Wednesday, December 25, 2013

UVM employee accused of embezzlement

A former University of Vermont employee who worked with campus police on criminal investigations was charged Tuesday with embezzlement from UVM.

Daniel S. Austin, 47, of Jericho is charged with stealing $9,860 from inactive accounts in the UVM Cat Card system. The debit-like cards track information including purchases, meal plans, building access and discounted services at some locations.

UVM police said they identified 68 victims and 348 transactions from October 2012 until July.

Austin, who was hired in 2006, was a senior equipment technician for the Cat Card office but is no longer employed at UVM, spokesman Enrique Corredera said Tuesday evening.

Austin was trained to run reports and to locate dormant accounts each year for the Cat Card system, which also provides services to Champlain and St. Michael’s colleges and to Norwich University, the police said.

UVM police said nothing about the embezzlement complaint in July or when investigators cited Austin Sept. 29 and ordered him to appear in criminal court.

UVM police issued a brief news release Tuesday, the day of his arraignment, after court had closed for the day stating that Austin was arraigned.

Austin told the Burlington Free Press in a phone interview Tuesday night that he hopes to work out a resolution in the case. He said he pleaded not guilty to the charge in Vermont Superior Court, was appointed a public defender to represent him and was released on conditions.

Corredera later released a four-page affidavit from investigating officer Bill Sioss.

“I have worked with Austin many times over my career, often times he assisted the UVM Police in obtaining information relative to ongoing criminal investigations,” Sioss wrote in a sworn affidavit.

The Cat Card office also is responsible for maintaining most surveillance cameras on the UVM campus, Sioss stated.

UVM police said workers at the Maplefields store on Williston Road in South Burlington became concerned in July about suspicious transactions, including whether lottery purchases were authorized under the program.
The Cat Card office later called UVM police, and a full investigation began.

When a student, faculty or staff member is no longer affiliated with UVM or one of the other institutions served by the Cat Card due to retirement, graduation or resignation, the card becomes inactive, Sioss stated.

Each year, UVM then attempts to refund the money remaining on the card, minus a $10 processing fee, police said.

Austin would run reports in the Cat Card office looking for inactive accounts with a balance, Sioss stated. He also had the ability to delete those with a balance.

Sioss stated Maplefields was aware of five transactions from July 1-21 that totaled $960, and the store provided video surveillance for four of the case. The video showed Austin making the transactions, but the purchases showed up on inactive accounts, police said.

Investigators learned that Austin had the ability to change his own account to any of the dormant accounts to allow him to make purchases with the unused funds, Sioss stated.

Corredera, the UVM spokesman, said the university decided that it would make refunds to the victims. He said most were associated with UVM at one time, but others were at Champlain College.

“We decided to make all the people whole. UVM will issue checks,” he said. “Obviously we have taken steps to tighten up the system in an effort to make it unlikely to happen in the future.”

A former University of Vermont employee has agreed to plead guilty to a federal charge of embezzlement — a case that began, officials said, with the receipt 18 months ago of an anonymous letter.

Jody Farnham, a UVM employee who provided administrative support to the Vermont Institute for Artisan Cheese, embezzled at least $185,000 during a six-year period ending in late 2012, according to a charging document on file at U.S. District Court in Burlington. She is accused of having done so by altering tuition checks from enrollees in the cheesemaking program to make herself a co-payee, the document alleges, and then depositing the checks in her own bank account.

Farnham also is accused of embezzling cash tuition payments given to her by enrollees and of using UVM credit cards to make personal purchases. This is the latest in a series of embezzlement cases to emerge in Vermont public institutions during the past several years.

In an agreement signed Nov. 25, 2013, and filed in court this week, Farnham agreed to plead guilty to the allegations. The charging document, dated Sunday, includes a forfeiture notice, under which Farnham, if convicted, would have to pay back $185,000. Asked about the lag between the plea agreement’s signing and the Monday court filing, Assistant U.S. Attorney Gregory Waples declined comment.

A listed phone number for Farnham could not be found Wednesday. A phone message and an email to her attorney, Robert Hemley, were not returned.

The Vermont Institute for Artisan Cheese provided educational, research and consulting assistance to cheesemakers and offered courses and workshops in artisan cheesemaking, according to the charging document. Farnham was employed by UVM’s College of Agriculture and Life Sciences as an office program support specialist. Her annual salary in 2011-12 was $30,649, according to UVM’s website.

Farnham was co-author with Marc Druart of “The Joy of Cheesemaking: The Ultimate Guide to Understanding, Making and Eating Fine Cheese” (Sky Horse Publishing, 2011). The book jacket identifies her as the program coordinator and administrative director for the Vermont Institute for Artisan Cheese, and Druart as the institute’s master cheesemaker.

Tom Vogelmann, dean of the College of Agriculture and Life Sciences, said he received an anonymous letter July 17, 2012, “alleging redirection” of registration funds for the institute’s workshops.

“We started an investigation of the finances at that time,” Vogelmann said. Records were turned over to UVM auditors, who eventually called in UVM police to investigate, he said.

Farnham resigned Jan. 28, 2013, effective Feb. 15, 2013, according to Enrique Corredera, university spokesman. The FBI assigned an agent to the case July 19, 2013.

Institute losses
The institute stopped offering regular workshops in May 2013. According to the institute’s page on the UVM website, the need for the workshops diminished as cheesemaking expertise grew in Vermont. The page states that the workshops had been partially paid for by federal earmark money — dollars that eventually ran out. Tuition fees were the other main source of workshop funding.

Vogelmann said the institute’s finances fluctuated during the past six or seven years — sometimes running in the black, and sometimes significantly in the red.

The institute’s losses rose to $243,343, according to Corredera.

Vogelmann attributed recent losses to a drop in the demand for workshops, and he pointed out the institute ran up a shortfall of about $50,000 after the alleged embezzlement had ended. In lieu of workshops, he said, the institute is focusing on consulting and research, with particular interest in issues of food safety.

He said the workshop program served its purpose as an economic-development program in the years after the institute was founded in 2004, with the result that artisan cheese comprises a strong industry in Vermont, “something we can all be proud of.”

Asked why the embezzlement, which the authorities say spanned six years, wasn’t detected sooner, Corredera replied via email: “Part of UVM’s mission is to foster economic development. Such activity often requires subsidizing programs that lose money but which will lead to economic growth. That was the case with VIAC.” He added that the institute’s fluctuating proceeds and the absence of a steady revenue stream made it difficult to notice an anomaly.

Farnham, 54, began working for UVM in July 2003.

Conviction on the federal charge of embezzlement, a felony, can draw a prison term of up to 10 years and a fine of $250,000.

In the plea agreement, federal prosecutors pledged to recommend a sentence at the low end of the sentencing guidelines range and reiterated that the U.S. is entitled to a forfeiture of $185,000.

Federal prosecutors had jurisdiction because UVM received federal benefits amounting to more than $10,000 during the six-year period.

The case has been assigned to Chief U.S. District Judge Christina Reiss. A hearing regarding the plea agreement is yet to be scheduled.

'Deeply disappointed'
This was the second case of alleged embezzlement at UVM to emerge in the past two months. In December, a former employee of UVM’s Cat Card office was charged with having stolen $9,860 from inactive accounts. Daniel S. Austin told the Free Press he had pleaded not guilty and hoped to work out a resolution of the case.

Corredera also issued the following statement by email Wednesday:

“We are deeply disappointed that our trust was so fundamentally violated, but at the same time we are confident that we are doing all we can to reduce embezzlement risk to a minimum. We are implementing a centralized online registration system for non-credit courses to address this area of vulnerability.

“Additionally,” Corredera continued, “the College of Agriculture and Life Sciences is taking all the necessary steps to strengthen its system of checks and balances across all its operations. Ultimately, this is about risk management, not risk elimination. Our people are our most valuable resource, and we consider this to be a rare case.”

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