City files lawsuit against alleged embezzler, former auditors Woman accused of stealing more than $1 million now faces civil and criminal cases Courtesy Diane Maxine Richards, former budget analyst for the city of Kingman. Originally Published: March 8, 2017 5:59 a.m.KINGMAN – The City of Kingman wants its money back. The city has filed a lawsuit against former interim finance director Diane Richards for roughly $1.1 million she allegedly embezzled over the course of eight years to pay off gambling debts at Nevada casinos and other bills. The city and the Arizona Municipal Risk Retention Pool sued Richards and her John Doe husband on Feb. 24 in Mohave County Superior Court. It also sued Heinfeld, Meech & Co., its auditor from 2001 until 2015. Richards’ husband is deceased. “It’s part of a complaint and we are working to recover those monies” said City Attorney Carl Cooper, who added that the main complaint is against the auditors. “We’re still hoping to recover restitution from the criminal charges against Richards,” Cooper said. “We’re pursuing every avenue to recover the city’s losses.” Richards also faces a 23­count criminal grand jury indictment, according to the civil lawsuit. Richards’ attorney, Adam Zickerman, could not be reached for comment. She is due back in court later this month. Investigations began in September 2015, after Richards’ bank tipped off the Arizona Attorney General’s Office and Immigrations and Customs Enforcement Homeland Security Investigations to “highly unusual activity involving Ms. Richards’ bank accounts,” according to the complaint. When in November 2015 the state and feds informed the city of widespread fraud, it fired Richards immediately – she resigned pretty much at the same time – and fired HeinfeldMeech a few weeks later. The Risk Retention Pool hired a forensic accountant, which “discovered three methods in which Ms. Richards conducted fraudulent transaction totaling $1,113,589.85 in city funds,” according to the complaint. Originally Published: March 8, 2017 5:59 a.m. By Aaron Ricca ARicca2Sign in to favorite this Contact Us The three methods were taking money from the city’s Employee Benefits Trust Account, cash advances on city credit cards and fraudulent transactions on city credit cards. The suit claims HeinfeldMeech breached its duties as auditor, failed to perform “in accordance with acceptable accounting standards, failed to detect inaccuracies in financial statements, failed to properly assess the internal control for the risk of material misstatements on financial statements, and failed to detect material misstatements on the city’s financial statements.” HeinfeldMeech and Kingman’s attorneys William Doyle and Jonathan Yu could not be reached for comment. Richards is at home awaiting trial on $10,000 bond. It is the largest embezzlement allegation in Kingman’s history. More like this story Kingman eyes auditor in $1.1 million embezzlement case Auditor: City guilty of 'material weaknesses' in wake of embezzlement Hearing for alleged $1.1 million embezzler coming up Scandal is being kept 'under the rug' (Letter) $1.1 million worth of irony in Kingman embezzling case SUBMIT FEEDBACK Click Below to: File a Rant or Rave about this story Ask us a question Submit a letter to the editor Send us a news tip or story idea This Week's Circulars Hover for Circular Hover for Circular 7 days  30 days Kingman: Man with warrant out of Kingman forces lockdown at Bearizona, captured. Obituary: Dr. Dennis Dale Gustafson Kingman: Higher Minimum Wage Challenges Business Kingman man arrested for stolen vehicle, meth Man douses self, woman with kerosene and attempts to light them on fire Mohave County’s Most Wanted MOHAVE 911 15 with disabilities get pink slips with Achieve’s closing Arizona Supreme Court limits DUI law on taking blood samples 15 veterans get escort to final resting place Friday  MOST READ