A Killeen man was arraigned Wednesday on a felony charge after allegedly stealing more than $2.2 million from a local business, according to an arrest affidavit.

Hubert Norman Kott, 66, was arraigned by Justice of the Peace Bill Cooke on a charge of theft in an amount of $200,000 or more after an investigation revealed he stole more than $2.2 million from the 195 Lumber Company in Killeen dating back to 2009, according to a police report. If convicted of the first-degree felony, Kott could face up to life in prison and be ordered to pay a fine up to $10,000.

The owner told police Kott had been the chief financial officer at 195 Lumber for 19 years, which put him in control of money flowing into the business and gave him access to the company’s accounts receivable, inventory, computer records system and authorized him to perform daily bank deposits. Last year, the report stated, the owner hired an accountant who soon uncovered account discrepancies within the business that “involved large amounts of money being stolen and covered up in the computer record keeping.”

According to the report, the accountant investigated the discrepancies finding a systematic theft involving accounts receivable, daily cash intake, deposits and the way finances were being reported.

“(The accountant) conducted an audit of the finances of 195 Lumber and found numerous instances where outside businesses that owed money for merchandise purchased at 195 Lumber would pay on their accounts with a check,” according to the affidavit. “(Kott) would receive the check, credit the accounts of the customers and then put the check in the daily point of sale funds. (Kott) would then take out a corresponding amount of cash from the daily point of sale so the remaining money with the check would balance the daily point of sale funds.”

The accountant found the thefts were happening on a weekly basis, according to police. Kott allegedly stole more than $200,000 in 2013, and the ongoing investigation revealed he had stolen more than $2.2 million dating back to 2009.

When Kott was confronted by the accountant about the discrepancies, he told her she “was looking into things too much and then left the company,” the arrest affidavit stated.

The accountant then contacted the software company that manages accounts for 195 Lumber and learned Kott also contacted them and requested they delete records spanning from 2005 to 2010.

Cooke set Kott’s bond at $1 million. He was in custody in Bell County Jail late Wednesday, according to jail records.

Contact Natalie Stewart at nstewart@kdhnews.com or 254-501-7555

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