundred-dollar-bill was found hidden under documents on a desk inside the Milligan College Post Office.
   Working with employees of Emmanuel School of Religion and Milligan College, the postal inspector obtained information on checks issued by those institutions for permit imprint mailings for the past five years. On 62 separate occasions between Jan. 28, 1997, and Dec. 12, 2001, Larkin had received and deposited checks from the schools but had not reported them as payments for permit imprint mailings. Rather, the amounts were reported as postage stamp sales, which decreased the reported balance of Larkin's stamp credit. Since the transactions were not actual sales of postage stamps, there was no actual decrease in Larkin's assigned stock of postage stamps. Had conversion of postal funds not occurred, periodic audits of Larkin's stamp credit should have found Larkin to have had much more stamp stock than his reported balance; however, no large overages were noted.
   Larkin was interviewed by postal inspectors on Feb. 6, 2002. Larkin stated that, during the first half of his 21-year career as Milligan College postmaster, he had done everything "by the book." Larkin related that, some time after failing to receive a promotion in 1992, he began misreporting checks received for permit imprint mailings. Larkin admitted that he had removed cash from his stamp credit on several days after he deposited the checks and had converted the cash to his personal use.
   Larkin was released on a $10,000 recognizance bond to return for sentencing on July 15 at 9 a.m.