The third-ranking official in the Governor’s Highway Safety Office has resigned following allegations that she funneled $22,000 into a fake company for personal use.

Elizabeth Hosmer, a finance and marketing administrator with oversight of 350 grants and other contracts, stepped down May 6 after being told she was the subject of a criminal investigation by the Tennessee Bureau of Investigation, according to documents released to The Tennessean by the Department of Transportation.

Hosmer has been accused of steering funds into a fake company called Infinity Promotions over a seven-month period that ended in December 2009, said Lyndsay Botts, a TDOT spokeswoman.

Hosmer declined to comment. She resigned two days after Transportation officials were told of the TBI investigation, Botts said.

“On May 4, 2011, Ms. Hosmer admitted to me that she misused her position … to falsify documents, invoices, and/or other information in order to misappropriate approximately $22,000 from the GHSO’s budget,” Kendell Poole, director of the safety office, said in a May 9 letter to Commissioner John Schroer.

State Sen. Jim Tracy, R-Shelbyville and chairman of the Senate Transportation Committee, said he plans to speak with Schroer about whether purchasing rules should be tightened.

“It’s very disappointing anytime there’s something like this, a misusing of taxpayer money,” Tracy said. “Hopefully, appropriate actions have been taken.”

The TBI opened the inquiry after receiving a tip from an informant on March 22, said Kristin Helm, a TBI spokeswoman.

The investigation was formally requested by Davidson County District Attorney General Torry Johnson, who will have the option of pursuing criminal charges after its completion, Helm said.

The state comptroller has also been asked to audit the safety office to determine whether additional funds were misdirected. The investigation will remain open until the bureau receives that audit, but the bureau does not suspect anyone else in the office of wrongdoing.

“The allegations and information that we received lead us to believe just one person was involved in

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