By Jennifer Kotila
HOWARD LAKE, MN Aaron DeMarais, 34, of Howard Lake, who resigned as manager of the Howard Lake Municipal Liquor Store May 18, has been charged with felony theft, according to Howard Lake Police Chief Tracy Vetruba.
In early February, Howard Lake City Administrator Kelly Hinnenkamp told Vetruba about a large number of subtotal voids which had been appearing on cash register receipts at the Howard Lake Municipal Liquor Store over several years, according to the criminal complaint.
Subtotal voids happen when items are rung up on the cash register to get a total, then voided on the recorded receipt.
Upon investigation, Vetruba discovered a disproportionate number of subtotal voids were occurring during DeMarais’ shifts.
Surveillance cameras were installed over the cash register in the “off-sale” side of the liquor store (where many of the subtotal voids had been occurring), and over the desk in the manager’s office, according to the complaint.
Vetruba reviewed the recordings taken over a two-week time period in April, and observed a number of instances in which DeMarais made a number of fake sales.
In some instances, DeMarais would pretend to ring up a sale, and collect the money for the sale.
Later, he would remove a similar amount of money from the cash register, return to the manager’s office, and place the money in his pocket or wallet.
In other instances, instead of pretending to ring up a sale, DeMarais would ring it up, but then void the transaction so it did not show on the running total of the cash register, according to the complaint.
In all but one instance, Vetruba was able to match the fake or voided sales with inventory adjustments made immediately following the sales to reflect a reduction in whatever was purchased.
Vetruba interviewed DeMarais May 3 about the incidents, at which time DeMarais admitted to taking the money, and said he had been doing it for about six months.
Upon reviewing the adjustments to the inventory records, Vetruba concluded DeMarais had taken more than $1,000 between November 2010 and May 2011 by completing fake or voided sales, according to the complaint.
Felony theft carries a maximum sentence of five years in prison and a $10,000 fine.
DeMarais is scheduled to appear in Wright County District Court Thursday, June 16 at 1:30 p.m.
Changes to liquor store policies
Because of the liquor store’s financial problems, the city’s liquor store commission has been meeting on a more regular basis to plan strategies to increase sales and revenues and cut expenditures.
At the most recent meeting, immediately following DeMarais’ resignation, the commission discussed establishing an employee handbook that would spell out all the policies, processes, and procedures of the liquor store.
At this time, there is not an employee handbook specific to the liquor store, and the liquor store employees only have the city’s employee handbook, according to Hinnenkamp.
Although it was not thought that employees were doing anything wrong at the time of the meeting, Hinnenkamp had said that without firmer policies and procedures in place, it was difficult to have oversight of liquor store transactions.
Since that meeting, the City of Howard Lake has made a series of changes to the liquor store operations.
It will continue to monitor internal controls of the store to increase the accountability of all the employees, according to a press release from Vetruba.
Liquor store entering sixth year of net losses
At January’s public hearing for the municipal liquor store, DeMarais told the Howard Lake City Council he was planning to get things moving in the right direction following a net loss of $87,239 for 2010.
“I know that’s an ugly number certainly not what we wanted or hoped for. But I am encouraged by the staff and their positive attitudes,” DeMarais said.
For the last five years, the municipal liquor store has been operating at a net loss, and, as of April 30, the net loss for this year is $7,506.
The financial issues of the liquor store have been attributed to several factors, including the bond payments for remodeling done in 2005, the smoking ban of 2007, increased competition in nearby communities, and the economy.
The losses have slowly been drawing down the city’s general fund, and as of Dec. 31, 2009, the liquor store owed the general fund $219,970.
If the net losses to the liquor store continue over the next two years, the cash reserve in the general fund will be depleted, and the city will have to start taxing residents to keep the liquor store open, according to Hinnenkamp.