JEFFERSON CITY, Mo. – A federal grand jury has returned a 38-count indictment against a mid-Missouri woman in a $1.5 million fraud scheme.

Prosecutors have charged Kathryn L. Cunningham, 62, of Rocheport, with 24 counts of bank fraud, four counts of stealing from an organization that receives federal funds, and 10 counts of wire fraud.

Cunningham is the former owner and CEO of Moresource, Inc., in Columbia, which provided payroll services for nearly 141 clients when it closed in June 2020.

The indictment alleges Cunningham embezzled money from the payroll account held in trust for Moresource’s clients. She took her clients’ money for her personal benefit and to fund another company’s operations. Cunningham allegedly embezzled more than $1.54 million worth of payroll deposits from 24 Moresource clients.

Per the indictment, Cunningham used money from Moresource’s operating account for her personal use and borrowed money on multiple occasions from at least two non-bank lenders to cover shortfalls in the client funds in the Moresource payroll account. She also paid the principal and interest on several of those loans from the client funds in Moresource payroll account.

The indictment alleges Cunningham attempted to conceal her embezzlement of client funds by causing Moresource to stop making timely and accurate IRS filings and to stop making regular payments to the IRS for the employment taxes owed by her clients. Cunningham caused documents to be transmitted to her clients that falsely stated all payroll tax obligations had been satisfied.

Cunningham’s arraignment hearing was held Thursday, per court records.