A longtime employee of the Silver Creek Water District has resigned amidst allegations of theft of more than $800,000 in district funds. Harvey “Leon” Palmer, who was the secretary and bookkeeper for the irrigation district for 42 years and a former city manager of Taylor, has allegedly admitted to investigators that he “loaned” the funds to Margaret “Peggy” Rogers, also known as Margaret Vallborn, in multiple weekly payments over approximately four years without the district board’s knowledge.
In a complaint filed by the Navajo County Attorney’s Office on Feb. 13, it states that the issue came to light after Board President Dee Johnson began pushing for an audit of the district’s accounts by an outside auditor late last year. The district is a political subdivision of the state of Arizona and is owned by shareholders, or water users, in Snowflake, Taylor, Shumway and surrounding areas.
Johnson told investigators that in January, the 77-year-old Palmer had approached him stating there would be a problem with an audit because he had loaned irrigation district funds to Rogers and she had not repaid the money.
The matter was reported to law enforcement and a sampling of bank statements for the previous year and a half were reviewed that showed checks bearing Palmer’s signature in amounts up to $2,500 were made out to “cash” on the district’s checking account and cashed three to five times a week at the National Bank in Snowflake without the knowledge of the board.
District policy requires two signatures for checks written on the account and amounts over $1,000 must have board approval but the bank cashed the checks with just the one signature.
Palmer, a one time bank manager of the First National Bank in Snowflake and in Holbrook, resigned from his position with the district a week after Johnson contacted police and turned in all district property in his possession.
An investigative report provided by the Navajo County Attorney’s Office shows that Palmer and his wife 77-year-old Gloria Ann Palmer had been acquainted with Rogers for many years and that Palmer had initially loaned Rogers $15,000 of his own money. When his wife learned about the loan she allegedly demanded it be paid back. Rogers paid back the money over a period of time but investigators believe district funds may have been used to repay that loan.
It is also alleged that Gloria Palmer was aware that her husband had been giving Rogers district monies for at least two years and failed to inform the district or law enforcement officials.
When asked by investigators why he had given district money to Rogers, Palmer reportedly said that he had done so as an investment, believing that the 10 percent interest he expected to receive from the loan would be much more than the two-tenths of one percent interest provided by the bank, even though no contractual agreement had been in place. He claimed that Rogers told him the money was to fund a diabetes study that required a great deal of travel. In reality investigators suspect that Rogers used the money to support numerous gambling trips to area casinos and that she may no longer have any of the funds in her possession.
Palmer also allegedly told investigators that he had been trying to get Rogers to repay the money, telling her he would go to jail if she didn’t, but she always made excuses as to why she couldn’t as Palmer continued to provide her with more money.
Investigators also allege that in addition providing money to Rogers, the two were also involved in a sexual relationship. The complaint states that his wife had confiscated nine cell phones from her husband in an effort to stop him from exchanging sexually explicit texts with Rogers over the same time frame that the money was given to her.
Rogers’ husband, Russell Rogers, was also interviewed by law enforcement and said his wife worked as a “secret shopper” with Casino Gaming in Las Vegas and Palmer was cashing checks for her because she didn’t have a bank account.
Although the Rogers’ home is in Globe, he said they would travel to Snowflake several times a week to pick up cash from the storage unit and his wife and Palmer would sometimes meet in a field on Ramsey Lane in Snowflake. When asked by investigators if he didn’t think it was unusual for his wife to meet in a field with another man, he said he hadn’t thought much about it although he had been aware that she had been sending pictures of naked women to Palmer. He claimed he was unaware of any diabetic study being conducted by his wife.
As of press time no criminal charges had been filed against Palmer, his wife or defendants listed as John Doe 1 through 3. The complaint does state that the actions being taken are based upon conduct including, but not limited to, fraudulent schemes and artifices, theft, forgery, money laundering, and misuse of public funds.
All of the criminal allegations made by the Navajo County Attorney’s Office were denied by the Palmers in a reply to the complaint made by Palmer’s attorney Jon H. Saline. A Notice of Seizure was served on the Palmers on Feb. 1 for real property and U.S. currency.
Palmer’s son Shawn Palmer is the current vice mayor of Taylor and was asked to comment on the allegations.
“This whole thing has come as a shock to the entire community, but more so to our family,” he said in a text response following a phone call, adding, “My dad is a very compassionate man, and has always been willing to help others. He has spent his entire life in the service of others. He has helped literally thousands of people throughout his life in many ways.”
Palmer cited his father’s inability to make reasonable decisions because of his declining health. “He’s been suffering from dementia for the past few years. He’s also suffered two strokes,” he said.
Palmer went on to say that while his father was the mayor of Taylor for seven years he brought the town out of overdrawn accounts to being $5 million in the black.
“According to the investigators, not one single penny of this money went to my dad. A very deceptive woman, with a lifelong history of financial fraudulence, came to my dad posing as an innocent person needing help. Somehow she figured out that he was in control of a large amount of money. She gained his complete confidence. She borrowed money on a loan basis and committed to pay it back, with interest,” Palmer explained.
He also claims his mother had no knowledge of what had transpired until the rest of the family learned of it a couple months ago. Regarding his mother Palmer said, “The allegations against her are completely untrue and very unfair.”
Regarding Rogers, Vice Mayor Palmer called her a “con artist, a skillful liar and an aggressive manipulator.”
A call to Palmer’s lawyer for comment on behalf of his client was not received by press time. An effort to contact Margaret Rogers was unable to be located by press time.
