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HomeMy WebLinkAbout1430 RhoneIn Re: Dean Rhone, Respondent File Docket: X -ref: Date Decided: Date Mailed: Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Paul M. Henry Raquel K. Bergen Nicholas A. Colafella 05 -045 Order No. 1430 3/27/07 4/11/07 This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation regarding a possible violation of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., by the above -named Respondent. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific allegations. Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an "Investigative Complaint." An Answer was not filed. A Stipulation of Findings and a Consent Agreement waiving an evidentiary hearing were subsequently submitted by the parties to the Commission for consideration. The Stipulation of Findings is quoted as the Findings in this Order. The Consent Agreement has been approved. This adjudication of the State Ethics Commission is issued under the Ethics Act and will be made available as a public document thirty days after the mailing date noted above. However, reconsideration may be requested. Any reconsideration request must be received at this Commission within thirty days of the mailing date and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code § 21.29(b). A request for reconsideration will not affect the finality of this adjudication but will defer its public release pending action on the request by the Commission. The files in this case will remain confidential in accordance with the Ethics Act. Any person who violates such confidentiality commits a misdemeanor and, upon conviction, may be subject to a fine of not more than $1,000 or imprisonment for not more than one year. Confidentiality does not preclude discussing this case with an attorney at law. Rhone, 05 -045 Page 2 I. ALLEGATION: That Dean Rhone, a public official /public employee, in his capacity as Secretary /Treasurer and Tax Collector for Starrucca Borough, Wayne County, [violated] Sections 1103(a); 1104(a) and 1105(b)(5) provisions of the State Ethics Act (Act 93 of 1998), 65 Pa.C.S. § §1103(a), 1104(a) and 1105(b)(5) when he used the authority of his public position for a private pecuniary gain to make payments from borough funds to himself; including but not limited to, making payments from borough accounts to himself in excess of the salary set by the borough council, and when as tax collector he converted payments made to the Starrucca Borough Tax Collector for his personal use; when he failed to file Statements of Financial Interests for 2002, 2003, 2004, and 2005 calendar years; and when he failed to disclose on his Statements of Financial Interests filed for calendar year 2001 all sources of income in excess of $1,300 annually. II. FINDINGS: 1. Dean Rhone served as the Starrucca Borough Tax Collector, Wayne County from January 2, 2001, to June 2, 2003. a. Rhone resigned the position of tax collector effective June 2, 2003. b. Rhone served as Starrucca Borough's Secretary /Treasurer from July 8, 2003, until March 1, 2004. 2. April Rhone, wife of Dean Rhone, served as Starrucca Borough Tax Collector from June 2, 2003, until December 31, 2003. a. Dean Rhone continued to perform tax collector duties while his wife officially held the position. 3. In his capacity as Starrucca Borough Tax Collector, Rhone was responsible for collecting real estate, personal property, Debt and Per Capita taxes for Starrucca Borough, Wayne County and the Susquehanna Community School District. 4. The Borough Code provides that the duly elected tax collector is responsible for the collection of all state, county, borough, school, institution district and other taxes levied within the township by the authorities empowered to levy taxes. 5. Tax collection periods for Starrucca Borough during Rhone's years of service as tax collector are as follows: Discount Face Penalty a. Starrucca Borough April 1 to June 1 to After July 31 to May 31 July 31 December 31 b. Wayne County April 1 to June 1 to After July 31 to May 31 July 31 December 31 c. Susquehanna County July 1 to September 1 to After November 1 to August 31 October 31 January 31 of the following year 6. The collection period for school district per capita taxes are the same as the school district collection periods. a. Per capita tax bills are mailed along with the school district tax bills. Rhone, 05 -045 Page 3 7. As tax collector, Dean Rhone was responsible for issuing tax notices to residents of Starrucca Borough for borough, Wayne County and Susquehanna Community School District taxes and was also responsible for the receipt of tax payments. 8. The local tax collection law requires the tax notice issued by the tax collector contain the following information: a. Date of the tax notice. b. Rate or rates of taxation. c. Valuation and identification of the real property of the taxpayer. d. Occupation valuation of the taxpayer, if any. e. The several amounts of real and personal property and personal taxes the taxpayer is billed for the current year. f. The total amount of taxes the taxpayer owes for the current year. g. A statement the taxes are due and payable. h. A request for payment of the taxes. Statement of the time and place where taxes can be paid. j. Dates for discount, face and penalty periods. 9. Tax collectors are required to keep accurate records and accounts of all funds collected as taxes. a. The tax collector must record each tax payment on the duplicate by marking such as paid with the amount and the date opposite the taxpayer's name. A tax collector is required to make periodic reports to the taxing district such being due by the tenth day of each month for the previous month's activities. b. The report is to list all taxes collected for the taxing district for the reported period. Said report is also to list the names of the taxpayers and amounts collected from each, including any discounts and penalties and the report must carry a total of all taxes collected for the reporting period. Each tax collector must file an annual report with the Department of Community and Economic Development, and of the Clerk of Court of Common Pleas. c. The report is to be accompanied by a payment for all taxes collected during the previous month. d. The report must be filed within sixty (60) days after the close of each calendar year and must include the following information: 1. number of taxables 2. total amount of taxes of each type appearing on duplicates 3. amount of taxes of each type collected, separately for current and delinquent taxes 4. amount of money handled as treasurer of a jurisdiction, if applicable Rhone, 05 -045 Page 4 5. salary received as tax collector and as treasurer, if applicable 6. percentage of commission received 7. compensation received in dollars 8. total gross amount of compensation received 9. itemized list of expenses payable out of gross compensation as tax collector and treasurer 10. itemized list of expenses payable directly by taxing districts 10. Rhone collected tax payments in the form of cash, checks and money orders from Starrucca Borough residents. a. Rhone did not maintain an accounting of whether or not tax payments were made by cash, check or money order. b. Rhone maintained two (2) bank accounts for taxes collected. 1. One account was for county and borough taxes and the other account was for school district and per capita taxes. 11. Rhone did not comply with requirements to submit monthly collection reports to Wayne County in a timely manner during 2002 or 2003. a. Rhone would submit remittance reports to the Susquehanna Community School District when deposits were made. b. Rhone submitted timely monthly collection reports on only three occasions during 2002 and 2003. 12. Financial records of Wayne County include collection reports submitted by Rhone detailing late payments made during 2002 and 2003. a. Tax Year 2002 *filed timely b. Tax Year 2003 *filed timely Month Date Filed January No report filed February No report filed March No report filed April No report filed May 12/1/02 June 12/1/02 Month Date Filed January No report filed February No report filed March 5/15/03 April 5/10/03* May 8/6/03 June 8/6/03 Month July August September October November December Month July August September October November December Date Filed 12/1/02 12/1/02 12/1/02 12/1/02 12/1/02* 4/25/03 Date Filed 8/6/03 11/5/03 11/5/03 11/5/03* 1/15/04 1/15/04 Rhone, 05 -045 Page 5 13. In addition to the late submission of monthly reports, Rhone's reports did not include supporting documentation such as a roster of payments collected and the tax account's bank statements. a. Due to Rhone's failure to timely turn over monthly collection reports and remittance payments on a regular basis, the county and borough were unable to determine which residents paid their taxes, when taxes were paid, and how much was paid during 2002 or 2003. b. Rhone failed to keep accurate records of any cash tax payments he collected. 1. Rhone failed to maintain a register or log to document the date, the amount of cash received and the taxpayer paying with cash. 14. Tax collection records for Starrucca Borough, including monthly collection reports and remittance payments are missing from borough records. a. Rhone was responsible for maintenance for those records. 15. In November 2002, Rhone was contacted by the Wayne County Tax Administration Clerk requesting monthly remittance reports and corresponding payments which were overdue. a. Rhone had failed to turn in monthly reports and corresponding checks for the months of August, September, October, and November. 16. Rhone provided a handwritten response to the tax administration clerk that his failure to turn over requested records on time was due to a number of reasons including computer issues, and forgetting to mail reports. 17. In 2002 and 2003, Rhone made late payments to Wayne County and Starrucca Borough to balance and close tax accounts for each year. a. Tax Year Taxing Body Date Paid Amount 2002 Borough 2/5/03 $ 398.71 County 1/21/03 $ 449.39 County 1/21/03 $ 401.20 2003 Borough 3/16/04 $ 332.88 County 1/23/04 $1,865.05 18. In 2002 and 2003, Rhone converted tax payments in the forms of both cash and check to his personal benefit. 19. Rhone would attempt to reimburse the tax accounts to cover the misappropriation enabling him to annually balance with taxing bodies. 1. Rhone would be late filing monthly or annual reports until he could reimburse the tax accounts. 20. During 2002, Rhone endorsed and deposited two resident tax checks into his personal account at People's National Bank. a. The tax checks were issued to Rhone in his position as Tax Collector of Starrucca Borough. 21. The following residents' payments were deposited by Rhone into his personal Rhone, 05 -045 Page 6 account (xxxx242) at People's National Bank. Rhone, 05 -045 Page 7 22. Rhone's personal account at People's National Bank confirms numerous cash deposits throughout 2002 during the same time period when he was not reporting cash tax payments received. 23. During the same time period he served as Tax Collector for Starrucca Borough, Rhone was privately employed as a bookkeeper with Consumer Credit Counseling Service (CCCS). a. Rhone was employed by CCCS from January 17, 1997, to October 21, 2002. b. Rhone's employment with CCCS overlapped with his tax collector position. 24. Consumer Credit Counseling Service (CCCS) is a non - profit organization which offers a debt management program where individuals with unmanageable unsecured debt can setup an orderly repayment plan to liquidate their debt. a. CCCS negotiates low monthly payment plans and /or interest concessions with creditors. b. Customers make monthly payments to CCCS, who [sic] then distributes the funds to that [sic] customers' creditors. c. Customers of CCCS make monthly payments to creditors through either a mailed money order or a direct ACH payment into the company's account. 1. Money orders are mailed to a P.O. Box, which is set up by each office. 2. Customers make their money order payments out to "CCCS." d. CCCS' computer system establishes an escrow account for each client, as well as maintains account information. 1. Money orders received are credited in the system to the customer's account, and then posted. 25. Rhone's job duties while employed by CCCS included: a. General bookkeeping duties including accounts payable and receivable. b. Entering received payments into the company's internal system. c. Handling money orders paid to the company by customers. Rhone's Personal Account Tax Year Taxpayer Date Tax Payment Deposit Date Amount 2002 Jeffrey Stone 07/27/02 $ 184.71 08/07/02 $ 184.71 2002 Lawrence Patrick 07/25/02 $ 107.16 08/12/02 $ 107.16 Total $ 291.87 Rhone, 05 -045 Page 7 22. Rhone's personal account at People's National Bank confirms numerous cash deposits throughout 2002 during the same time period when he was not reporting cash tax payments received. 23. During the same time period he served as Tax Collector for Starrucca Borough, Rhone was privately employed as a bookkeeper with Consumer Credit Counseling Service (CCCS). a. Rhone was employed by CCCS from January 17, 1997, to October 21, 2002. b. Rhone's employment with CCCS overlapped with his tax collector position. 24. Consumer Credit Counseling Service (CCCS) is a non - profit organization which offers a debt management program where individuals with unmanageable unsecured debt can setup an orderly repayment plan to liquidate their debt. a. CCCS negotiates low monthly payment plans and /or interest concessions with creditors. b. Customers make monthly payments to CCCS, who [sic] then distributes the funds to that [sic] customers' creditors. c. Customers of CCCS make monthly payments to creditors through either a mailed money order or a direct ACH payment into the company's account. 1. Money orders are mailed to a P.O. Box, which is set up by each office. 2. Customers make their money order payments out to "CCCS." d. CCCS' computer system establishes an escrow account for each client, as well as maintains account information. 1. Money orders received are credited in the system to the customer's account, and then posted. 25. Rhone's job duties while employed by CCCS included: a. General bookkeeping duties including accounts payable and receivable. b. Entering received payments into the company's internal system. c. Handling money orders paid to the company by customers. Rhone, 05 -045 Page 8 d. Generating payroll. e. Oversight for the receipt and posting of payments as well as the disbursement of funds. 1. Rhone received money orders prior to posting the payments to the system. 26. While employed at CCCS, Rhone converted money orders issued to CCCS by CCCS clients into his personal bank account at People's Bank. a. Rhone admitted to using some of the money orders to reimburse the tax accounts for monies he converted to personal use. b. The monies misappropriated from CCCS by Rhone were used by him to offset shortages in the borough tax accounts created by Rhone's use of tax funds for his personal use. c. Rhone would write his initials or his name over the payee portion of the money order to conceal the payment being made to CCCS. 27. From August 2001 through December 2002, Rhone deposited thirty -one (31) money orders totaling $9,510 issued by customers to CCCS, into his personal bank account. 28. Rhone admitted to State Ethics Commission Investigators that he took tax payments in the form of cash and check. a. Rhone also admitted that he took money orders made payable to CCCS, his employer. b. Rhone confirmed using some of the money orders to reimburse the tax accounts for monies he converted to personal use. 1. The balance of the money orders was also used by Rhone for personal purposes. 29. Money orders sent by customers to CCCS, and misappropriated by Rhone, were credited by Rhone to the customer in the computer, but not posted to the account. a. Missing funds were not identified by CCCS. b. Rhone did not reimburse the company for the misappropriated money orders. 30. In August 2002, Rhone deposited personal funds and a CCCS money order into the county /borough tax account to cover misappropriated tax payments. Date Description Amount 8/13/02 CCCS Money Order $272.00 8/14/02 Check from Dean Rhone's Personal Account $ 19.87 $291.87 31. Rhone deposited checks from his personal bank account into the tax collector account during 2002 to reimburse the account for funds he converted to personal use. Rhone, 05 -045 Page 9 a. Date Check Number Payee Amount 06/05/02 4464 Dean Rhone - T.C. $ 154.76 01/17/03 5140 Dean Rhone - T.C. $ 411.00 b. Rhone's personal check in the amount of $411.00 became the basis of payments made to the county to closeout 2002's tax collections. 32. In order to complete the tax record for 2002, Rhone made late payments to Wayne County and Starrucca Borough in January and February 2003. a. These payments were made so that he could balance and close the tax account for 2002 using CCCS monies and personal funds. b. Late payments made by Rhone included the following: Taxing Body Date Paid Amount County 1/21/03 $449.39 County 1/21/03 $401.20 Borough 2/5/03 $398.71 c. Late payments were made as reimbursement for the payments Rhone converted to his own personal use. 33. By February 15, 2003, Wayne County and Starrucca Borough reported to have collected the required tax monies from Rhone for the 2002 tax year. a. Wayne County had questions with respect to the accuracy and timeliness of Rhone's submissions. 34. On February 17, 2003, Rhone was advised in writing by the Wayne County Tax Claim Bureau Director, Cheryl Sykes, that the 2002 tax return Rhone submitted was illegible, inaccurate, and late. a. Sykes' letter indicates that the several attempts that had been made to contact Rhone regarding the tax return had been unanswered. b. Sykes references prior correspondence from the county to Rhone regarding reoccurring problems with Rhone's reports and remittance payments. c. The 2002 Starrucca Borough Tax Return was due to the Tax Claim Bureau no later than January 15, 2003. d. Sykes' letter concluded by informing Rhone that a meeting at the commissioner's office had been scheduled for February 27, 2003, at 11:00 a.m. to discuss the reoccurring issues. 35. As the Tax Collector for Starrucca Borough, Rhone also was responsible for collecting real estate and per capita taxes for the Susquehanna Community School District. a. Rhone maintained a school tax account at Wayne Bank for the deposit and remittance of real estate and per capita taxes. b. Rhone was responsible for turning in monthly collection reports and remittance payments to the school district. Taxpayer Check Check Deposit Amount Date Amount Date Francis Swartz 07/10/02 $ 865.71 07/23/02 $ 865.71 * John Pasternak 08/16/02 $ 589.65 08/20/02 $ 589.65 Jeffrey Stone 09/16/02 $ 687.53 10/01/02 $ 687.53 Total $2,142.89 Rhone, 05 -045 Page 10 36. During the 2002 school and per capita tax cycle, Rhone, as tax collector, diverted real estate and per capita tax payments in both cash and checks into his personal account. 37. The following residents' tax checks were endorsed and deposited by Rhone into his personal account ()xxx242) at People's National Bank. Rhone's Account *Swartz's check included his tax payment ($836.31) at face amount and three family members' per capita tax payments (3 X $9.80). 38. In 2002, checks diverted by Rhone from the school tax collector accounts totaled $2,142.89. a. Cash tax payments were also diverted by Rhone. 39. Rhone deposited money orders issued to Consumer Credit Counseling Services during 2002 into the school district's tax account to reimburse the account for cash and check payments he converted to personal use. a. Rhone altered the money orders issued to CCCS to reflect that he was the payee. 40. From August 2002 through November 2002, Rhone deposited nine (9) money orders totaling $2,195 initially issued to Consumer Credit Counseling Services into the school district's tax account to replace tax payments misappropriated by Rhone. a. Money orders were deposited by Rhone into the tax accounts prior to the end of 2002 to balance and close the accounts for the year. 41. Rhone deposited CCCS money orders totaling $2,195.00 to the school tax account while diverting tax payments totaling $2,142.89. a. The $52.11 difference covered previously un- reimbursed cash payments Rhone took. 42. On December 30, 2002, Rhone deposited check number 103 in the amount of $226.02 from the school tax account into his personal account. a. Rhone made the check payable to Dean Rhone and signed the check in his position as tax collector. b. Rhone used this check for his personal purposes. 43. Throughout the latter part of 2002 and early into 2003, Rhone issued checks from his personal bank account to the school tax account as repayment for funds he previously converted from that account for his personal use. Payments were made as follows: a. Date Check No. Description Amount Rhone, 05 -045 Page 11 9/11/02 4358 Dean Rhone to Dean Rhone, T.C. $ 98.37 8/14/02 4666 Dean Rhone to Dean Rhone, T.C. $ 35.51 8/14/02 4748 Dean Rhone to Dean Rhone, T.C. $250.00 11/7/02 4827 Dean Rhone to Dean Rhone, T.C. $ 15.39 1/17/03 5141 Dean Rhone to Dean Rhone, T.C. $ 55.00 $454.27 b. Payments were made by Rhone to balance and close out the school tax account for 2002. 44. In February of 2003, the Susquehanna Community School District hired the independent accounting firm of Parente Randolph, LLC to conduct an audit of the Starrucca Borough, and Lanesboro Borough Tax Collectors. a. The basis for this audit was for standard recordkeeping purposes. b. Parente Randolph, LLC produced an independent accounting report on the calendar year 2002 school tax collection. 45. As part of the audit, a letter was sent on March 31, 2003, from William P. McGowan, CPA & Parente Randolph to SCSD Business Manager Ray Testa outlining the findings and making recommendations. a. McGowan's letter indicated that Rhone "does not maintain complete, accurate, and legible records." b. McGowan recommends that Rhone begin to use a check register to record cash payments received. 46. Throughout 2003, correspondence was sent to the Rhones by the Wayne County Tax Administration Clerk requesting monthly collection reports and remittance payments which were late in being submitted. a. Rhone provided various reasons for his failure to submit records in a timely manner, in letters sent to Wayne County including computer problems, accounting errors and negligence. 47. In 2003, Rhone failed to keep accurate records of any cash tax payments he collected during the 2003 collection cycles. 48. Rhone deposited personal checks into the county /borough tax collection account during 2003 to reimburse the account for funds he converted to his own personal use as follows: a. Date Check No. Description Amount 6/20/03 5640 Dean Rhone to Dean Rhone $449.17 8/8/03 5941 Dean Rhone to Dean Rhone $ 36.54 11/7/03 6112 Dean Rhone to Dean Rhone $ 36.34 $522.05 b. Rhone's payments were used as part of monthly remittance payments. c. Rhone's payments were used to balance and close out the tax account for 2003. 49. Rhone confirmed to investigators of the State Ethics Commission that in 2003 he converted county /borough tax payments for his personal use. Taxpayer Check Check Date Deposit Date Amount Amount Jeffrey Stone 186.79 03/24/03 04/24/03 $ 186.79 Charlaine Dacres $ 139.74 03/28/03 05/06/03 $ 139.74 Charles D. Murphy $ 96.49 03/31/03 05/07/03 $ 96.49 Martha R. Schuler $ 183.82 06/20/03 07/16/03 $ 183.82 Susan Shay $ 91.67 07/31/03 08/12/03 $ 91.67 Shirley Williams $ 681.38 12/30/03 01/26/04 $ 681.38 Total $1,379.89 Rhone, 05 -045 Page 12 a. Rhone admitted he then made payments from his personal account as reimbursement. 50. On June 2, 2003, Rhone resigned from his position as tax collector during a borough council meeting. a. April Rhone, wife of Dean Rhone was appointed by council to finish the term of Dean Rhone. b. Rhone resigned due to a conflict between his elected position and his employment with the Pennsylvania Farm Bureau. 51. Dean Rhone continued to have access to the tax accounts, tax payments, and the duplicate after resigning as tax collector. a. Dean Rhone continued to perform the duties of tax collector even though his wife officially held the position. b. Dean Rhone remained as signator on the two tax accounts. c. April Rhone never had signature authority over any tax accounts. d. April Rhone was tax collector in name only. 52. During 2003, Rhone continued to deposit checks he received for payment of county /borough taxes into his personal account. a. Rhone had access to these accounts in his capacity as borough secretary and that [sic] he remained as signatory over the tax accounts. 1. Rhone was appointed borough secretary on July 8, 2003. b. Rhone continued to unofficially serve as tax collector through December 2003 even though his wife, April Rhone, had been appointed to replace him as tax collector. 53. The following residents' county /borough tax checks were endorsed and deposited by Rhone into his personal account at People's National Bank: a. Rhone's Personal Account b. These payments were converted by Rhone to his own personal use. c. Payments were made during the discount, face and penalty periods. Taxpayer Check Amount Check Date Deposit Amount Date *Charles D. Murphy $ 315.00 07/11/03 07/23/02 $ 315.56 *Kirk Rhone $ 563.27 09/03/03 09/08/03 $ 563.27 * *Renata Guzman $ 699.52 10/12/03 11/03/03 $ 699.52 *Dale Rochwell $ 374.34 12/06/03 12/12/03 $ 374.34 *Properties reported by Rhone to be collected on December 31, 2003 at penalty * *Property turned over as delinquent by Rhone Rhone, 05 -045 Page 13 54. During 2003, Rhone also deposited checks he received as payment for school taxes into his personal account. a. This was a continuation of the pattern Rhone followed in 2002. 55. In 2003, the following checks made for payment of school taxes totaling $1,952.69 were endorsed and deposited by Rhone into his personal account (xxxx242) at People's National Bank. Rhone's Account 56. On November 16, 2003, Dean Rhone issued personal check number 6109 in the amount of $40.00 to April Rhone, Tax Collector. a. This check was deposited into the school tax account. b. This payment partially reimbursed the school tax account for funds previously converted to personal use by Rhone. 57. On or about January 14, 2004, Ginger Golden, Wayne County Deputy Tax Collector, issued county check #6606 to Starrucca Borough in the amount of $1,857.10. a. This payment was the borough's share of a real estate transfer. b. The check was received by Rhone in his capacity as borough secretary /treasurer. 58. Rhone converted Wayne County check no. 6606 for his personal use. a. Rhone deposited the check into the borough school tax account on January 14, 2004. b. Rhone took the county check and deposited it into the tax account to cover shortages as the result of him converting school tax payments to his personal use. 59. As a result of her appointment as borough tax collector, April Rhone was responsible for identifying delinquent taxpayers to the Wayne County Tax Claim Bureau. a. In January 15, 2004, April Rhone identified 23 residents for their failure to pay the required taxes to the taxing bodies including Renata and Raymond Guzman. b. Raymond and Renate [sic] Guzman were identified to the Tax Claim Bureau Rhone, 05 -045 Page 14 as failing to pay $699.52, at face value in school district real estate taxes. 1. The Guzman's had made payment of taxes in the amount of $699.52 on or about November 3, 2003. 2. Dean Rhone converted the Guzman check for his personal purposes and deposited their check into his personal account of [sic] November 3, 2003. 60. On or around July 2005, the Guzman's were notified that their property would be put up for sheriff's sale due to their failure to pay real estate taxes to the school district for 2003. a. The Guzman's contacted the school district and provided the business manager a copy of their cancelled check for their 2003 tax payment. 61. On September 1, 2005, Susquehanna Community School District Business Manager Gary Kiernan contacted Dean Rhone to notify him that he was responsible for providing repayment to the Tax Claim Bureau for Guzman's tax payment. a. Kiernan gave Rhone 10 days to make payment to the county without charging penalties and interest. b. Rhone falsely reported to Kiernan that his computer crashed causing a mix - up in tax payments. c. Rhone did not inform Kiernan that he deposited Guzman's tax payment into his personal account. 62. On September 16, 2005, Rhone issued a personal check number 9248 in the amount of $699.52 to the Wayne County Tax Claim Bureau. a. This check was issued by Rhone to cover Guzman's tax payment which Rhone converted to his own personal use on or about November 3, 2003. 63. Rhone admitted to State Ethics Commission Investigators that he took Guzman's school tax payment and converted it to his own personal use. THE FOLLOWING FINDINGS RELATE TO THE ALLEGATION THAT RHONE ISSUED PAYEMNTS TO HIMSELF WITHOUT BOROUGH APPROVAL 64. After resigning as Tax Collector in June 2003, Dean Rhone was hired as the Starrucca Borough Secretary /Treasurer. a. Dean Rhone unofficially continued to serve as the borough's tax collector through December 2003. 65. In his official capacity as Starrucca Borough Secretary /Treasurer, Rhone was responsible for performing the following duties. a. Producing the official minutes of borough council meetings. b. Receiving and maintaining all borough records. c. Producing monthly treasurer's report and bill lists. d. Producing borough checks for council's signature. Rhone, 05 -045 Page 15 e. Handling all accounts payable and receivable functions for the borough. f. Signature authority on borough's general fund account. 66. All of Starrucca's Borough's expenditures except those pertaining to borough roads were paid from the borough's general fund account. a. Rhone as Secretary /Treasurer was responsible for maintaining the checks and check register for the general fund account. b. Starrucca Borough general fund checks required the signatures of at least two individuals who had signature authority. c. Rhone, Borough Mayor Wendell Swartz, and Council President Pete Downton had signature authority over the general fund account from June 2003 to March 2004. 67. Rhone was compensated a gross amount of $225 per month for his duties as secretary /treasurer, as set by borough council. a. Rhone received monthly net payment in the amount of $201.44. b. Rhone was responsible for producing his own payroll checks from the borough's general fund. 68. From July 8, 2003, until February 5, 2004, Rhone issued himself ten (10)payroll checks for his service as Secretary /Treasurer. a. Rhone should have received a total of eight (8) checks, one check each month for the eight month period. b. Rhone issued himself two (2) payroll checks during the months of July and August 2003, and January 2004. 1. Borough council did not authorize the additional payments Rhone made to himself. c. The names Wendell Swartz, Pete Downton and /or Dean Rhone, appear on the above checks as authorizing the payment on behalf of the borough. d. Rhone forged the names of Swartz and Downton on the checks to enable him to receive the unapproved payments. 69. The following checks were issued from the borough general fund to Rhone as payment for his position as secretary /treasurer. a. Check Date Check # 7/8/03 7/25/03 8/4/03 8/25/03 9/21/03 283 288 289 293 302 Amount Paid To $ 201.44 Dean Rhone $ 201.44 Dean Rhone $ 201.44 Dean Rhone $ 201.44 Dean Rhone $ 201.44 Dean Rhone Deposit Date Amount 7/15/2003 7/28/2003 8/12/2003 8/25/2003 9/22/2003 $ 201.44 $ 201.44 $ 201.44 $ 201.44 $ 201.44 Rhone, 05 -045 Page 16 11/5/03 12/1/03 1/5/04 1/27/04 2/5/04 309 $ 201.44 Dean Rhone 11/12/2003 330 $ 201.44 Dean Rhone 12/2/2003 336 $ 201.44 Dean Rhone 1/6/2004 342 $ 201.44 Dean Rhone 1/28/04 to Cash 343 $ 201.44 Dean Rhone 3/16/2004 $ 201.44 $ 201.44 $ 201.44 $ 201.44 $ 201.44 70. Starrucca Borough Council President Pete Downton's name appears as one of the two authorizing signatures on checks dated July 8, 2003 (283), July 25, 2003 (288), and January 27, 2004 (342) issued to Dean Rhone. a. Downton denies signing check nos. 283, 288 and 342. 71. Starrucca Borough Mayor Wendell Swartz's name appears as one of the two authorizing signatures on checks dated August 25, 2003 (293) and September 21, 2003, issued to Dean Rhone. a. Swartz is deceased as of November 15, 2003. 72. Rhone admitted to State Ethics Commission Investigators that he forged the signatures of other borough officials on payroll checks be issued to himself including the two (2) payroll checks he wasn't entitled to receive. 73. Rhone's use of his public position resulted in two additional payments totaling $450.00 being issued to him. 74. As Secretary /Treasurer, Rhone was responsible for maintaining a check register of all checks issued from the Borough's accounts. a. Rhone was required to provide the date, the amount, and the recipient on the check register. 75. Checks issued to Rhone on July 25, 2003 (288) and September 21, 2003 (302) were entered into the check register by Rhone as being voided as a means of concealing the extra payments Rhone issued to himself. 76. At the February 2, 2004, borough council meeting, Rhone submitted his resignation, in writing, to be effective March 1, 2004. 77. In approximately February 2004, borough auditors Kirk Rhone and Darl Haynes approached council president Pete Downtown, at his residence, to discuss borough money that had been misappropriated by Dean Rhone. a. Kirk Rhone and Darl Haynes informed Downtowns that Dean Rhone had mishandled borough money while tax collector and secretary /treasurer. b. Kirk Rhone and Darl Haynes informed Downtown that Dean Rhone would repay the money he misappropriated back to the borough. 78. On March 12, 2004, Dean Rhone deposited $2,242.28 into the borough's general fund account. a. The deposit was made up of the following checks. Date Account Amount Rhone, 05 -045 Page 17 3/1/04 Tax Collector Account $ 332.88 3/8/04 Dean Rhone's Personal Account $1,860.00 1/9/04 Wayne County Tax Claim Bureau $ 49.40 b. Rhone no longer held a public position with the borough at that time. c. Rhone no longer had signature authority over the borough's general fund account. 79. On March 13, 2004, Rhone sent a letter to borough council explaining that the March 12, 2004, deposit was due to various payments that he accidentally deposited into the wrong account. a. Rhone explained that the check from the tax collector account for $332.88 was due to a real estate transfer check issued to the borough that he deposited into the tax account. b. Rhone explained that the check from his personal account for $1,860.00 (check #6276) was due to several late tax checks that he received and deposited into his personal account. c. Rhone indicated that there were no issues with the amounts turned over to the taxing authorities. 80. Rhone did not disclose to council that the actual reason for the collection issues was that he intentionally converted tax payments to his own personal use during both 2002 and 2003. 81. Between April and June 2004, Rhone made four additional payments totaling $1,650 to the borough to reimburse the borough for monies he converted to his own personal use as follows: a. Date Check No. Amount 4/7/04 6385 $1,200.00 4/9/04 6396 $ 225.00 6/16/04 6380 $ 112.50 6/16/04 6381 $ 112.50 $1,650.00 b. Rhone explained in additional correspondence that the two payments of $112.50 each were for two payments he was overpaid as secretary /treasurer. c. The check deposited on April 7, 2004, was written and signed by April Rhone. 1. The source of the funds for the $1,200 check was cash given to Rhone by his family. d. These payments were all deposited into the borough's general fund. 82. During 2002 and 2003 while serving as Starrucca Borough Tax Collector, Rhone used the authority of his public position to convert tax payments of at least $5,997.36 for his personal use. a. Rhone converted tax payments of $5,767.34 and deposited these to his personal account. Rhone, 05 -045 Page 18 1. Borough /county $1,671.76 2. School district $4,095.58 b. Rhone issued a tax account check, check number 103 in the amount of $226.02 to himself and deposited the check into his personal account. 83. As borough secretary /treasurer, Rhone converted a borough real estate transfer check in the amount of $1,857.10 for his personal use. a. Rhone used the $1,857.10 to cover shortages in school tax account created by his misappropriation of tax funds for his personal use. 84. Rhone used his position as borough secretary /treasurer to issue unauthorized checks to himself totaling $402.88. 85. In an effort to conceal his use of public money for his personal use, Rhone converted funds of his employer, CCCS, and deposited funds totaling $2,467.00 to borough tax accounts: a. Borough /county $ 272.00 b. School district $2,195.00 86. Total private pecuniary gain realized by Rhone as a result of the use of the authority of office was $8,253.34. THE FOLLOWING FINDINGS RELATE TO THE ALLEGATIONS CONCERNING RHONE'S FAILURE TO FILE STATEMENTS OF FINANCIAL INTERESTS. 87. As tax collector and secretary /treasurer for Starrucca Borough, Rhone was required annually to file a Statement of Financial Interests form by the May 1 deadline, containing information for the prior calendar year. 88. Rhone filed a Statement of Financial Interests for calendar year 2001, as a candidate for Tax Collector of Starrucca Borough. a. The Statement of Financial Interests was filed with the Wayne County Board of Elections. b. Calendar year: 2001 Filed: 02/28/01 on SEC Form 1/01 Occupation: - Creditors: None Direct /indirect income: None All other financial interests: None 89. Rhone failed to file a Statement of Financial Interests form with the borough for calendar year 2002, 2003, 2004 and 2005 by the May 1 deadline. a. Rhone was required to file Statements of Financial Interests for calendar years 2002 and 2003 in his position as Tax Collector for Starrucca Borough. b. Rhone was required to file a Statement of Financial Interests for calendar year 2004 in the position as the Secretary /Treasurer for Starrucca Borough. Rhone, 05 -045 Page 19 c. Rhone was required to file a Statement of Financial Interests for calendar year 2005 for one year after leaving his position as Secretary /Treasurer for Starrucca Borough. 90. On his calendar year 2001 Statement of Financial Interests, Rhone failed to disclose income received from his employment with Consumer Credit Counseling Services. 91. During years when he failed to file a Statement of Financial Interests with the borough, Rhone received compensation from Starrucca Borough, Wayne County and Susquehanna Community School District, totaling $7,498.00. Year Entity Amount Year Entity Amount 2002 Borough $ 304.00 2004 Borough $ 604.00 County $ 814.00 School District $3,544.00 2003 Borough $1,410.00 County $ 525.00 School District $ 297.00 Rhone, 05 -045 Page 20 a. III. DISCUSSION: Respondent Dean Rhone (hereinafter also referred to as "Respondent," "Respondent Rhone," or "Rhone "), as Tax Collector for Starrucca Borough from January 2, 2001, to June 2, 2003, and as Secretary /Treasurer for Starrucca Borough from July 8, 2003, until March 1, 2004, was a public official /public employee subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. The allegations are that Rhone, in his capacity as Secretary /Treasurer and Tax Collector for Starrucca Borough ( "Borough ") in Wayne County ( "County "), violated Sections 1103(a), 1104(a) and 1105(b)(5) of the Ethics Act, 65 Pa.C.S. §§ 1103(a), 1104(a) and 1105(b)(5), when he used the authority of his public position for a private pecuniary gain by making payments from Borough funds to himself, including but not limited to payments from Borough accounts to himself in excess of the salary set by the Borough Council; when as tax collector he converted payments made to the Borough Tax Collector for his personal use; when he failed to file Statements of Financial Interests for the 2002, 2003, 2004, and 2005 calendar years; and when he failed to disclose on his Statements of Financial Interests filed for calendar year 2001 all sources of income in excess of $1,300 annually. Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from engaging in conduct that constitutes a conflict of interest: § 1103. Restricted Activities (a) Conflict of interest. —No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. § 1103(a). The term "conflict of interest" is defined in the Ethics Act as follows: § 1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a Rhone, 05 -045 Page 21 member of his immediate family or a business with which he or a member of his immediate family is associated. 65 Pa. C. S. § 1102. Section 1103(a) of the Ethics Act prohibits a public official /public employee from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. Section 1104(a) of the Ethics Act provides that each public official /public employee must file a Statement of Financial Interests for the preceding calendar year, each year that he holds the position and the year after he leaves it. Section 1105(b)(5) of the Ethics Act requires the filer to disclose on the Statement of Financial Interests the name and address of any direct or indirect source of income totaling in the aggregate $1,300 or more. As noted above, the parties have submitted a Consent Agreement and Stipulation of Findings. The parties' Stipulated Findings are reproduced above as the Findings of this Commission. We shall now summarize the relevant facts as contained therein. Rhone served as the Borough Tax Collector from January 2, 2001, to June 2, 2003. Rhone resigned from the position of Borough Tax Collector effective June 2, 2003. Rhone's wife, April Rhone, served as Borough Tax Collector from June 2, 2003, until December 31, 2003. However, as set forth more fully below, Rhone continued to perform Borough Tax Collector duties while his wife officially held the position. Rhone served as the Borough's Secretary /Treasurer from July 8, 2003, until March 1, 2004. At the February 2, 2004, Borough Council meeting, Rhone submitted his resignation from the position of Borough Secretary /Treasurer, effective March 1, 2004. In his capacity as Borough Tax Collector, Rhone was responsible for issuing tax notices to residents of the Borough for Borough, County and Susquehanna Community School District ( "School District ") taxes. Rhone was also responsible for the receipt of tax payments. Tax collectors are required to keep accurate records and accounts of all funds collected as taxes. The tax collector must record each tax payment on the duplicate by marking such as paid with the amount and the date opposite the taxpayer's name. A tax collector is required to make monthly reports to the taxing district. Each report is to include detailed information for the previous month's activities and is to be accompanied by a payment for all taxes collected during that month, as set forth at Fact Finding 9. Each tax collector must file an annual report with the Department of Community and Economic Development and with the Clerk of Court of Common Pleas. Rhone collected tax payments in the form of cash, checks and money orders from Borough residents. Rhone did not maintain an accounting of whether tax payments were made by cash, check or money order. Rhone failed to keep accurate records of any cash tax payments he collected. As detailed in Fact Findings 11 and 12, Rhone did not comply with requirements to submit monthly collection reports to the County in a timely manner during 2002 or 2003. In addition to the late submission of monthly reports, Rhone's reports did not include supporting documentation such as a roster of payments collected or the tax account bank Rhone, 05 -045 Page 22 statements. As a result, the County and Borough were unable to determine which residents paid their taxes, when taxes were paid, and how much was paid during 2002 or 2003. In November 2002 and throughout 2003, Rhone was contacted by the County Tax Administration Clerk, who requested monthly reports and corresponding payments that were overdue. In response, Rhone provided various reasons for his failure to submit records in a timely manner, including computer problems, forgetting to mail reports, accounting errors and negligence. In 2002 and 2003, as detailed in the Fact Findings, Rhone converted Borough /County and School District tax payments to his personal benefit. The converted tax payments included cash, checks that Rhone deposited into his personal bank account, and funds that Rhone removed from the school tax account by writing a check ( #103) from the account to himself. After converting tax payments to his personal benefit, Rhone would attempt to reimburse the tax accounts to cover the misappropriations, so that he could annually balance with taxing bodies. Some of the monies that Rhone used to reimburse the tax accounts were misappropriated from his private employer, Consumer Credit Counseling Service (CCCS). See, Fact Findings 26 -30, 32, 39 -41. On June 2, 2003, Rhone resigned from his position as Tax Collector due to a conflict between his elected position and his employment with the Pennsylvania Farm Bureau. Borough Council appointed Rhone's wife, April Rhone, to finish Rhone's term. After resigning as Tax Collector, Rhone continued to have signature authority on the two tax accounts as well as access to the tax payments and the duplicate. April Rhone never had signature authority over any tax accounts. Rhone continued to perform the duties of Tax Collector even though his wife officially held the position. April Rhone was Tax Collector in name only. Following his "resignation" from the office of Tax Collector, Rhone continued to convert tax payments to his personal use. See, Fact Findings 53, 55. One of the tax payments Rhone converted to personal use was a check for school taxes paid by Renata Guzman in the amount of $699.52. As a result of Rhone's conversion of the Guzman tax payment, the Guzmans were notified that their property would be put up for sheriff's sale. After the Guzmans provided to the School District Business Manager a copy of their cancelled check for the tax payment, Rhone issued a personal check in the amount of $699.52 to cover the Guzman tax payment that he (Rhone) had converted to his own personal use. Rhone falsely reported to the School District Business Manager that his computer had crashed causing a mix -up in tax payments. See, Fact Findings 55, 59 -63. The parties have stipulated that during 2002 and 2003, while serving as Borough Tax Collector, Rhone used the authority of his public position to convert tax payments of at least $5,997.36 for his personal use. See, Fact Finding 82. Rhone served as Borough Secretary /Treasurer from July 8, 2003, until March 1, 2004. As Borough Secretary /Treasurer, Rhone was responsible for producing monthly treasurer's reports and bill lists, producing Borough checks for Council's signature, and handling all accounts payable and receivable functions for the Borough. As Borough Secretary /Treasurer, Rhone was responsible for maintaining the checks and check register for the Borough's general fund account. Borough general fund checks required the signatures of at least two individuals who had signature authority. During Rhone's service as Borough Secretary /Treasurer, Rhone, Borough Mayor Wendell Swartz, and Council President Pete Downton had signature authority over the Borough's general fund account. Rhone's compensation as Borough Secretary /Treasurer was set by Borough Council at $225 gross per month ($201.44 net per month). Rhone was responsible for producing his own payroll checks from the Borough's general fund. Between July 8, 2003, and February 5, 2004, Rhone used his position as Borough Secretary /Treasurer to issue two extra, unauthorized payroll checks to himself totaling $402.88. Rhone forged the Rhone, 05 -045 Page 23 signatures of Borough Mayor Swartz and Borough Council President Downton on the extra payroll checks so that he could receive the unapproved payments. See, Fact Findings 68- 73. In the check register in which payments from the account were recorded, Rhone entered two of his payroll checks as having been voided, even though the checks had been negotiated, in order to conceal the extra payments. Fact Findings 74 -75. In 2004, acting in his capacity as Borough Secretary/Treasurer, Rhone converted to his personal use a County check ( #6606) that had been issued to the Borough. On or about January 14, 2004, the County Deputy Tax Collector issued County check #6606 to the Borough in the amount of $1,857.10 as the Borough's share of a real estate transfer. The check was received by Rhone in his capacity as Borough Secretary/Treasurer. Rhone deposited the check into the school tax account to cover shortages resulting from his conversion of school tax payments to his personal use. In approximately February 2004, Borough auditors informed the Borough Council President that Rhone had mishandled Borough money while Tax Collector and Secretary /Treasurer, and that Rhone would repay to the Borough the money he had misappropriated. On March 12, 2004, Rhone deposited $2,242.28 into the Borough's general fund account. See, Fact Finding 78. At that point in time, Rhone no longer held a public position with the Borough. On March 13, 2004, Rhone sent a letter to Borough Council explaining that the March 12, 2004, deposit was due to various payments that he accidentally deposited into the wrong account. Rhone did not disclose to Council that he had intentionally converted tax payments to his own personal use during 2002 and 2003. During April and June 2004, Rhone made four additional payments to the Borough totaling $1,650, as detailed in Finding 81. Rhone explained in additional correspondence that of this amount, two payments of $112.50 each were for two payments he was overpaid as Secretary /Treasurer. The parties have stipulated that the total private pecuniary gain realized by Rhone as a result of the use of the authority of office was $8,253.34. Fact Finding 86. Turning to the Fact Findings pertaining to Rhone's Statements of Financial Interests, the parties have stipulated that Rhone's Statement of Financial Interests for calendar year 2001 failed to disclose income received from his employment with CCCS, and that Rhone failed to file Statements of Financial Interests with the Borough for calendar years 2002, 2003, 2004 and 2005. Rhone was required to file Statements of Financial Interests for calendar years 2002 and 2003 in his position as Borough Tax Collector. Rhone was required to file a Statement of Financial Interests for calendar year 2004 in his position as Borough Secretary /Treasurer. Rhone was required to file a Statement of Financial Interests for calendar year 2005 as the former Borough Secretary /Treasurer. During years when he failed to file Statements of Financial Interests with the Borough, Rhone received compensation from the Borough, County and School District in the total amount of $7,498.00. Having highlighted the Stipulated Findings and issues before us, we shall now apply the Ethics Act to determine the proper disposition of this case. The parties' Consent Agreement sets forth a proposed resolution of the allegation as follows: 3. The Investigative Division will recommend the following in relation to the above allegations: a. That a violation of Section 1103(a) of the Public Official Rhone, 05 -045 Page 24 and Employee Ethics Law, 65 Pa.C.S. §1103(a) occurred when Rhone made payments from borough accounts to himself in excess of the salary set by the borough council; and b. That a violation of Section 1103(a) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(a) occurred when Rhone, as Tax Collector, converted tax payments to his own personal use; and c. That a violation of Section 1104(a) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1104(a) occurred when Rhone, as Tax Collector, failed to file Statements of Financial Interests for Starrucco Borough for calendar years 2002 and 2003; and d. That a violation of Section 1104(a) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1104(a) occurred when Rhone, as Secretary/Treasurer, failed to file a Statement of Financial Interests with Starrucco Borough for calendar year 2004; and e. That a violation of Section 1104(a) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1104(a) occurred when Rhone, as the former Secretary /Treasurer, failed to file a Statement of Financial Interests with Starrucco Borough for calendar year 2005; and f. That a violation of Section 1105(b)(5) of the Public Official and Employee Ethics Law, 65 Pa.C.S. 1105(b)(5) occurred when Rhone, as a candidate for Starrucca Borough Tax Collector, failed to disclose Consumer Credit Counseling Services as a source of income on his Statement of Financial Interests filed for calendar year 2001. 4. Rhone agrees to make payment in the amount of $6,000 in settlement of this matter payable to the Commonwealth of Pennsylvania and forwarded to the Pennsylvania State Ethics Commission within ninety (90) days of the issuance of the final adjudication in this matter. Rhone also agrees to file an [sic] Statement of Financial Interests for calendar years 2002 through 2005 inclusive, and file an amended Statement of Financial Interests for calendar year 2001 with Starrucca Borough and a copy to this Commission for compliance purposes. 5. The Investigative Division will recommend that this matter be referred for review by the appropriate law enforcement authorities. Nothing in this agreement shall prohibit the Commission from initiating appropriate enforcement actions in the event of Respondent's failure to comply with this agreement or the Commission's order or cooperating with any other authority who may so choose to review this matter further. 6. Rhone agrees to waive his rights to an evidentiary hearing and appellate rights without prejudice to so proceed in the event that the State Ethics Commission does not accept this agreement. Rhone, 05 -045 Page 25 Consent Agreement, at 2 -3. In considering the Consent Agreement, we agree with the parties that a violation of Section 1103(a) of the Ethics Act occurred when Rhone made payments from Borough accounts to himself in excess of the salary set by Borough Council. Each element of a violation of Section 1103(a) has been established. Rhone's authority as Borough Secretary /Treasurer included responsibility for handling all accounts payable and receivable functions for the Borough; producing his own payroll checks from the Borough's general fund; and maintaining the checks and the check register for the Borough's general fund account. Rhone also had signature authority for the general fund account. Between July 8, 2003, and February 5, 2004, Rhone used the authority of his position as Borough Secretary /Treasurer to issue to himself two extra, unauthorized payroll checks totaling $402.88. Rhone forged the signatures of Borough Mayor Swartz and Borough Council President Downton on the extra payroll checks so that he could receive the unapproved payments. In the check register for the account, Rhone entered two of his payroll checks as having been voided, even though the checks had been negotiated, in order to conceal the extra payments. As a result of Rhone's aforesaid actions as Borough Secretary /Treasurer, Rhone received a private pecuniary benefit consisting of unauthorized compensation in the amount of $402.88. We find that under the facts of this case, in light of the egregious nature of Rhone's conduct, the private pecuniary benefit of $402.88 that Rhone derived by issuing unauthorized paychecks to himself, forging signatures on those paychecks, and making bogus entries in the check register to conceal his conduct, was significant. In this regard, the instant matter stands in sharp contrast to Bixler v. State Ethics Commission, 847 A.2d 785 (Pa. Cmwlth. 2004) (holding that a net profit in the amount of $561.77 resulting from business transactions between a township supervisor's employer and the township would fall within the "de minimis" exclusion to the definition of "conflict of interest "). Furthermore, while the recommended violation of Section 1103(a) is fully established by Rhone's issuance of the aforesaid extra, unauthorized payroll checks to himself, it is further supported by Rhone's actions in 2004 as Borough Secretary/Treasurer to convert for his personal use County check #6606, which had been issued to the Borough in the amount of $1,857.10. The parties have stipulated that Rhone converted the check for his personal use by depositing it into the school district tax account to cover shortages resulting from his conversion of school tax payments to his personal use. We accept the parties' recommendation and hold that a violation of Section 1103(a) of the Ethics Act occurred when Rhone, as Borough Secretary /Treasurer, made payments from Borough accounts to himself in excess of the salary set by Borough Council. Cf., Walters, Order 1361. We hold that an additional violation of Section 1103(a) of the Ethics Act occurred when Rhone, as Tax Collector, converted tax payments to his own personal use. The element of use of authority of office is met by Rhone's use of his exclusive control as Tax Collector over the tax payments and tax accounts to divert tax monies to himself. The element of a private pecuniary benefit is met by the tax payments that Rhone converted to his personal use. The parties have stipulated that during 2002 and 2003, while serving as Borough Tax Collector, Rhone used the authority of his public position to convert tax payments of at least $5,997.36 for his personal use. Obviously, there is no provision in the Local Tax Collection Law that would permit a tax collector to convert tax payments to personal use. Rhone's conduct was egregious, and the finding of a violation of Section 1103(a) as to the converted tax payments is warranted and consistent with this Rhone, 05 -045 Page 26 Commission's precedent. See, ColeIla, Order 1130; Gulnac, Order 1135. Turning to the recommended violations of Sections 1104(a) and 1105(b)(5) of the Ethics Act, the parties have stipulated that Rhone's Statement of Financial Interests for calendar year 2001 failed to disclose income received from his employment with CCCS, and that Rhone failed to file Statements of Financial Interests with the Borough for calendar years 2002, 2003, 2004 and 2005. Rhone was required to file Statements of Financial Interests for calendar years 2002 and 2003 in his position as Borough Tax Collector. Rhone was required to file a Statement of Financial Interests for calendar year 2004 as Borough Secretary /Treasurer. Rhone was required to file a Statement of Financial Interests for calendar year 2005 as the former Borough Secretary /Treasurer. Accordingly, we hold that a violation of Section 1105(b)(5) of the Ethics Act occurred when Rhone, as a candidate for Borough Tax Collector, failed to disclose his employer, Consumer Credit Counseling Services, as a source of income on his Statement of Financial Interests filed for calendar year 2001. A violation of Section 1104(a) of the Ethics Act occurred when Rhone, as Borough Tax Collector, failed to file Statements of Financial Interests with the Borough for calendar years 2002 and 2003. Rhone again violated Section 1104(a) of the Ethics Act when he, as Borough Secretary /Treasurer, failed to file a Statement of Financial Interests with the Borough for calendar year 2004. An additional violation of Section 1104(a) of the Ethics Act occurred when Rhone, as the former Borough Secretary /Treasurer, failed to file a Statement of Financial Interests with the Borough for calendar year 2005. As part of the Consent Agreement, Rhone has agreed to file with the Borough Statements of Financial Interests for calendar years 2002 through 2005 inclusive and an amended Statement of Financial Interests for calendar year 2001. Rhone has agreed to provide to this Commission copies of all of the aforesaid filings for compliance verification purposes. Rhone has also agreed to make payment in the amount of $6,000 in settlement of this matter payable to the Commonwealth of Pennsylvania and forwarded to this Commission within ninety (90) days of the issuance of the final adjudication in this matter. We determine that the Consent Agreement submitted by the parties sets forth the proper disposition for this case, based upon our review as reflected in the above analysis and the totality of the facts and circumstances. Accordingly, Rhone is directed to file with the Borough Statements of Financial Interests for calendar years 2002 through 2005 inclusive and an amended Statement of Financial Interests for calendar year 2001, providing full financial disclosure as required by the Ethics Act, and to provide to this Commission copies of all of the aforesaid filings for compliance verification purposes. Per the Consent Agreement of the parties, Rhone is further directed to make payment in the amount of $6,000 in settlement of this matter, payable to the Commonwealth of Pennsylvania and forwarded to this Commission within ninety (90) days of the issuance of this Order. Additionally, given the egregious nature of the violations of Section 1103(a) of the Ethics Act, this case will be referred to the Wayne County District Attorney, the Pennsylvania Attorney General, the U.S. Attorney, the Pennsylvania Department of Revenue, and the Internal Revenue Service for review and appropriate action. IV. CONCLUSIONS OF LAW: Rhone, 05 -045 Page 27 1. Respondent Dean Rhone ( "Rhone "), as Tax Collector for Starrucca Borough "Borough ") from January 2, 2001, to June 2, 2003, and as the Borough's Secretary/Treasurer from July 8, 2003, until March 1, 2004, was a public official /public employee subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. 2. Rhone violated Section 1103(a) of the Ethics Act when he, as Borough Secretary /Treasurer, made payments from Borough accounts to himself in excess of the salary set by Borough Council. 3. Rhone violated Section 1103(a) of the Ethics Act when he, as Tax Collector, converted tax payments to his own personal use. 4. Rhone violated Section 1105(b)(5) of the Ethics Act when he, as a candidate for Borough Tax Collector, failed to disclose his employer, Consumer Credit Counseling Services, as a source of income on his Statement of Financial Interests filed for calendar year 2001. 5. Rhone violated Section 1104(a) of the Ethics Act when he, as Borough Tax Collector, failed to file Statements of Financial Interests with the Borough for calendar years 2002 and 2003. 6. Rhone violated Section 1104(a) of the Ethics Act when he, as Borough Secretary /Treasurer, failed to file a Statement of Financial Interests with the Borough for calendar year 2004. 7 Rhone violated Section 1104(a) of the Ethics Act when he, as the former Borough Secretary /Treasurer, failed to file a Statement of Financial Interests with the Borough for calendar year 2005. In Re: Dean Rhone, Respondent ORDER NO. 1430 File Docket: 05 -045 Date Decided: 3/27/07 Date Mailed: 4/11/07 1 Respondent Dean Rhone ( "Rhone "), a public official /public employee in his capacities as Tax Collector for Starrucca Borough ( "Borough ") from January 2, 2001, to June 2, 2003, and as the Borough's Secretary /Treasurer from July 8, 2003, until March 1, 2004, violated Section 1103(a) of the Ethics Act when he, as Borough Secretary /Treasurer, made payments from Borough accounts to himself in excess of the salary set by Borough Council. 2. Rhone violated Section 1103(a) of the Ethics Act when he, as Tax Collector, converted tax payments to his own personal use. 3. Rhone violated Section 1105(b)(5) of the Ethics Act when he, as a candidate for Borough Tax Collector, failed to disclose his employer, Consumer Credit Counseling Services, as a source of income on his Statement of Financial Interests filed for calendar year 2001. 4. Rhone violated Section 1104(a) of the Ethics Act when he, as Borough Tax Collector, failed to file Statements of Financial Interests with the Borough for calendar years 2002 and 2003. 5. Rhone violated Section 1104(a) of the Ethics Act when he, as Borough Secretary /Treasurer, failed to file a Statement of Financial Interests with the Borough for calendar year 2004. 6. Rhone violated Section 1104(a) of the Ethics Act when he, as the former Borough Secretary /Treasurer, failed to file a Statement of Financial Interests with the Borough for calendar year 2005. 7 Per the Consent Agreement of the parties, Rhone is directed to file with the Borough Statements of Financial Interests for calendar years 2002 through 2005 inclusive and an amended Statement of Financial Interests for calendar year 2001, providing full financial disclosure as required by the Ethics Act, and to provide to this Commission copies of all of the aforesaid filings for compliance verification purposes. 8. Per the Consent Agreement of the parties, Rhone is further directed to make payment in the amount of $6,000 in settlement of this matter, payable to the Commonwealth of Pennsylvania and forwarded to this Commission within ninety (90) days of the issuance of this Order. 9. This matter will be referred to the Wayne County District Attorney, the Pennsylvania Attorney General, the U.S. Attorney, the Pennsylvania Department of Revenue, and the Internal Revenue Service for review and appropriate action. BY THE COMMISSION, Name, Case # Page 29 Louis W. Fryman, Chair