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Former Valentine ISD employee charged with stealing money from the rural school district for “hundreds of personal purchases”

A view of Valentine, Texas. (Nicolas Henderson via Flickr/Creative Commons.)

The former business manager for the Valentine Independent School District was arrested last week on federal charges for allegedly stealing thousands of dollars from the small district over a two-year period.

Ernesto Villarreal was arrested on June 24 and charged with theft and multiple counts of wire fraud. Prosecutors said his alleged “scheme” to steal money from Valentine ISD spanned from August 2020 to November 2022.

An indictment unsealed last week accuses Villarreal of using district credit cards for “hundreds of personal purchases,” ranging from travel expenses and home improvements to using district funds to make university tuition payments.

Prosecutors also claim that Villarreal issued himself fraudulent payments from the district’s payroll system and other bank accounts. They also said in court documents that he “attempted to disguise such payments as being for legitimate educational service from a vendor.”

Villarreal was released on bond last week, after a federal judge denied prosecutors’ motion to detain him without bond. He has pleaded not guilty to the charges.

“I think he’s eager to address the allegations of this case and he was pleased that the judge recognized his cooperation by giving him a bond,” said Shane O’Neal, Villarreal’s attorney.

While the arrest itself was news to local school officials, the circumstances leading up to it were not.

In early 2023, law enforcement launched a criminal investigation into Valentine ISD’s finances after an annual audit revealed around $165,000 in unauthorized transactions, as the Big Bend Sentinel reported at the time.

The audit of the district’s 2021-2022 school year also uncovered “improper coding of transactions, altered documents, payments to fictitious employees and unauthorized withdrawals of the district’s funds."

In a statement released after the arrest, Valentine ISD Superintendent Debbie Engle said the audit pointed straight to Villarreal.

“The district’s investigation into these discrepancies revealed evidence that the district’s Business Manager, Ernesto Villarreal, may have misused district resources for personal gain,” she wrote. “Upon discovery of the potential financial improprieties, the district immediately placed Mr. Villarreal on paid leave, and turned this matter over to law enforcement.”

Villarreal ultimately resigned from his position with Valentine ISD in November 2022, according to the district.

In an interview, Engle said that Villarreal’s alleged misuse was spotted in the first place because it was “so outlandish.”

“We’re very frugal with our money,” she said. “If it had been little bits and pieces, then it wouldn’t have been picked up by the audit.”

While the alleged theft was substantial for the small district, Engle said the school district still has a “healthy fund balance.”

“It was a hit, don’t get me wrong,” she said. “There’s a lot of things we could’ve done with that money.”

Travis Bubenik is All Things Considered Host and Big Bend Reporter at Marfa Public Radio.