UPDATE: Criminal probe opened into veterans’ agency mismanagement

Prosecutors have opened an investigation into possible criminal wrongdoing at the Indiana Department of Veterans' Affairs, months after it was revealed that some of the agency's employees were awarded grants intended for struggling veterans.

The office of Marion County Prosecutor Terry Curry confirmed Tuesday that it had launched an investigation of the agency to determine if any laws were broken, The Indianapolis Star reported .

Indiana's inspector general earlier found mismanagement at the agency but that there wasn't sufficient evidence to warrant charges.

The probe by Curry's office is a surprise because Torres suggested in a report last month that prosecutors had reviewed her office's investigation and agreed with her assessment that there wasn't sufficient evidence to warrant criminal charges.

However, Curry's chief of staff, Peg McLeish, said that while the prosecutor's office had informal conversations with an investigator from the inspector general's office, it did not see the final report or case file until it was made public last month.

"We did not formally decline prosecution and have opened an investigation into the matter," she said. "The only thing we had before this report was very informal conversations."

Stephanie McFarland, a spokeswoman for the inspector general's office, defended the report's assertion that prosecutors found insufficient evidence to support charges. She said "that was the viewpoint expressed to the OIG agent at the time this specific finding was presented."

"The prosecutor, however, is always free to reevaluate," McFarland said.

The Department of Veterans' Affairs' leader, James Brown, resigned in December after media outlets questioned its administration of the Military Family Relief Fund, which is supported by fees from specialty veteran license plates. Brown denied wrongdoing.

Three other top agency employees—Deputy Director Matthew Vincent, Communications Director Adryanne Bonner and Director of Employment and Veteran Outreach Jeff Wirt—have either resigned or announced that they soon will.

Vincent, Bonner and Wirt either approved or received grants or welfare benefits administered by the agency. Their resignations are part of a reorganization led by the agency's new director, Dennis Wimer, who has pledged to restore confidence.

The Indianapolis Star reported earlier this year that middle-income employees at the agency had an inside track on the emergency assistance grants. The newspaper's investigation and a subsequent state audit also found that the program was poorly managed, with some applications languishing for months while others were processed even though they were incomplete.

A new state law that takes effect July 1 will end the agency's ability to award its own employees grants from the Military Family Relief Fund. Under that law, department employees can still receive money from the fund, but only with the approval of the Indiana Veterans Affairs Commission.