OKLAHOMA CITY — A former auditor for the Commissioners of the Land Office has been indicted on 174 counts of embezzlement that accuse him of taking more than $1.16 million in royalty payments to the office during the last five years, a state prosecutor said Thursday.
Roger Q. Melson, 55, of Edmond, former director of audit for the Land Office’s royalty audit division, allegedly took the money to feed a gambling habit and was a frequent visitor at Oklahoma City’s Remington Park racetrack and gambling casinos across the state, Assistant Attorney General Joel-lyn McCormick said.
“It sounds as if that is the defense in this case,” McCormick said. “The angle that he’s taken is that he is remorseful, that he has a problem.”
Melson’s defense attorney, Billy Bock, confirmed that Melson has a gambling problem and has sought counseling off and on for the past decade.
“I have a client that has a sickness that needs to be treated,” Bock said.
The charges against Melson are listed in a 124-page indictment that was handed up by a multicounty grand jury on Wednesday and unsealed in Oklahoma County District Court. Bock did not question the embezzlement accusations and said the only reason he would force a trial is if the state sought a significant penalty.
Melson faces between one and 20 years in prison on each count and possible fines and restitution.
“There’s a paper trail to what’s gone on,” Bock said. “It shocks the conscience that it could go on this long and not get caught.”
Bock described Melson as “a very, very good person” who has become active in recovery groups since he left his Land Office job last month after 20 years. Melson, whose Land Office salary was about $67,300 a year, is currently employed as a night stocker for Wal-Mart, Bock said.
“He knows what he did was wrong. He is very remorseful,” Bock said.
District Judge Patricia Parrish set Melson’s bail at $174,000 — $1,000 for each count. Bock said Melson will not be able to post a bail that high.
Melson, who calmly sat and read a book during much of his brief court appearance, did not respond to reporter’s questions as he was led away in handcuffs. Bock argued that Melson’s bail should be no more than $30,000.
“He doesn’t need to be in jail,” Bock said.
The school land office manages public school lands for the benefit of the state’s public schools. Nelson’s job was to make sure oil and gas royalties from mineral leases on public school lands were properly collected.
The office’s $1.5 billion trust fund distributed nearly $73.5 million to educational institutions during the 2008 fiscal year, according to the office’s annual report.
McCormick said the embezzlement came to light in April when a delinquency notice was issued by the Land Office for an overdue royalty payment from an oil and gas producer on public lands. But the producer provided the canceled royalty check it sent to the Land Office, and investigators traced it to a private bank account Melson had opened.
Investigators eventually discovered that Melson had diverted 174 Land Office royalty checks to the private account, a scheme that hurt Oklahoma schools and students, Attorney General Drew Edmondson said.
“Melson was essentially stealing from school children,” Edmondson said. “Instead of this money buying desks and textbooks, Melson used it for his own personal ends. The scope and duration of this fraud is staggering.”
McCormick said the private bank account currently contains only $23,000 and that officials are looking for more.
“Where’s the pot of gold?” she said. “The public school systems in the state of Oklahoma would like to know where the money is.”
Bock said he doubts that Melson has any significant cash assets that the state can recover.
“It’s impossible to account for it all,” he said.
