Authorities drop embezzlement case against American Legion ex-official

EL RENO — Frustrated prosecutors have dropped a 2014 embezzlement case against a former American Legion official whose jury trial was to have begun Monday at the Canadian County Courthouse.

David Austin Kellerman, 45, of Mustang, was accused in the dropped felony case of selling loaned World War I and World War II rifles for his own personal profit.

The U.S. Army loans ceremonial rifles to Legion posts across the country. Legion officials are supposed to return the rifles if a post closes. Prosecutors alleged Kellerman sold at least 39 of the rifles in 2010 and 2011 instead of returning them. He denied wrongdoing. Kellerman was the state Legion adjutant from September 2003 to December 2011.

The adjutant is a paid position similar to a chief executive officer of a company. He remained active in Legion operations in 2012 and 2013, serving as an assistant to his successors.

He still faces a separate felony charge in Ottawa County District Court of obtaining property by false pretenses.

Assistant Attorney General Megan Tilly said Monday the embezzlement case had to be dropped because the military never provided the paperwork needed to prove to the jury the ownership of the guns.

She said multiple attempts were made to get the paperwork.

A gun collector testified at a preliminary hearing in 2014 that he paid Kellerman $200 to $250 for each rifle. “He said they came from American Legion posts,” the witness said. “He was disposing of Legion property, and I thought that’s what I was buying.”

More than 20 of the rifles were eventually recovered.

Tilly said those rifles are now with the El Reno Police Department. She said the rifles could be returned to the U.S. Army, if that is what military officials want, or destroyed.

The American Legion is a patriotic and politically powerful veterans organization. National officials took over the Oklahoma operations for nine months in 2014 after discovering as much as $1 million was missing.

The national officials ousted or fired all the state Legion officials.

Kellerman was identified in court records as the chief suspect in the missing funds. Prosecutors had planned to file another embezzlement case against him over those funds.

Prosecutors put those plans on hold last year after discovering the state investigator who had spent months gathering evidence against Kellerman was himself a fraud.

The former investigator for the state Veterans Affairs Department is awaiting sentencing for faking his credentials.

Prosecutors also had to drop a drug charge filed against Kellerman after methamphetamine was found inside his home because the phony investigator had prepared the search warrant request.

Prosecutors had to turn to another investigator to regather evidence against Kellerman.

That work has resulted in one new charge so far — the obtaining property by false pretenses case. Prosecutors filed that case in January

Kellerman is accused of selling property in Fairland in 2013 for $4,650 after the Legion post there closed and keeping the money for himself. He was not authorized at the time to be involved in any such sale, prosecutors allege.

Kellerman is contesting the new case, too.

Prosecutors did not give any timetable for when further charges might be filed.