Former City Employee Accused Of Embezzling More Than $100,000 From Sulphur Springs

SULPHUR SPRINGS (KFSM) — The former officer manager for the city of Sulphur Springs is accused of embezzling more than $100,000 in city funds, including $75,000 in grants from the Federal Emergency Management Agency (FEMA).

Benton County sheriff’s deputies investigating the allegations said they believe Codi Bates is also responsible for $50,000 more in city funding that has yet to be accounted for.

Bates, 32, was hired in July 2017 and stole about $101,629.49 before being fired in April, according to a probable cause affidavit.

Deputies noted she also gave herself multiple raises, despite not being eligible for a pay increase and being written up repeatedly for infractions, according to the affidavit.

Bates and her husband, Tyler, were arrested Wednesday (May 22) in connection with theft of property and forgery — both felonies. Formal charges haven’t been filed.

State auditors began reviewing the city’s finances in March and immediately started seeing “major discrepancies,” according to the affidavit.

When the city learned there was a potential problem, it contacted law enforcement and let the sheriff’s office handle the investigation, according Bryan Vernetti, city attorney.

Mayor Shane Weber told deputies Bates was the only person in the city that handled the city’s accounts and the sole person with access to the city’s online banking system.

Several of the checks that appeared to be written to pay the city’s bills were actually deposited into Bates’ and her husband’s personal bank account.

“Basically, (Bates) would issue herself or her husband a fraudulent check and use the mobile deposit application to put the funds into their joint checking account,” according to the affidavit.

Although each check required two signatures, investigators believe Bates forged signatures from the mayor or city council members.

Bates primarily forged the checks from the city’s general and water funds. Both she and Tyler spent the stolen money from their personal account. Investigators found several forged city checks at the Bates’ home in Gravette.

Deputies noted that Tyler Bates never worked for the city, but was paid once by Weber for a job he did as a private contractor, according to the affidavit.

Codi Bates is free on bond. Tyler Bates was being held Friday (May 24) at the Benton County Jail on a $30,000 bond.

Both are due July 1 in Benton County Circuit Court.