Naknek's electrical utility is suing its former longtime general manager, claiming she stole nearly $1 million through misuse of a company credit card for more than a decade.
Donna Vukich used the Naknek Electric Association's card to make nonbusiness purchases and to pay her bills from 2004 to 2016, amounting to $970,358, according to the lawsuit.
Association attorney Andrew Fierro said Vukich's purchases included "personal travel," but he did not offer specifics on other items.
"We have some idea of what she bought from invoices, credit card statements spanning years and years," Fierro said in a phone interview. "It was an array of different things."
The company was unaware of the thefts and regularly paid monthly charges during the 12 years, according to the lawsuit.
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The association learned about the unauthorized use of the credit card in early 2016 after a routine audit, according to the lawsuit. The discovery prompted an internal investigation, and Vukich handed over $398,000, the lawsuit contends. The company claims it made further efforts to recover the money and demanded full repayment on Feb. 17.
The former general manager failed to meet the deadline for full repayment and stopped paying altogether, according to the lawsuit.
Vukich still owes the company more than a half-million dollars, according to the lawsuit.
Naknek Electric is asking the court to make her pay the money immediately; it's also seeking $1 million in punitive damages on a claim she breached her "fiduciary duty," the lawsuit says.
In Vukich's response to the lawsuit, filed March 31, she denied she used the card without permission in the amount alleged by her former employer. She also denied she paid back any amount of money.
Vukich's attorney, Brian Heady, could not be reached for comment.
Vukich retired in March 2016, said NEA board of directors president Nanci Lyon. She worked for 18 years as general manager of Naknek Electric Association, a member-owned, nonprofit cooperative in the Bristol Bay community of about 500 residents. She led a costly geothermal project aimed at lowering the price of electricity to members, one in a battery of financial troubles for the association. That contributed to its filing for bankruptcy in 2010, according to an Anchorage Daily News article.
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Lyon said the company has been out of bankruptcy status for about three years.
The association's board of directors has contacted authorities to assist in resolving the alleged thefts, according to a letter sent to members of the nonprofit on March 21.
The Bristol Bay Borough Police Department was investigating the alleged thefts with the help of the FBI and IRS, according to officer John Rhyshek. State criminal prosecutors are aware of the investigation, he said.
Police knew of the association's money issues through the company's newsletters to its members, Rhyshek said. No one came forward before early 2016, but it was up to the company to ask for the involvement of law enforcement, he said.
Attorney Fierro said the board of directors went to police after its own investigation was finished, to ensure they had all the needed evidence.
Lyon wrote in the letter to association members that controls were being instituted to safeguard the company in the future.
"(T)he board and management both feel confident in reporting that the amount of misappropriated funds is not enough to affect payroll, benefits, cash flow, creditworthiness, or ongoing operations in any material way," the letter says.