An outside forensic audit of the Erie County Clerk’s Office found unexplained references to “extortion money,” deleted emails and check transaction issues at the hands of a disgraced deputy finance clerk now in state prison.
It also found no evidence that more public money was “misappropriated” from the Clerk’s Office – on top of the hundreds of thousands of dollars that the county and state comptroller and law enforcement agencies already uncovered through its audits and criminal investigations in 2023 and 2024.
But the outside auditors said they can’t conclusively state that no other money was lost, because County Clerk Michael “Mickey” Kearns refused to provide software access to financial data, leaving the auditor to rely on information shared by the County Comptroller’s Office.
Meanwhile, other elected county officials have described some email references to “extortion,” found by Texas-based accounting firm Weaver, to be deeply troubling.
In a statement, Kearns described the audit as covering old ground and a “questionable” use of county funds. He stressed that no additional money was found to be missing.
The former Erie County deputy finance clerk who embezzled more than $320,000 in public money was sentenced Friday to one and a third to four years in prison by Erie County Judge Sheila A. DiTullio.
“It is important to note, however, that this report – while largely duplicative – was produced at a considerable expense to taxpayers,” he stated.
County Attorney Jeremy Toth told The Buffalo News that his department paid Weaver $166,871 to conduct the audit.
Alexander McDougall, former deputy finance clerk, was sentenced to one to four years in prison in January after confessing to stealing more than $320,000 in public money. The Erie County Comptroller’s Office also discovered that a $326,456 check from the Clerk’s Office was intercepted and counterfeited by mail thieves in 2022. The County Legislature subsequently commissioned a forensic audit to determine whether there was any other criminal wrongdoing that may have been missed by other investigating agencies, among other things.
The final outside audit by Weaver shores up the original findings of the Erie County Comptroller’s Office, State Comptroller’s Office and subsequent criminal investigations by the Erie County Sheriff’s Office and District Attorney’s Office.
However, Weaver was also directed to determine whether any other people could have been complicit in the fraudulent scheme orchestrated by McDougall. To that end, more than 51,000 work email messages from 2019 through January 2025 were pulled by the county administration and provided for Weaver’s review, over Kearns’ objections, after a process was created to hold back any information considered sensitive, such as pistol permit information.
Erie County Clerk Michael “Mickey” Kearns was met with pushback and scorn from legislators regarding his complaint about emails from his disgraced finance deputy being provided to an outside auditor.
‘Extortion’ emails
Weaver’s email review found four emails sent from McDougall’s personal email to his work email in 2020, 2021 and 2022 with subject lines that referred to money for Kearns. One email on Sept. 14, 2020, included “$ Mickey” in the subject line. One from April 26, 2022, had the words “Mickey’s extortion money” in the subject line. And one from June 1, 2022, had “Extortion money” in the subject line. No information was provided in the body of the email.
“The investigation found email activity that may warrant additional examination,” the Weaver audit stated.
In response to a request to speak with Kearns regarding this and other findings, his spokesman provided a statement from the county clerk, saying, “Neither I nor anyone else at the Erie County Clerk’s Office was aware of these two emails sent by Mr. McDougall from his private email account to his government account. Only Mr. McDougall received these emails. I vehemently deny any implication drawn from these emails regarding the word ‘extortion,’ and I believe this may constitute a reckless and defamatory insinuation.”
Erie County Executive Mark Poloncarz said he found those email references in the Weaver audit to be shocking.
The failure of the Erie County Clerk’s Office to hire an outside forensic auditor to investigate tax money misappropriations has led the Erie County Legislature to vote 8-3 Thursday to direct the County Attorney’s Office to do it.
“I think the only person who can explain what that means is Alex McDougall, who I think is still in jail,” Poloncarz said. “I don’t know if Mickey was doing something that we need to be fully aware of, but maybe now this explains why Mickey was very worried about this audit going forward, as well as the review of the emails.”
A Buffalo News review of the email timeline found that the emails predate the Comptroller’s Office audits of the Clerk’s Office. The Clerk’s Office was asked if these emails could have been related to fundraisers or political contributions, in which donations are commonly expected of high-ranking political appointees in many public offices.
Kearns did not directly address this, but said in his statement, “Any suggestion that these communications implicate me in any way of any wrongdoing is categorically false, and wholly without merit.”
Stonewalling accusations
Weaver auditors were critical of delays by the Clerk’s Office in providing requested information, and the refusal by the Clerk’s Office to provide access to the clerk’s NewVision financial software system. Efforts to access Clerk’s Office information, starting in December, were repeatedly delayed or blocked, the audit stated.
A second audit focused on the handling of mortgage taxes and found problems including thousands of dollars that were not properly distributed and too much money given to some towns and not enough to others.
“It is our understanding that as one concern was addressed, a different concern would be raised,” the audit states, also noting, “Additionally, several essential items, including access to the NewVision system and personnel files, were never furnished by the Clerk’s Office.”
In a 12-page response to the audit that Kearns submitted to the County Legislature, Kearns said the auditor did not make multiple documentation requests of his office, and that all “purported delays” were the fault of Weaver or the County Attorney’s Office.
He also said Weaver was not granted access to the NewVision system because he had restricted permissions for its use, even though Weaver was working on the county’s behalf.
“Because the system cannot limit or suppress access to specific data types, granting such access would compromise the confidentiality and security of the information contained within the system,” Kearns stated. “Therefore, the Clerk’s Office was unable to provide the requested access.”
Question of money
For several months, backed by the recommendation of an outside auditor, Comptroller Kevin Hardwick has been trying to get access to the County Clerk’s Office accounts, to no avail, until now.
Both Kearns and Comptroller Kevin Hardwick agree that the findings and recommendations in the Weaver report echo many of the same findings that Hardwick’s office initially uncovered. However, Hardwick, a Democrat, pointed out that Kearns, a Republican-endorsed Democrat, initially accused him of being politically motivated and grandstanding in his audits of the Clerk’s Office.
“The reason I wanted the outside audit in the first place was so that there would be no doubt that these were real problems, and I think that’s what we found,” Hardwick said. “Now, did we find the extent of all of the problems? No, because they (Weaver) ran into some of the same roadblocks that we encountered.”
Kearns called the outside forensic audit something that “was redundant and added nothing new” to previously published findings.
Weaver did find potential evidence of either check tampering or bank errors made in one instance, as well as evidence that McDougall deleted emails attempting to follow up on the check discrepancies. Email deletion actions are traceable in the county’s email system.
Finally, the audit referred to an email exchange with a county auditor who raised a question about discrepancies in check and cash deposits, to which McDougall initially responded, “that’s weird and concerning.” He provided no proper follow-up, despite pledging to do so.
“Inconsistencies or unexplained discrepancies in daily fee deposits handled by Mr. McDougall raise concerns about potential misappropriation or misreporting of funds,” the audit stated.
What’s next
The County Legislature received the Weaver audit earlier this week, but it will likely be at least a couple of weeks more before a committee meeting, if any, is arranged to follow up on the audit findings. The fact that the audit could not conclusively state that no additional money went missing because of the lack of access to key data raises questions about whether there is any value in further pursuing the matter.
“How bad do you want to know whether there’s anything else missing, and how much are you going to pay to find something that may or may not be missing?” Hardwick said. “I think everybody might have a different answer, but my answer would be there are probably other places in Erie County that we might be better spending our time.”
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Sandra Tan
Reporter
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