Marlyn Schafer - former Gold Beach city councilor and mayor, former Curry County commissioner, longtime treasurer of the Gold Beach Senior Center and secretary/treasurer of the Curry Health District - turned herself in to the Curry County Sheriff's Office Friday to be booked on allegations of embezzling funds from the senior center.

A warrant was issued for her arrest after a grand jury indicted her Thursday on charges of aggravated theft, or theft over $10,000, from the senior center in Gold Beach. She was booked and, based on her medical condition and age, released, Friday afternoon.

According to senior center records distributed Friday morning, a total of $25,000 is allegedly missing, including $13,340 in cash from July 2013 to June 2014 and reports of Saturday breakfasts totalling $1,500. The report also shows unauthorized debit card expenditures totalling $10,262.

Schafer, 70, of Wedderburn, has served as treasurer of the organization since her appointment to the board six years ago. She could not be reached for comment Friday.

"My phone has been ringing off the hook," said Gold Beach Police Chief Dixon Andrews, who was out of town during the grand jury meeting. "This thing's taken on a life of its own."

He explained to senior center members Friday that the investigation was not a personal vendetta, although he acknowledged there are two groups - one supporting Schafer and the other angry - surrounding the incident.

"Something like this in a small group is very polarizing," he told about 20 members. "It's not about personalities. We followed a paper trail and it led us down the path that found compelling evidence that there has been a misappropriation of funds."

The investigation will likely involve witness testimony, computer zip drives, ledgers, checks, bank documents, lunch receipts, bingo game proceeds and debit card records. Schafer is being represented by former deputy district attorney Carly Kruse, now with Olin and Associates of Brookings. She was unavailable for comment Friday afternoon.

June 6, 2014

According to Gold Beach Senior Center member Margie Roberts, the unraveling of the alleged embezzlement started in early summer with a gust of wind.

Schafer was getting out of her car at the senior center on Airport Way on June 6 when the wind blew her vehicle door shut on her leg; the ensuing injury required surgery. And while she was incapacitated, others took over the senior center's finances.

Five days after Schafer was hospitalized in Coos Bay, Roberts was asked by the board to take over the senior center's books.

"I know QuickBooks. It was coming to the end of the fiscal year; things have to be filed," she said. "No one was thinking there was any misappropriation."

In retrospect, however, she thinks there were warning signs.

"I did have concerns," Roberts admitted. "She was secretive and controlling of the reports, QuickBooks and the checkbook. She didn't want anybody else doing it, even when she wasn't feeling well. It was, 'I'll do it. No, no; I'll take care of it.' That, to me, is secretive and controlling.

"The (members) really trusted her - she was a former city councilor, a county commissioner, the mayor, on the hospital board. What's not to trust? They were thrilled someone was willing to do it. They were blindsided and devastated by it."

So far, most of the discrepancy has been found in cash receipts involving senior lunches and bank deposits.

Roberts said she has since found other expenditures that have yet to be given to the district attorney for possible prosecution, including $10,000 in purchases with a debit card about which the senior center board had no knowledge.

Bank documents, Roberts said, indicate the card was even used to purchase $925.60 worth of signs - for Curry Health Network's "Save the General" campaign.

"We saw that invoice and thought, 'OK, this is a little more involved than I thought,'" Roberts said. "And then we started digging. And we have spent hours.

"That could be two extra charges," said Roberts. "Because she used the funds of a nonprofit and ... it's illegal to donate to a campaign. There's campaign fraud - you're talking jail time. That's huge."

Cash trails are difficult to follow, and that's where most of the discrepancies are showing up, she said.

"Two deposit slips are missing - they're ripped out and gone," Roberts said. "We had to get them from the bank. Both should've included lucrative Saturday breakfast money and they were andhellip; pretty lean."

The breakfasts usually garner $700 to $900, and those amounts aren't reflected in the deposits, she said.

"Then I was curious," Roberts added. "There was no information on vendors, like Food Service of America. There was nothing in those vendor files. I thought, 'How is she doing this, because she's giving us a report. How did she hide the $900.' It was found on the reconciliation.

"That's where she hid the checks she made out for herself," Roberts added. "She put them on reconciliations as Amerigas or King Soopers. It was very quickly established that she's been taking money."

Police involvement

Typically in Oregon, the statute of limitations on aggravated theft charges is three years, said Deputy District Attorney Jake Conde, who is working on the case. District Attorney Everett Dial has a conflict of interest, as he was the DA when Schafer was county commissioner.

Conde said that in some instances, prosecutors are permitted to go back further in the ledgers - up to six years - when alleged theft isn't discovered for some time.

"In some financial crimes, especially those that are discovered late, it might be six years," Conde said. "But for right now, the indictment only covers a period of three years."

Deposit slips are missing, Roberts said. Receipts for funds received for breakfasts are altered.

"Now we have to see if we can distinguish from the forms who was in charge of bingo, if those receipts match the deposits," she said.

The senior center's bingo license is already "conditional," as four revenue reports were submitted late to the state. Roberts fears what might happen to that license - and the enjoyment seniors get from going to the center to play.

"If she took money from bingo, that's gaming fraud, and the (state) Department of Justice would be more than interested in prosecuting her," Roberts said. "Then there's the IRS. This is huge, and this isn't someone who wouldn't know better. These are big things she needs to be nailed for."

The seniors

The Gold Beach Senior Center has 209 members, some of whom have second homes here.

"She stole money from the elderly," Roberts said. "There are a lot of elderly people who depend on lunches; for some it's the only source of food they get. They can't afford any other way, and she stole from them."

"I was incredulous," said Mary Ann Bartholomew, vice-president of the center. "I couldn't believe it. She was a trusted figure at the center; I think everyone was in disbelief - and some still are. Marlyn was a respected member of the community."

"How dare she do that - to take advantage and steal?" Roberts said. "It's egregious, despicable. I want her to make restitution for every single nickel."

The grand jury has been meeting for several weeks with representatives of the district attorney's office.

"They didn't deliberate more than six minutes and they came back to indict her," said Roberts, who served as a witness. "They were totally disgusted with what they were hearing. I could tell by the look on their faces."

She worries, too about the seniors involved at the center.

"A lot of people have a lot of respect for Marlyn," she said. "A lot of people might not want to believe it. The board couldn't believe this could actually happen on their watch. She really is gutsy."

Going forward

Schafer has a long history of service to her community, including a stint as a Gold Beach city councilor and mayor, two terms as county commissioner, from 2001 to 2008, and as the treasurer of the senior center and the secretary/treasurer of the Curry Health District board.

Gary Anderson, chairman of Curry Health District board, declined comment except to say there are no plans to remove her.

"She's innocent until she's proven guilty," Anderson said. "I'm hoping there's something wrong. I just don't like to believe certain things about people, and I've known Marlyn a long time. I don't believe there's anything."

He added that he is confident of the hospital board's policies and procedures to ensure theft cannot occur.

Schafer, who spent time in a hospital for an undisclosed medical condition, has a criminal history record showing a DUII conviction from 2010, which she addressed properly and promptly. And many in the community have said she suffers from a drinking problem, at one point driving a county vehicle after drinking and passing out in the courthouse annex hallway.

Police and the district attorney's office continue their investigation, and the senior center has already "changed the way it does business," Roberts said. "We're squeaky clean. Even the treasurer cannot sign a check."

"This will be a difficult time for the senior center," Bartholomew said. "I hope people will stand by us and support us. We need their help."

"There are no winners or losers here," Andrews said. "Something like this can cripple an organization - not just financially, but eroding friendships. I hope we give everyone time to heal."