Former Alcova Superintendent Sues Natrona County for Defrauding Bureau of Reclamation

The former superintendent of Alcova Reservoir claims in a federal lawsuit that Natrona County's Road and Bridge Department filed false financial reports about Alcova, Pathfinder and Gray Reef reservoirs amounting to more than $1 million to the U.S. Bureau of Reclamation, according to court records.

"While creating the appearance that it was operating the Reservoirs at a loss, the County has for the most part actually operated the Reservoirs at a profit and has diverted those profits to county uses other than Reservoir maintenance and operation," according to Charles Loraas and the Wyoming U.S. Attorney's office. They filed the lawsuit on Oct. 18, 2013, and U.S. District Court Judge Alan Johnson unsealed the complaint on May 1.

Loraas and U.S. Attorney's office spokesman John Powell declined to comment.

The bureau owns the reservoirs and the immediate surrounding shorelines where thousands of fun-seekers camp, swim, picnic, rent cabin and trailer spaces, rent boat slips, and shop, drink and eat at the marinas. The bureau has an agreement that the county can charge for these amenities and use those revenues solely to make improvements at the reservoirs.

But the Road and Bridge Department did not adhere to the agreement, according to the lawsuit filed by Loraas's attorneys James Barger Jr., and J. Elliott Walthall of Birmingham, Ala., and H. Clay Fulcher of Dubois. The attorneys did not return calls seeking comment.

According to the lawsuit, the department:

• Falsified records when bought equipment with reservoir revenues and used it for other purposes.
• Used reports of the high expenses to justify the need for more money for construction and maintenance.
• Obtained grants from the bureau that in effect had the federal government pay twice for the same work and equipment.
• Did not repay misappropriated funds.

In the past decade, the county cited revenue shortfalls -- and angered those who recreated at the reservoirs -- when it raised fees on trailer and cabin spaces, the marinas and other facilities.

"Mr. Loraas determined that the County was defrauding the United States to the detriment of the federal taxpayers, the Reservoirs, and those that use and enjoy them," according to the lawsuit. "When he attempted to bring this to the attention of County officials, however, he was terminated," according to the lawsuit. Department Superintendent Mike Haigler informed Loraas of his termination in March 2011.

Monday, Haigler said he was unaware of the lawsuit.

Because the reservoirs are supposed to be self-sustaining, the county does not supplement their operations from its general fund. But the alleged false financials reports essentially created two sets of books.

"Natrona County's reports were almost invariably at odds with the numbers recorded in its own records. All told, from the period of 1999 to 2011, Natrona County reported Reservoir expenses to the BOR $930,679.13 greater than it recorded on its own books and records. By the same token, Natrona County reported to BOR Reservoir income $271,833.53 less than it recorded on its own books," according to the lawsuit.

Loraas and his attorneys filed the lawsuit under the federal False Claims Act, which allows whistleblowers to obtain triple damages against people and companies that defraud the federal government.