Former McCormick School employee sentenced for check fraud

There are countless instances of fraud involving money that flowed from federal coffers in response to the COVID-19 pandemic and one of them originated at the McCormick School.

Marcella Luis Hilliard, 35, a former clerk at the McCormick School, received a 2-year deferred sentence from Lincoln County District Judge Matt Cuffe on Monday, Jan. 30. Hilliard pleaded guilty on Oct. 31, 2022, to one felony count of forgery.

At sentencing, Eric A. Anderson, Hilliard’s attorney, argued for a 1-year deferred sentence. He asserted that Hilliard didn’t have substance abuse issues. But Cuffe opted for 2 years deferred, which was part of the plea deal.

Lincoln County School Superintendent Suzy Rios said Hilliard is no longer employed by the McCormick School.

Investigators say Hilliard forged a $5,000 check as a way to give herself a bonus.

Hilliard has already paid back the $5,000, according to county Attorney Marcia Boris.

According to the charging document filed by Boris, Lincoln County Sheriff’s Office Det. David Hall began investigating the crime on March 24, 2022.

Hall wrote in his narrative that he was assigned to investigate a matter in which the school clerk “wrote herself a $5,000 bonus check and forged the president of the school board’s name on this check.”

Hall reported Hilliard was the school clerk since June 2021, managing all of their finances. He learned that First Montana Bank of Troy, Montana, originally reported the matter after the check was brought into the bank. Bank President Jackson Garrison told Hall that an employee in Troy suspected the signature on the check was not correct after Hilliard brought it in to cash it.

After the check was cashed the bank employee contacted bank managers in Troy and Libby to notify them of her suspicions. Jackson said they contacted Lincoln County Treasurer Sedaris Carlberg and reported the matter.

The treasurer provided Det. Hall a copy of the check which was dated March 17, 2022 and written to Marcella Hilliard, signed by school Board President Peggy Harrell and District Clerk Marcella Hilliard. Hall wrote that Hilliard had misspelled her last name on the check, “Hillard.”

The Lincoln County Treasurer told Hall that Hilliard had not turned a report in to her for three months, about the timeframe Harrell had been away on vacation. Hall then met with Harrell at the McCormick School and she told him she was gone from Troy from Jan. 5 to March 18, 2022, according to the charging document. Harrell told Hall that bonuses are given to McCormick School employees at the end of the school year and are voted on and approved by the school board.

Harrell also told Det. Hall they had prior problems with the previous clerk forging her name. Harrell said when they hired Hilliard in June 2021, she told Hilliard about the problem and told her to never sign Harrell’s name in her absence. Harrell told Hall she had it set up for board Vice President James Hight to sign the checks while she was gone. Harrell showed the detective checks from January and February which Hilliard did have Hight sign.

According to Det. Hall’s report, Hilliard was then placed on leave by the school board. Harrell showed the investigator that Hilliard had dropped off records and checks at the school office with a note. Hall noted the checks had been forged in Harrell’s name, too. In the note, Hilliard reported she had been playing catch up with Harrell being out of town and because of COVID she had to follow the previous clerk’s protocol.

Harrell also found a notebook left behind by Hilliard. Harrell showed Det. Hall where Hilliard had practiced signing, “Peggy Harrell.” Harrell found the check stub for the $5,000 bonus check and under the “Check Description” Hilliard noted “Teacherage Back Hour.” Harrell told Hall she was not sure what that meant.

Hilliard cashed the $5,000 check at First Montana Bank in Troy on March 17, the same day it was issued. Det. Hall confirmed with the school district that paydays always fall on the first of the month and this “bonus check” does not correspond with their pay checks. Harrell told the investigator that Hilliard told her that someone named “Harris” received some of the money from the bonus. Harrell also told the detective that Hilliard was emotional and crying when she called her in and placed her on leave.

Harrell then told Det. Hall that Hilliard should not have received any bonus at the time and it should have been approved by the school board. Harrell also said Hilliard shouldn’t have been forging her name on the checks, according to the court document.

Det. Hall then spoke with school board member Mike Harris. According to Hall’s report, Harris said he told Hilliard to give herself a bonus check. It was done outside a board meeting, according to the charging document. Harris allegedly told Det. Hall it was a stupid thing to do, but he said he did not tell her to forge Harrell’s name. Harris, who is no longer a school board member according to Rios, also allegedly told the detective he did not have the authority to make this call and it should have been done at a board meeting. Harris also told the detective he had spoken with Harrell about giving Hilliard a bonus. Harrell said she had talked with Harris about the bonus, but an amount had not been settled upon and it would have had to be decided and voted upon at a board meeting. Rios told The Western News in a recent email that Harris is no longer a board member.

According to Det. Hall’s report, Harris told the investigator after Hilliard cashed the check, she had spent $1,500 before the bank asked her to return it. Harris also allegedly said he loaned Hilliard $1,500 to pay the money back to the bank, according to the charging document. Hall later learned during his investigation the money Hilliard removed to pay herself the $5,000 were ESSER II funds that came from a federal grant for covid-relief student learning loss.

Hall then spoke to the county Superintendent of Schools and asked her about the policy of McCormick giving bonuses. Hall learned from the official that small schools do give out bonuses at the end of the year and it is standard practice because they can not increase their pay as they do with larger schools in the area.

On March 30, Det. Hall spoke briefly with Hilliard before she said she should have an attorney and the interview ended.

Later, Hall got a subpoena for Hilliard’s bank account information and received it on May 3. He learned that a $5,000 check was cashed on March 17. Hilliard then took $900 and deposited it into her account. Hall wrote that at the time of the check cashing and deposit, Hilliard’s account had $140 in it.