DA speaks on assistant treasurer accused in credit card scheme to pay blackmailing dominatrix

HARRIS COUNTY, Texas – Harris County District Attorney Kim Ogg responded Tuesday to earlier reports that contradicted her comments last week about taxpayer money being used to pay off a woman who was blackmailing an assistant treasurer.

WATCH: Harris County DA Kim Ogg responds to reports of fraud at treasury department

"This is public corruption simply because of the access and stature that Mr. (Gregory) Lueb held in county government," Ogg said. "And while we haven't discovered county funds missing, I think the obvious inference is that in an ongoing investigation, right now we have more questions than we have answers."

Harris County Treasurer Orlando Sanchez said earlier Tuesday that no taxpayer money was used after the first assistant treasurer was accused last week of stealing more than $35,000 from a credit union to pay off a dominatrix who was blackmailing him.

Sanchez also said he would have preferred if Ogg would have contacted him at the time of the discovery, instead of months later.

Ogg said the investigation is ongoing.

"The treasurer is responsible for all county funds, both receiving and spending them, and Harris County has been the subject of fraud. Those frauds involved an $800,000 transaction earlier in the summer and Mr. Lueb came to our attention because money in the crime victims restitution account was being moved around without our authorization," Ogg said.

Gregory Lueb, 56, is charged with aggregate theft of up to $30,000. He made his initial court appearance early Friday and bonded out of jail hours later.

According to court records, Lueb opened a credit line of $10,000 at the Harris County Federal Credit Union and began making cash advances against the credit line. Lueb then used fraudulent transactions to make payments on the credit account, according to the records. Before the payments were returned, however, the corresponding amount was made available on the credit account, allowing Lueb to make even more cash advances on the credit line, according to the records.

All of the cash advances were made between September and November of 2016, according to court records. With interest and fees, a total of $42,183.82 was owed on the account, according to the records.

Lueb was back in court Monday.

Sanchez said he was informed of the charges Wednesday by Harris County District Attorney Kim Ogg. Lueb was fired within an hour of Sanchez learning about the investigation into Lueb's personal finances, Sanchez said.

"What I know is that Mr. Leub had access, he had acumen and he had the desire to steal," Ogg said.

Sanchez insisted no public money was taken by Lueb. 

While Lueb had access to all the bank accounts in every department, Sanchez maintains multiple signatures are required to transfer money.

“Different levels of signatures, there are internal controls and checks and balances involved that not one person in this county can move money individually,” Sanchez said.

The charge against Lueb is credit card fraud, and there is no evidence of theft of public funds.

VIDEO: Harris County treasurer says no county funds used in blackmail scheme

"To this date, there is no indication that county money was involved," Sanchez said. "We've even expanded the amount of audits to make sure."

He also refuted Ogg's original statement that Lueb had access and the ability to move millions of dollars of taxpayer funds.

"It is time for the district attorney to stop scaring taxpayers that their money was ever in jeopardy at this office. It is time for the media to start asking why this investigation went on for months without a warning to the elected county treasurer, so I could fulfill my No. 1 obligation: protecting your money," Sanchez said.

Sanchez said he wished Ogg would've informed him months ago about the investigation, so he could've taken action.

"It would've been nice if the district attorney would've picked up the telephone and said, 'Listen, we have a public charge here -- I can't divulge a lot of information, but it's come to my attention that one your employees is being questioned by the sheriff, by our office, on a complaint filed by an external banking institution,'" he said. "I would've suspended his access to all accounts and possibly terminated him then."

Sanchez said he will detail the safeguards in place to ensure the safety of taxpayer money.