Sunday, February 2, 2014

School board faces questions about principal and money management in Vermont

A few residents attended the Readsboro school board meeting on Monday, hoping to get answers following the arrest of former principal Michael Heller on embezzlement and larceny charges. But there was little the board, WSSU superintendent Richard McClements, and WSSU finance chief Karen Atwood would comment on. Members of both the board and the WSSU expressed concern about jeopardizing any part of the ongoing legal proceedings, or facing legal action should they provide speculative information.

School board chair Larry Hopkins did, however, say that the school would be seeking retribution for the over $4,500 that was misappropriated. “The short answer is yes,” said Hopkins, “but how we’re going to get there I don’t know yet.” Hopkins also said the board has not been informed as to what degree they’ll be involved with the court case.

One resident, Cherrie Giddings, worked on the production of the school play “Yes, Virginia,” for which the school had received a $1,000 grant from Macy’s. “My concern is that I worked on the play, and we received a $1,000 grant,” said Giddings. “A lot of people had to do extra work and use their time and volunteered and donated time because there was no money, yet there was money, but someone else got it.”

“There are a couple other instances where people may have had money come up short,” responded Hopkins. “If we get the money back we’re going to take steps to make sure everyone is taken care of.” Hopkins also said that it was too early to tell whether Macy’s or Lowe’s, which gave the school a $5,000 grant, would seek retribution.

“We have to wait until the investigation and the court play out first,” said board member Dana Rapp. “If there was malfeasance, this board would want nothing more than to balance those accounts.”

Molly Frost asked how the alleged embezzlement went unnoticed. Hopkins said a previous superintendent had advised the principal on how to open a bank account independent of the central office, and over time it lost the oversight of the WSSU. “The two people involved with starting it are not here, and this is how it ended.”

Because of the detailed nature of the investigation, as well as the court case currently in progress against Heller, McClements said that he was told not to expect an expedited court process. “We can’t tell you about these things,” said McClements. “We can’t get into those kinds of discussions. All you need to know is that it was turned over to the police, they’re investigating, and the Agency of Education is also investigating. It will play itself out and I believe there will be justice. I know you want to hear more and I know you want to hear details but we can’t.”

McClements did assure that there would be no more principal-controlled grants or accounts and all grants, invoices, bank statements, and purchase orders will go through the WSSU central office.

As for the $200 in lunch money that Heller is accused of stealing, Hopkins said that he wasn’t sure that the money’s disappearance could be pinned on anybody. Atwood said that after the money started to disappear, steps were taken to deliver the money to the town office sooner.

Atwood also said an audit was not finished on the grants received because they could not find evidence of the grant revenue being received.

“Even if it hadn’t turned out the way we found it, there would have been a red flag in the audit report saying ‘Where is this money and have you received this money?’ said Atwood. ‘If so where is it?’ It would have come up eventually.”

“It’s more about looking backward at what we could have done differently and about being vigilant,” said Rapp. “If, through the court proceedings, the principal is found guilty, I think we need to think as a board about how much faith we had in this man. I think we need to be a little more critical.”
Former Readsboro Central School principal Michael Heller pleaded not guilty in Bennington Criminal Court on Monday to a felony charge of embezzlement, and the theft of approximately $200 in student lunch money.

Heller, 40, of Fairfax, pleaded not guilty to embezzling over $4,000 from two separate grants that equaled $6,000, one from Lowe’s for school security improvements, another from Macy’s for a production of “Yes, Virginia.”

Heller resigned as principal of RCS at a school board meeting on December 16, 2013, after less than two years on the job. According to an affidavit written by state trooper Lauren Ronan, in that time, Heller is accused of diverting $4,536 in grant money for personal use out of the “principal’s account,” a bank account that Heller kept at People’s United Bank, unbeknown to the Windham Southwest Supervisory Union’s central office. This “principal’s account” is where the school district began to unravel Heller’s alleged activities.

According to the affidavit, the investigation began after WSSU superintendent Richard McClements contacted state police on December 19, 2013, to report that the school district as well as the Readsboro School Board suspected Heller had misused funds awarded to the school through grants. McClements made the report after he and WSSU business manager Karen Atwood conducted a five-week investigation into what they suspected was the misappropriation of funds at RCS.

The suspicions arose when Atwood ordered an internal audit of school expenses in November, after discovering that money from three grants had been deposited into the principal’s account. Atwood became suspicious after $94 given to the school by Target had been deposited into the Readsboro School Activity Account, which is monitored by the district’s central office.

According to the affidavit, after finding out about the principal’s account, for which Heller was the only signatory, Atwood confronted Heller and asked him to provide bank statements and the transaction history of the account. Heller took several weeks to supply this information, as well a list of items he had bought for the school, but the purchases listed did not match the bank statements provided by Heller.

Readsboro Town Clerk Amber Holland was asked by the Readsboro School Board to look at the “principal’s account” as a neutral third party. Holland compared transaction histories supplied by Heller with transaction histories provided by the central office, and also looked at bank statements between May and November 2013. Holland contacted two vendors for information pertaining to two separate purchases and concluded that the amount purchased from these vendors did not match the information submitted by Heller, according to Ronan.

According to the affidavit, Heller provided an invoice from May 15, 2013, in which he purchased $1,499 in security equipment from Lorex. The invoice provided by Lorex was for a total of $464.44. The other invoice was from June 6, 2013, when Heller spent $2,590 at Qualified Hardware. The invoice from that company totaled only $763. Another invoice Holland looked at was for $937.34 spent on for a wireless headset system. According to the bank statement, only $159.52 was actually spent on a cheaper model.

Heller provided computer-generated invoices from Qualified Hardware and Lorax, complete with the items purchased, their total cost, and the company logos. According to Ronan, these invoices didn’t match the computer-generated invoices provided by these companies. “It was obvious by the information provided to me that Heller had made up the invoices in an attempt to cover up his personal purchases,” said Ronan.

Heller’s alleged embezzlement activities spanned a six-month period in which 61 transactions were made. According to court documents, the purchases begin in May 2013 with two transactions, one at Anchor Seafood, the other at Rite Aid. In June, Heller made 17 transactions, 10 of which were for $100 or more. These purchases were made at Walmart, Pet Meds Corp. and the Days Inn Hotel, while six transactions under $100 were made at gas stations, Dunkin’ Donuts, Christmas Tree Shops, Home Depot, and Price Chopper. Ronan mentions one legitimate transaction in June for $763 for security equipment at Qualified Hardware.

In July, the number of transactions reached a peak at 18, with 13 for purchases under $100. Heller allegedly made purchases again at Price Chopper with cash back, as well as purchases at gas stations, convenience stores, and hardware stores. Transactions of over $100 included one at Killington Lodge, and multiple cash withdrawals. Another legitimate purchase of security equipment was made in July as well.

In August, nine transactions were made, four of which were cash withdrawals of over $100, while in September, six transactions of under $100 were made at convenience stores, gas stations, and Rite Aid.

Fifteen transactions were recorded in the month of October, 14 of which were under $100, and in November, six transactions were made including cash withdrawals and gas/convenience store purchases.

In all, Ronan said that of $6,094 deposited into the account, $1,060.51 was used for security equipment at the school, and $4,536.02 was used for personal purchases and withdrawals. In an interview with Ronan on January 6, Heller admitted to misappropriating the grant money, as well as forging transaction receipts and bank histories. According to the affidavit, “Heller advised he had every intention of placing the money back into the account,” with money received through the Wings after-school program as well as operating his own lawn care business during the summer months.

During his interview with Ronan, Heller said he took the funds because he and his mother both suffer from health issues, causing them financial strain. Heller said he had given his mother approximately $1,046 to help her pay off nearly $1,500 in motor vehicle fines as well.

As for the lunch money, Ronan conducted interviews with the school’s secretary Patricia Kidney, who said she began to suspect Heller of stealing student lunch money during the 2012-2013 school year, when small amounts of money began to go missing. Kidney said that students and parents would drop off lunch money at her desk, which she kept in an unlocked location, and turned in to the town office on Fridays. As the totals began to come up short, Kidney said she supplemented the shortfalls with her own cash, and when she approached Heller about the missing money, he advised her not to worry, saying the Power Lunch Program, a QuickBooks type of program, would even the money out. Kidney said that one time she had found a students’ empty lunch money envelope in Heller’s desk, after Heller claimed he had put it on Kidney’s desk.

Heller has denied stealing any lunch money. According to published reports, Heller’s attorney, David Silver, said that there is no evidence placing blame on Heller and that the person responsible for the money should be the prime suspect in its disappearance.

Heller told Ronan that he was aware of the lunch money theft from the previous school year, but not from the current one.

McClements said that insinuation is neither believed nor supported by the WSSU and the school board. “We want to be clear in that we believe she (Kidney) had absolutely nothing to do with the misappropriation of any funds,” said McClements. Over the course of her investigation, Ronan also contacted a former employer of Heller’s, the North Carolina public school system. Ronan spoke to a former supervisor of Heller’s, Ron Villines, who claimed that several items Heller had put as his responsibilities on his resume were not true. He also said that Heller had once run an expensive field trip for students in which he collected between $500 and $1,000 and failed to follow school protocol in handing in the money. Villines said Heller instead kept the money in his desk and one day “it all went missing,” and they never found out who was responsible.

According to published reports, Silver said the police information about Heller’s previous job is likewise irrelevant, and that there is no information regarding the missing money or of Heller ever being suspected of its disappearance.

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