A malicious prosecution lawsuit by a woman accused of misappropriating flood relief donations should be dropped, according to the recommendation of a federal magistrate reviewing the case.

Denise Mathis, former director of the Haywood County Council on Aging, claims she was wrongly accused of mismanaging the finances of her former agency. Mathis lost her job and was charged with 14 counts of embezzlement in 2006 for allegedly misappropriating $100,000 in flood relief donations — one piece out of the hundreds of thousands of dollars that poured into the county in the wake of massive flooding along the Pigeon River that wiped out dozens of homes and businesses in 2004.

In an attempt to clear her name, Mathis sued District Attorney Mike Bonfoey and Waynesville Detective Tyler Trantham for malicious prosecution and accused them of inadequately investigating her case. She also sued them for conspiracy and making false public statements.

But the federal magistrate found no evidence that Bonfoey or Trantham set out to malign Mathis. They were acting in their official capacity as a prosecutor and police detective and cannot be sued simply because the target of an investigation doesn’t like the outcome.

“To do so would subject every prosecutorial decision, every investigation that leads to charges, and every decision of a grand jury to be second guessed by a federal court,” Magistrate Dennis Howell wrote in his recommendation.

Whether the case is indeed dropped will be up to a federal judge, who will presumably take the magistrate’s recommendation into account.

“The Magistrate’s ruling confirms the town’s strongly held belief that Officer Trantham acted professionally in all respects and that absolutely no wrongful acts were committed by him or town employees,” Waynesville Mayor Gavin Brown said.

The embezzlement charges against Mathis were ultimately dropped. While the $100,000 in question did not make it into the hands of flood victims as donors intended, it likewise didn’t go into Mathis’ pocket, a police detective and financial investigator determined. It was used to cover salaries and overhead of the nonprofit agency — and it therefore would be hard to make the embezzlement charges stick in court, Bonfoey said of his decision to drop the charges.