City: Ex-CFO Hudson embezzled $764,000; KSP criminal investigation is next step

Nelson County Gazette / WBRT Radio

Tuesday, Feb. 11, 2020 (Updated Feb. 12, 2020, 4:30 pm) — The City of Bardstown has completed its internal investigation and audit of its financial records and determined that former city Chief Financial Officer Tracy Hudson is believed to have embezzled approximately $764,000 from the city’s coffers.

Tracy Hudson is alleged to have embezzled $764,000 between April 2013 and September 2019.

According to Mayor Dick Heaton, the alleged embezellment began in April 2013 and continued through Sept. 18, 2019.

The city has recovered $134,000, which Hudson returned to the city through her attorney not long after she was suspended from her CFO duties.

Heaton said the next phase will be an investigation by the Kentucky State Police. The city has turned over its findings to KSP for their criminal investigation.

The city will monitor the KSP’s investigation, and will determine at a later date the steps it can take in order to recover the remainder of the missing funds.

Without offering specifics, City Attorney Audrey Haydon said Tuesday night that the city will likely pursue a claim on the former CFO’s bond, which she likened to an insurance policy.

The executive city staff employees — which includes the CFO — have $1 million bonds

Hudson was formerly the assistant to the city Chief Financial Officer Mike Abel. When Abel retired at the end of March 2015, then-Mayor John Royalty named her as the new CFO in April 2015.


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