KINDERHOOK–Following the recent sentencing of Pegeen Mulligan-Moore, former bookkeeper to the towns of Kinderhook and Greenport, who pleaded guilty to 20 charges associated with swiping nearly a half million dollars total from those towns, Kinderhook Supervisor Patrick Grattan has released details of the case.
Ms. Mulligan-Moore, 42, of Valatie will spend three to nine years in state prison for her crimes, 18 felonies and 2 misdemeanors, the most serious of which are two counts of second and two counts of third degree grand larceny, class C and D felonies. She must also pay restitution to the two towns to the tune of $556,470.86, an amount that includes additional expenses incurred by the towns as a result of the thefts and court administrative fees.
The sentencing brings to a close the case that involved an 18-month investigation into the theft of $430,000 from Kinderhook, where Ms. Mulligan-Moore served as bookkeeper for nearly 10 years. The thefts began 5 years ago, according to Mr. Grattan.
In Greenport, she stole about $50,000 in the first six months of 2010.
Of the money taken from Kinderhook coffers, $366,812.87 went to pay for charges to her credit card, such as “restaurant meals, clothes, gifts, gasoline, fuel oil for her home, pet and pool supplies and a multitude of other items,” Mr. Grattan said in his release.
The remaining $64,000 was taken via vouchers, some of them falsified, to pay for her health insurance, pre-paid phone cards, computers and supplies, unauthorized salary and unjustified claims, according to a list compiled by Mr. Grattan.
In the days after taking office in January 2010, the supervisor discovered that the town had $154.69 in its checking account. He also received numerous telephone calls from creditors demanding payment of long-overdue bills. The health insurance premium for the town employees had not been paid, more than $140,000 was owed to suppliers of highway materials and bills for telephone and electric service were not paid, among others amounting to nearly $400,000 in unpaid bills.
Mr. Grattan also discovered monthly electronic transfers to American Express.
When questioned, Ms. Mulligan-Moore told him that the town had an American Express credit card, but she claimed she had destroyed the card and closed the account. She would not divulge the account number or identifying password.
Mr. Grattan was also unable to get American Express to provide any information about the card.
The State Police investigation revealed that the credit card in question was Ms. Mulligan-Moore’s personal card.
In her efforts to cover up her thefts, Ms. Mulligan-Moore created a fictional account containing $136,371 on a 2008 report submitted to the Comptroller’s Office. This false entry gave the illusion that the town had cash on hand. In the same report, the bookkeeper indicated that $400,000 was due to the town for the same year when, in fact, the money did not exist, according to Mr. Grattan, who also said $145,000 worth of checks were written to pay town bills in October, November and December 2009, some of which were returned in January and February for insufficient funds.
“It was only through the assistance of the Kinderhook Bank that the town was able to stop the trickle of checks being returned,” he said.
After reporting his suspicions to the Office of the State Comptroller, two investigators — Joseph Fiore and Francis X. Smith– arrived and worked for many months investigating the theft. At the same time, the town hired A. Michael Bucci, CPA of Pattison, Koskey, Howe and Bucci, an accounting firm in Hudson who, along with Lisa Gill, also an accountant, assisted with the investigation and now continue to reconcile the town’s books monthly.
The theft of money and the co-mingling of funds from different parts of the budget also affected on-time disbursement of funds to the Valatie Rescue Squad, the libraries and fire protection districts in January and February 2009. A few of those entities were paid three to five months later; the rescue squad was not paid until September 2009.
“This practice hurt our emergency services and our libraries: when they did not receive the payments from the town, they struggled to pay their bills. We all rely on our emergency services but, given the theft, they were forced to wait for months for money that should have been paid soon after it was collected,” Mr. Grattan said. In the case of the Chatham Fire Protection District, the $10,297 due in February 2009 was not paid until 2010.
Consequences to the town included incurring needless fees and interest to pay for costly borrowing in 2008; roads went unpaved; buildings were not maintained and repaired and much-needed highway equipment was not purchased, Mr. Grattan said.
In response to a statement on the case written by the state Comptroller’s Office, Kinderhook Councilman Peter Bujanow wrote in an email that he agreed with the comptroller’s assessment that “proper safeguards have to be in place to protect taxpayers,” intimating better controls might have prevented the fraud in Kinderhook.
But, Mr. Bujanow pointed out that when suspicious activity was first discovered in 2008, at least one Town Board member advocated hiring a CPA to conduct an audit. “When an audit was performed in 2008, the accountant/auditor concluded there was nothing suspicious and even recommended obtaining a town credit card, which turned out to be the primary vehicle in perpetrating this fraud,” wrote Mr. Bujanow, noting that none of that information in the public record was ever mentioned by any state comptroller report or press release that he had read.
Kinderhook has received a check from its insurer for $300,000.
The amount stolen plus legal costs and accounting fees is $450,935.62, the amount of restitution payable to Kinderhook. Whether the town will recover the amount stolen, remains to be seen.
The town has commenced a civil suit against Ms. Mulligan-Moore for the amount due and the town is pursuing every means of recovering the amount taken and the costs of the investigation.
Mr. Grattan thanked all who had a part in the investigation.