By Liz Moomey

liz.moomey@salisburypost.com

LANDIS — The town filed a lawsuit Wednesday against Reed Linn, the former town manager, and Ginger Gibson, the former finance officer, for allegedly misappropriating money.

The lawsuit seeks to freeze the retirement accounts of both Linn and Gibson in advance of a judgment in the case. It could also alter their 401(k) retirement amount if it is found that the two inflated their salaries. Both Linn and Gibson participated in the State Treasurer’s North Carolina Total Retirement Plan, which includes the NC 401(k) Plan.

The civil lawsuit says that interim Finance Officer Roger Hosey reviewed the payroll system and discovered “monies assigned in excess of $25,000 for the unauthorized payment of salary and contributions to the (retirement) plan on behalf of or to the benefit of Linn.” The lawsuit says Gibson also received benefits in excess of $25,000.

Linn and Gibson resigned from their positions on Feb. 7 after the announcement of a State Bureau of Investigation probe looking into possible embezzlement.

According to the lawsuit, Linn and Gibson reportedly paid themselves with a direct deposit to their personal bank accounts. Payments allegedly were made by Gibson at Linn’s direction.

The suit, filed by Town Attorney Rick Locklear, alleges that Gibson presented employee compensation in a lump sum to the Landis Board of Aldermen, instead of itemizing by employee, and that Gibson’s and Linn’s compensations were inflated.

“Linn made false misrepresentations and concealed materials as to the financial status of the town to the board,” the lawsuit states, “as well as false misrepresentations and concealments of material fact as to the compensation he was entitled to receive through payroll as well as what he was actually receiving through payroll, and the nature and purpose of checks he authorized made payable to himself.”

The Local Government Commission, an agency in the State Treasurer’s Office that oversees local government finances, has alerted the town for years about concerns relating to the town’s spending. Commission representatives met with town officials after the announcement of the investigation and the appointment of interim Town Manager Kenny Isenhour.

The lawsuit covers a period starting on July 1, 2017, and continuing to Feb. 7, 2019. The suit alleges that Linn and Gibson made false representations to the town board during that time about their total compensation. However, town officials say they are continuing to look into 10 years of possible mishandling of funds.

Locklear said the town board felt that the lawsuit was “a proactive step we should be taking.”

He further said the status of the two former employees has not changed and that no charges have been brought, but the lawsuit is part of the town’s attempt to stabilize additional town funds.

A town official said Landis expects to update the salaries of Linn and Gibson based on the amounts reported by the state treasurer later this week. The information will be published on the town website’s Transparency section, townoflandis.com/transparency.

Efforts to reach Gibson and Linn for comment were unsuccessful Wednesday evening.