North Hennepin Community College swindler sentenced

A swindler of the Community College Foundation and another nonprofit has been sentenced, according to the Hennepin County Attorney’s office.

Alison Klug, also known as Alison Reily, 38, was sentenced on July 24 to 46 months in prison, but was placed on probation for five years and will not serve her prison term unless she violates the terms of her probation.

Hennepin County District Court Judge Lisa Janzen also sentenced Klug to one year in the Hennepin County workhouse and ordered her to pay restitution of $190,655 to the North Hennepin Community College Foundation and $22,105 to the Tonka Alano Society.

Senior Assistant Hennepin County Attorney Susan Crumb told Janzen that because Klug planned her swindles, has a prior criminal record, and has in the past not been deterred from committing crimes as a result of her probation, she should serve a 46 month prison term rather than receive probation.

Janzen told Klug she was giving her a downward departure from the sentencing guidelines because Klug has serious mental health issues, and because Klug is “particularly amenable to treatment.”

At Klug’s sentencing, three people connected with the college foundation spoke on the impact of Klug’s swindling. The foundation was not able to host a fundraising dinner for the first time since 1985 because of Klug’s fraud. Klug’s supervisor also said she was fired as a result of Klug’s swindle.

The foundation raises money that helps provide scholarships for students who would otherwise not be able to afford the college’s tuition, among other things.

Klug was hired by the foundation in 2014 as an independent contractor after first coming to the foundation through a temporary agency, according to the criminal complaint.

During a 2016 audit of the foundation, Klug answered an auditor’s questions regarding discrepancies in the audit findings, left at her normal time, and never returned.

Klug’s services were terminated when the foundation was alerted of the inconsistencies in the audit.

The audit found that Klug created duplicate paychecks for herself, created fake payees in the bookkeeping database who could receive checks and forged her supervisor’s signature on those checks.

Klug pleaded guilty to the swindle, stealing a total of $181,500 from the foundation, approximately 20 percent of the foundation’s funds.

A Brooklyn Park police investigator who was inspecting Klug’s bank records found that between Sept. 12 and Nov. 3, 2016, Klug made regular deposits with checks from the Tonka Alano Society, which is located in Mound. When contacted by police, the society told the investigator that Klug was lead treasurer of the society, an unpaid position, and that she should not have received any money from the organization.

When the society – which helps recovering alcoholics – checked its bank accounts, it found that they had been drained down to $5.

In total, Klug stole $19,000 from the society.

A member of the society told Janzen that the organization had raised that money over eight years, and now much needed repairs to the society’s building and tools to help clients with recovery will be delayed.

When Klug was arrested, she admitted to police that she had stolen from the foundation, saying she needed the money to pay bills. She told police that she had stolen approximately $50,000.

Klug told police that after she was fired from North Hennepin, she began writing checks for herself from the Tonka Alano Society to pay for student loans and credit card debt. She apologized and offered to pay back some of the money over time.