A former claims supervisor for the D.C. Unemployment Compensation Board was indicted yesterday by a federal grand jury examining alleged financial abuses within the agency.
Iola J. Etienne, 39, of 711 Gallatin St. NW. was chargedd with diverting about $15,000 worth of unemployment checks to her use over a 1 1/2-year period ending last February.
The indictment is the first charge to come out of the investigation, which has been hampered by what investigators said was poor bookkeeping and apparently missing documents at the agency.
The director of the agency, William V. Wilkerson, denied the general criticism of his agency's bookkeeping, saying only that investigators had found the "possibility that several files may have been destroyed by one individual who is under investigation.
Etienne left the board in March after charges were brought to dismiss her, according to a board official. Investigators said her salary was over $20,000 a year.
According to the indictment and to Wilkerson, Etienne determined eligibility of applicants for unemployment payments and sent through the vouchers that are made into checks.
She would have checks intercepted in the mail room and returned to her and would continue to have payments issued for persons who were no longer eligible for the payments, according to the charges. Twenty-one of the 34 counts filed against her yesterday involved forgeries of checks by her, according to the indictment.
The investigation began when an internal probe irregularities in the handling of checks, investigators said.
Secret Service agents, who have the primary responsibility for handling investigations involving U.S. Treasury checks, then were called in to the agency.
Among the areas investigated was the agent's mail room, where the checks apparently could be intercepted at the request of a supervisor.Wilkerson said, however, that no criminal responsibility was found in that area although mail workers would adjust their procedures to conceal the fact that checks had been removed at a supervisor's request.
At one point in the probe, investigators reportedly were concerned that a fire at the unemployment board may have been set deliberately to destroy documents needed in the investigation. Wilkerson said yesterday there was no evidence to connect board employees to the fire.
Wilkerson described the investigation into alleged abuses "as part of the problem of doing business." But, he said, "it can just kill the entire outlook for the program. It can make the rest of the employees, it makes the administration and it makes the system look bad . . ."
The maximum unemployment benefit available is $148 a week, depending on a variety of factors such as length of time the applicant worked and the money earned. Payments can be collected up to 34 weeks.
Assistant U.S. Attorney Brian Shaughnessy of the fraud division said the investigation is continuing. Etienne was specifically charged with 21 counts of uttering forged U.S. Treasury checks, which carry maximum penalties of 10 years imprisonment each: and 13 counts of embezzlement of property from the District of Columbia, each of which carries a maximum penalty of 20 years in prison.