Investigators suspect some of the hundreds of thousands of dollars embezzled from the American Legion operations in Oklahoma went to buy drugs, records show.
Investigators last week reported finding baggies of crystal methamphetamine and a glass pipe when they searched the Mustang home of the chief suspect, former Legion adjutant David Austin Kellerman.
Kellerman, 43, was arrested and charged with methamphatamine possession, a felony, the same day.
In their request for a search warrant, investigators revealed they had followed Kellerman for a couple of months last fall.
Kellerman has been under state and federal investigation since Aug. 28 “in reference to embezzling of money, theft of rifles and other various criminal acts,” the court records show.
Kellerman was observed “on several occasions” driving to a hotel in Yukon and visiting with a woman who has a long history of drug possession and manufacturing, an Oklahoma Veteran Affairs Department special agent, Steven Pancoast, wrote in a search warrant affidavit.
The woman — identified as Tamara Brown — was later questioned about those visits. Brown, 50, spent time in prison and is now on probation until 2023 for a methamphetamine manufacturing conviction, prison records show.
“During the interview, Tammy admitted that she would supply Kellerman with a couple of grams of meth a day,” Pancoast wrote. “Tammy stated that Kellerman would even purchase meth twice a day from her. Tammy also stated that Kellerman showed her pictures that he had on his phone of underage Mexican girls having sex with animals.”
Kellerman was the state adjutant from September 2003 to December 2011, court records show. The paid position has been described as similar to a chief executive officer of a company.
He remained active in the Legion in 2012 and 2013, serving as a voluntary and unpaid assistant to his successors.
No one has been charged yet over the missing funds.
National officials of the well-known veterans organization voted to take over the Oklahoma operations in March because of the embezzlement. The national officials ousted or fired all the state Legion officials.
National officials have estimated the financial losses in Oklahoma could be as much as $500,000 to $1 million.
Kellerman does face a felony charge over rifles that disappeared after Legion posts were closed.
He was charged in January with taking ceremonial World War I and World War II rifles from Legion posts and selling them.
Before the search last week, his defense attorneys repeatedly said that Kellerman did nothing wrong. After the search, his current attorney, Scott Adams, twice declined to comment.
Kellerman was caught two times with marijuana after traffic stops in 2012, court records show. He was put on probation both times.
Investigators reported seizing 76 items — including cellphones — during the search last Tuesday. Agents plan to review the cellphones for evidence of child pornography.
Investigators found that Kellerman had an American Legion debit card years after retiring as the adjutant in December 2011. He also still had access to the Legion bank account at Chase Bank.
From Aug. 5 to Aug. 30, Kellerman used the Legion debit card 113 times for his own personal gain, spending $15,473 in Legion funds, Special Agent Pancoast reported in the search warrant affidavit.
The next month, Kellerman used the card to spend $11,739 in Legion funds for his own personal gain, Pancoast wrote.
During the physical surveillance last fall, investigators observed Kellerman withdrawing money from the Legion’s bank account at Chase Bank in Yukon, according to the affidavit.
Kellerman made 56 unauthorized withdrawals from the Legion account at Chase Bank, totaling $31,140, Pancoast wrote.
Investigators report they also have evidence Kellerman paid his wife and daughter for housekeeping and clerical work at Legion headquarters that they never performed.
Investigators report he would write checks while adjutant from Legion accounts to relatives and friends, disguising them as for temporary financial assistance to veterans. Investigators report he then would have the recipients cash the checks, keep a little of the money and give the rest to him.
In one such transaction described in the search warrant affidavit, Kellerman in 2010 wrote a $3,000 check to a brother-in-law and got back $2,400.
The investigators report he also would close Legion posts across the state because of “inactivity,” then collect all the money from those posts’ bank accounts and utility deposits and “place the money in his personal bank account.”
Last year, he sold a vacant Legion post in Fairland for $4,650 and kept the money himself, according to records and witnesses.
Kellerman once served as commander of the Legion post in El Reno. Investigators report he allowed illegal slot machines to be placed there for a payment of $500 a week.
Investigators also are looking at whether other employees misused Legion funds. There are records, for instance, that a former bookkeeper may have used Legion funds to pay her divorce attorney $8,000.
Prosecutors had planned to file charges in May over the missing funds. The investigation has grown, though, and charges now are likely in July.
Kellerman and his wife, Lisa, filed a bankruptcy petition May 30, seeking relief from some of their debts.
They reported having $275,900 in assets, mostly from their residence. They reported having $397,946 in liabilities.
David Kellerman reported in the bankruptcy petition that he is unemployed. He reported getting $3,134 a month in government assistance because he is a disabled veteran.