LOUISVILLE, KY (WAVE) - Hundreds of thousands of dollars are missing from a local high school booster club. A Jefferson County Public School athletic director and assistant principal are at the center of the IRS investigation of what happened to that money. Now, they are being hit with a lawsuit too.
WAVE 3 Troubleshooter Eric Flack first broke this story in August 2011 and said the lawsuit is the latest in an ugly chapter for Fern Creek High School Athletics.
Fern Creek athletic director Troy Johnson, assistant principal and head baseball coach Jarrad Durham and former athletic director Timothy Amshoff are being sued by the Fern Creek High School Athletic Association after an IRS investigation discovered hundreds of thousands of dollars missing while those three men were running the athletic association.
"The red flag for the IRS was that taxes were not filed for the organization from 2005-2009," said current athletic association president Tim Fries.
The IRS audit, completed late last year, revealed the men handed over altered documents to IRS agents investigating the booster club bingo operation. They found the booster club used money they raised for athletics to pay outside bills and used money raised to buy things for other charities.
Fries said the athletic association got hit with a $200,000 tax bill from the IRS in penalties and unpaid fees, which is why they are now suing the guys who they said created the mess.
"It's our responsibility to seek out those responsible for the damages that have incurred and that's all were are trying to do at this point," Fries said.
A JCPS internal investigation found Amshoff inappropriately used the JCPS tax I.D. number with the state gaming commission to run the bingo operation, but did not uncover anything that indicated other fraud or criminal activity. It noted IRS leveled the penalties against the booster club as a whole, but not the athletic directors or assistant principal.
In May, the school sent a letter to the athletic association that severed ties with the group which now said it will raise money for the betterment of the Fern Creek area as a whole. Fries said that means students will lose out on plans to upgrade fields and replace basketball goals.
Flack left a message at Fern Creek High School to get the administrators side of all this, but did not immediately reach them.
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