Former Canton city official charged with embezzlement

Chad Smith

Lolitta Marie Melander of Lanesboro faces nine counts of theft, theft-by-swindle, and embezzlement in Fillmore County District Court.

The 52-year-old former clerk for the city of Canton has been accused of swindling almost $135,000 from the city over eight years. The charges were officially handed down by Fillmore County Attorney Brett Corson on Oct. 18.

“The total amount she allegedly took from the city of Canton was $134,639,” Corson said. “She was served with the complaint and will appear at the next hearing on Nov. 18. That will be her first appearance in court, and we’ll set her conditions of release. That’s when any potential bail will be decided, any conditions as far as handling public money, keeping her address current, and any other release conditions that need to be set.”

Corson said the defense attorneys can then decide whether or not they want to challenge any or all aspects of the charges after the Nov. 18 hearing.

“They could challenge the search, they could say ‘none of this makes sense,’ there isn’t probable cause, or anything of that nature,” Corson said.

The Fillmore County Sheriff’s Office and Corson’s office first became aware of an investigation into “irregularities” in Canton’s finances after the city had an audit performed on its books. The auditor, Monica Houser (Hawkins Ash Accounting, La Crosse), spotted several things wrong with the bookkeeping and alerted local authorities. The results of the investigation were then forwarded to the Office of the State Auditor.

“The state auditor’s office reviewed those numbers and took a look at the books,” Corson said. “The review indicated the state auditors believed that more than $134,000 had been taken from the city.”

The state auditor’s office has both accountants and forensic accountants that help with investigations like this. Corson said people like this are valuable to law enforcement officials by confirming if any concern is merited.

“Their report talked about several red flags,” Corson said, “including some city checks being issued to Miss Melander for non-business purposes, such as personal medical bills, funeral expenses, car repairs, as well as travel to Montana and South Dakota. That’s just some of the things the auditor alleged in the report they gave us.”

The state auditor’s report says there appeared to have been multiple payroll advances to Melander between Jan. 1, 2012, to March 31, 2019. Melander was consistently issued checks for future work hours, expenses, and benefits. In some cases, those checks were issued 30 days in advance. Canton city files showed that Melander was issued over $28,000 in payments that weren’t supported by any documentation or receipts at all.

Corson said the maximum penalty for these allegations is 20 years in prison and/or $100,000 fine. He notes that sentencing guidelines say the court needs to look at several things before passing sentence.

“You check to see if they have any criminal history, the severity of any offense, and then determine if they have any local jail time with prison hanging over their head,” he said. “Or, the court could also determine they would go straight to prison. The court will also set restitution terms in a case like this.”