CFO of Kentucky city sentenced for stealing nearly $1 million through false expenses and pocketing cash payments from residents

The chief financial officer of a small city in Kentucky was sentenced to 35 months in prison and ordered to pay restitution after she embezzled nearly $1 million dollars of funds from the small government.

According to the U.S. attorney's office for the Western District of Kentucky, Tracy Hudson, 42, took in over three-quarters of a million dollars from the city of Bardstown, Kentucky, over a period of six years while employed as a government official.

Hudson previously worked for the city as the occupational tax administrator before becoming its CFO. Between 2013 and September 2019, she managed to steal funds through a variety of methods, most often in cash.

Not only would she take cash for personal uses, but when citizens would make cash payments for city services, Hudson would steal at least a portion of the money.

The CFO paid herself for false expense reimbursements and would divert extra payments into her 401(k) pension plan in excess of the amounts she was entitled to.

The 42-year-old would also purchase personal items using a city credit card without authorization and would even credit payments to her personal account without her making any purchases at all.

Hudson made interstate wire transfers for certain amounts in an attempt to hide her various thefts from the city, but now she will be forced to pay back Bardstown, along with its insurance comapny.

The woman is ordered to pay $629,972.39 in restitution, in addition to her nearly three years of prison time, ending with three years of supervised release.

The FBI and Kentucky State Police engaged in an investigation in the city, which has a population of less than 14,000, growing by less than 2,000 people from 2010 to 2020.

Just 20 minutes northeast of Bardstown, in Bloomfield, Kentucky, another public official is under investigation for theft. Public Works Superintendent Scott Thompson recently resigned while under investigation, with police saying he was "taking money and abusing his office" for years.

“This ranges from suspected time card abuse and fraud where he has stated or implied that he was working for the city when he was not," said Bloomfield Police Chief Steve Cambron.

The police chief also said that Thompson used city credit cards and vehicles for personal use, while giving some residents opportunities to pay utility bills while others had services shut off.

"I am not a thief," Thompson said in a statement, adding, "I formally apologize to everyone. In light of all the goings-on I have formally turned in my resignation."

The investigation is ongoing.

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