By Sam Wilson
Daily Inter Lake
OLNEY, Mont. — A former chief of the Olney Fire Department has been charged with felony theft of more than $10,000 following allegations of embezzlement by residents and fire district trustees earlier this year.
Charging documents allege that between January 2012 and July 2016, former chief Ken Morehead was responsible for unauthorized purchases totaling $51,722 from the Olney Fire District’s checking account, credit cards and accounts at various businesses that were unrelated to the district’s operations.
Morehead officially resigned from his position as fire chief on July 27, and resigned from the tax district’s board of trustees in June.
The charging documents state that an audit conducted by Flathead County Finance Director Sandy Carlson found that the purchases were “personal in nature.” Morehead allegedly admitted on Aug. 4 to using the district’s funds for personal reasons during an interview with Flathead County Sheriff’s Office Detective Bret Childers.
The charges follow accusations by residents in the small community north of Whitefish that Morehead and other individuals had personally benefited from a pattern of questionable spending that pushed the small fire tax district almost $25,000 over its fiscal year 2016 budget.
Earlier this year, the district’s board of trustees sought help from county officials in addressing the issue. After compiling expenses from the prior year, Carlson outlined purchases that included thousands of dollars with little to no documentation submitted to the board. Many expenditures cited purposes including a wedding reception, gift cards, a donation to a firefighter to pay for his wife’s funeral and tens of thousands of dollars in purchases at local auto parts businesses.
Montana tax districts established for rural fire departments operate with little oversight beyond a board of trustees that sets the annual budget and manages tax revenue. Over a period of several years, the district’s budget more than doubled to $167,000 last year, in a district that primarily serves the town of about 200 residents.
Flathead County Commissioner Phil Mitchell began looking into the issue after members of the board of trustees and residents in the district contacted him with concerns about the volunteer fire department’s budget.
While Morehead’s dual role as chief and a board of trustees member was not illegal, Mitchell called it a conflict of interest that allegedly led to the fire chief wielding an outsized influence over the other board members.
In a July telephone interview with the Daily Inter Lake, Morehead acknowledged that he had used “bad judgment” in the past, but defended the expenses as part of an effort to retain the 10 or so volunteer firefighters and emergency medical responders in the department.
“It’s hard to get firefighters, and when we do, the ones we have, you’ve got to appreciate them for what they do,” Morehead said at the time. “I think it’s important to show them that we do care.”
If convicted, Morehead could face between one and 10 years in prison and a maximum fine of $50,000. He could also be ordered to pay restitution if found guilty.
A warrant for Morehead’s arrest was issued Nov. 3, with his bond set at $10,000.
Copyright 2016 the Daily Inter Lake