No refund for KACo

BANK SAYS STRIP-CLUB, ESCORT CHARGES WILL STAND

ralessi@herald-leader.comJuly 14, 2009 

The Kentucky Association of Counties will not get a refund for $890 in payments to two strip clubs and a Lexington escort service that were billed on two KACo credit cards.

Central Bank & Trust Co., KACo's credit-card issuer, said it did not determine who made the charges in January and February 2008 on the account of its then-president, Spencer County Judge-Executive David Jenkins. Jenkins' credit card was used to charge $445 at two Louisville strip clubs and $175 to Calypso Enterprises, which is the billing name for a Lexington escort service, Campus Cuties.

Another charge of $270 made to Calypso Enterprises on May 16, 2007, showed up on the credit card statement of KACo Executive Director Bob Arnold.

The association disputed the charges after the Herald-Leader reported them in an article on the group's expenses.

"We cannot determine whether the charge was authorized," said the letter to KACo from Beverly Smalley, Central Bank's assistant vice president of the card services department, regarding the charge on Arnold's card. "According to the transaction history, the one charge for Calypso Enterprises, LLC is coded as a dating/escort service, but the card was not presented to the merchant when the charge was incurred. It would therefore be nearly impossible to determine who actually authorized or incurred the service."

Smalley's letter did not give any specifics about what the bank did to determine whether the charges on Jenkins card were legitimate. However, she said the bank would not refund them for two reasons. First, KACo didn't notify Central Bank within 60 days of receiving the bill, as required. And, secondly, any organization that has 10 or more credit cards through the bank, as KACo does, "is liable for any and all unauthorized use of the card."

KACo President J. Michael Foster, the Christian County Attorney, said he's not satisfied with the bank's response and wants answers about who made the charges to the strip clubs and escort service.

"We want to use every resource available to investigate these things as much as humanly possible," he said. "It's only fair to the organization and to Mr. Jenkins or anybody else who allegedly made those charges."

Foster said he's "thinking about using a special counsel" to investigate those charges on behalf of the KACo executive committee, which is made up of five elected local officials.

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