A dark cloud
Some citizens say it's hard to believe; others are 'angry'
Some Marble City citizens say it's hard to believe; others are 'angry'

MARBLE CITY — In this impoverished Sequoyah County town, where 90 percent of the schoolchildren qualify for free or reduced-price lunches, Larry Couch's alleged bank transactions seem almost otherworldly.

Couch, who worked for the Marble City School for 25 years, mostly as its principal and superintendent, faces state charges of embezzling $100,000 in school funds.

That amount barely scratches the surface, a federal court document alleges.

An FBI agent's affidavit says Couch spent about $950,000 in a little less than 10 years on personal expenses, including his cattle operations and his wife's Sallisaw nursery.

Still, many in the small, rural community support the man who was superintendent for the kindergarten-through-eighth-grade school for 15 years.

Some say if he was stealing money, the school did not suffer during his tenure.

Federal prosecutors await the completion of an ongoing state audit of the school before filing charges based on evidence seized in January.

Couch lost his teaching certificate in November and has attempted in vain to make a settlement with the school.

Acting as treasurer in 1992 of the Organization of Rural Elementary Schools, a group that lobbies on behalf of dependent schools, Couch opened a bank account with the organization's president, Bill Horton of the Moffet School District, the affidavit states.

The affidavit explains that in 1998, the organization changed leadership, but the account, which was opened at a bank in Couch's hometown of Vian, remained open. He wrote a check for more than $50,000 to an account opened by the organization's new leadership, leaving behind almost $5,000.

Couch then added to the amount with school funds, the affidavit alleges.

"After May 1998, this account was used by Couch in a scheme to deposit funds from Marble City School,” the affidavit states. The document accuses Couch of using school money to support his ranching operations and his wife's florist company, The Green House, in Sallisaw.

From this account, Couch routinely wrote checks payable to credit card companies to pay his personal expenses, the affidavit states. It also accuses him of issuing checks payable to people who sold him property.

The investigation shows from 2002 through 2007, the school received $1.4 million in federal Impact Aid money, which provides assistance to local school districts with concentrations of children residing on Indian lands, military bases, low-rent housing properties, or other federal properties.

It also shows that between 1999 and 2007, Couch made more than $850,000 in deposits into the rural school organization account that he kept open. An FBI agent reported that Couch withdrew more than $869,000 from the account during the same period.

In all, investigators think Couch deposited into the account more than $791,000 from Marble City School warrants, about $109,000 from the Cherokee Nation and more than $47,000 from various other sources.

Investigators concluded Couch used numerous schemes to defraud the school district, including fictitious payments and funneling money into the bogus account.

Financial records from Couch Auto Sales, Couch Limousin Farm, C&A Auto Sales, Couch Body Shop, Couch Body Shop and Auto Sales, Couch Body Shop and Salvage, and Couch Cattle Company were investigated.

The investigation found payment vouchers for more than $300,000 to S&S Truck & Bus Sales from 1998 through 2003 that were neither owed nor received by the company's owner, FBI agent Christopher Headrick alleged.

"Couch then diverted the funds for real estate land payments,” Headrick's affidavit states.

Sequoyah County land records show Couch and his wife purchased property in April 2000 for $150,000.

In another land transaction in March 2006, Couch transferred $100,000 in federal funds to a school account and then used the school account to purchase land, Headrick wrote. County records show the purchase price was $250,000, according to the affidavit.

Couch's modest brick home with its green roof sits off a dirt road near Vian, surrounded by acres of farmland as far as the eye can see. With its three large barns and storage building, it is surrounded by white pipe fence and a locked gate.

His closest neighbor, Norman Spurlin, lives about a quarter-mile down a dirt road. Neighbors for 30 years, Spurlin said he was surprised by the allegations.

"I tried to buy 90 acres close to my land, but he (Couch) bought it,” Spurlin said.

The state Board of Education voted to revoke Couch's teaching certificate in November after hearing testimony that he falsified forms submitted in the school's request for state aid.

The board found Couch sent two expelled students to a church-run school with no certified teachers while continuing to claim them as students at his school.

The board also found Couch counted students who were too young to legally enroll in the school's early childhood program and counted students who spoke primarily English as bilingual, both of which resulted in more funding. He also was accused of misreporting the number of developmentally disabled children to gain extra state money.

The Marble City school board voted in November to suspend Couch without pay. Couch is fighting to regain his salary. His lawyer argues that Couch is under contract.

Marble City School has 169 students enrolled in kindergarten through the eighth grade. Of those students, 150 are eligible for free or reduced lunches. The 2000 census showed the median household income for Marble City was $17,375, less than half the national household income of $41,994.

The community of 200 has five churches, several abandoned buildings and virtually no traffic. The last convenience store shut down about six months ago. All that's left is the town hall building where clerk Lola Hill works two days a week.

Most folks in the lime and marble mining town had only good things to say about Couch. They pointed to the new gymnasium, for example. Some found the allegations difficult to believe, while others voiced concern.

"I am angry just like the majority of the parents are,” Sharlinda Busch said.

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