DA's office in 'final stages' of securing records in township bank fraud case
● By Richard Gaw
In an effort to keep its residents informed and bring calm to a rising windstorm, the Kennett Township Board of Supervisors provided an update at their June 5 meeting that said the Chester County District Attorney's Office and a forensic accounting firm are in the final stages of securing records and documents related to the investigation of suspicious transactions discovered in its bank accounts, which was first reported by the banks' fraud department on April 25.
During the meeting, board chairman Scudder Stevens confirmed that the investigation is exploring the township's bank transactions as far back as a decade.
“We are looking at this very closely now, and have already put into effect changes in policy to understand what's happening, and make sure that nothing occurs in the future,” he said. “Take that as understanding that this investigation is crucial for understanding the problem, and that's the reason why we want a forensic auditor, who is going to look at every transaction for the last ten years, to find out what has happened.”
In an opening statement read before about 30 residents, Stevens said that all township employees have been asked by the District Attorney not to discuss the specifics of the case, in order to avoid sharing details that would jeopardize the case. He did, however, share that Police Chief Lydell Nolt recently received a joint memo from the investigators – both the DA's office and Marcum, LLP – a forensic auditor hired by the township to pore through the township's records – that said they “are in the final stages of securing records and documents, both from internal and external sources,” Stevens said.
“As we speak, the analysis and qualification of those documents and records are being actively pursued by both the accountant and investigators jointly. We anticipate that this analysis will continue for an extended period of time. It is important that all pertinent documents and records are reviewed.
“We continue to internally review Township operations, and take corrective actions when appropriate, to ensure the proper functioning of both financial and operational matters,” Stevens continued. “We will have more to report on these matters at the appropriate times – in keeping with the constraints asked of us by the investigators.”
Stevens concluded his statement by thanking township employees, including its police force, “who have risen to every challenge they have faced in recent weeks,” he said. “I would also like to thank the citizens, friends, service providers, vendors and others here in Kennett Township who have been understanding, supportive and patient during the past month.”
Only a little more than one month old, the arc of the investigation to uncover possible fraud in the township has already encountered several twists and turns. On May 11 at 10:15 a.m., the Chester County Press received an email from a Kennett Township Supervisor, with a headline that read “Important Kennett Township Announcement,” informing the Press that the township was exploring suspicious transactions discovered in its bank accounts.
At noon that day, a letter was sent to township residents that began, “The Board of Supervisors pledged to you to have an open and transparent government. In keeping with that pledge, we are writing today to inform you about a serious situation. Rest assured, the supervisors are taking every step to safeguard the Township and our residents.”
The second paragraph read, “On Thursday, April 25, 2019, the supervisors were notified by the Fraud Department of our bank that they had found a number of suspicious transactions on Township accounts.”
The release also stated that the supervisors carefully reviewed the findings with the bank, and legal and law enforcement representatives, and immediately referred the matter to the Chester County District Attorney’s Office. Also, steps were taken to make sure no further unauthorized transactions take place.
On May 15, Stevens began the supervisors' meeting by reading a prepared statement. “Tonight, I am sad to say that we need to begin this meeting by reporting on a disturbing event that took place in our township,” he said. “When we took office, the board promised that the government of Kennett Township would be open and transparent. That is why when we discovered this matter, that we quickly informed our constituents about the investigation. The same day we learned of these suspicious transactions, acting on the advice Police Chief Nolt and our legal counsel, we turned the matter over to the Chester County District Attorney's Office to investigate, to see what laws were violated.”
Stevens continued his statement, and told the audience that the investigation will be “absolutely impartial and unbiased.” He repeated the fact that the township has hired forensic auditors from Marcum, LLP, and later told the audience that the township has also hired image and branding consultant Carl Francis. The auditors’ report on the investigation, he said, is expected to be available by the early fall.
Stevens then fielded several questions from the audience, many of them having to do with the township's system of checks and balances regarding the authorization of check writing. Stevens said that one signature is required for township checks up to $2,000; and that two signatures are required on township checks for more than $2,000.
While the audience continued to press the supervisors for information, Stevens responded by saying that sharing specific information would “have a compromising effect on that investigation.”
“It would be easy for me to do to tell you what I experienced, but I’m only one player,” he said. “If I put any kind of spin and give you an explanation based on my vision, that’s me speculating. It needs to be done by an objective party who is investigating this thoroughly. That's the DA on one side, and the forensic auditor on the other, and there's no speculation on their part.
At the center of the controversy is former township manager Lisa Moore, who was formally dismissed by a vote of 3-0 at the June 5 meeting. Moore was placed on paid administrative leave at the start of the investigation, and was dismissed from her job on May 17, in connection to the suspicious transactions discovered in the township's bank accounts.
In an official township release, Moore's dismissal came “after new information was discovered and brought before the supervisors,” it stated. “The dismissal action was coordinated with the township’s legal and human resources representatives.”
In other actions related to the investigation on June 5, the board voted unanimously to officially ratify the hiring of Alison Rudolf as interim township manager, whose term began on May 28. Rudolf had served as the township manager for Lower Moreland Township for 26 years. During the past 10 years, Rudolf has served as an interim manager in other municipalities. Stevens said that Rudolf is earning $100 per hour, and the supervisors are responsible for overseeing her work.
The board also ratified the hiring of David Woglom, associate director of the Robert B. and Helen S. Meyner Center at Lafayette College, to assist the township in coordinating an appropriate search for a permanent township manager. An updated job description for the position is currently being developed, and it is being advertised on the township's website.
With Rudolf's hiring, the burden placed on the three supervisors to pick up the slack in the wake of Moore's dismissal has lessened considerably, “which is not to say that we are not following up in a very active and regular way, virtually every day, in some capacity,” Stevens said. “It may not be the eight to ten hours initially we were working, but it is still a significant amount of time.”
Township solicitor David Sander shared that the supervisors met in executive session in matters of personnel 11 times between May 16 and June 4.
Other township business
Stevens said that the township has received notice from PennDOT announcing that the bridge on Route 82-Clifton Mills in the township is about a month away from completion and being reopened to the public. PennDOT said that they anticipate reopening the bridge in early- to mid-July.
Sander said that the long-closed Stephens Gardens Creations, Inc. and Stephens Aquatic Services, located at 257 Kennett Pike in Chadds Ford, is under agreement of sale. Sander said he did not know the specific details about the agreement, such as the closing date of the purchase or the sale cost of the property.
For the past several years, the Stephens property has served as an eyesore for township residents, specifically those who live in the 26-home Hillingham residential development, located behind the property. In March, ten residents of Hillingham attended a board meeting at the township, where they shared their frustration of living adjacent to the abandoned business, that has been repeatedly cited for health and safety violations.
Sander said that the township's chief role in getting the site cleaned up is to enforce its property maintenance code against the new owners of the property, and have the zoning and code enforcement officers issue notices of violation.
Timothy L. Jones, principal and general counsel for Montchanin Builders, LLC, discussed revisions for a “planned village” in the township, which his company is developing a ten-acre lot at the corner of Ways Lane and Cypress Street. Jones told the board that the project is in its initial design phase, which calls for apartments, walking trails, pocket parks, underground parking and a shopping plaza.
Tom Comitta, the township's landscape architect consultant, said that the project's design guidelines are listed in Appendix F of the township's Subdivision and Land Development Ordinance, issued last September, that include standards regarding public space and open space; building design and height; streetscape elements; parking lot design; and perimeter buffers.
Jones referred to the planned development as potentially becoming “a new gateway coming into the borough.”
“When Mr. Jones and his design team took the topographic design survey and took the earlier concept plan, they were willing to be held accountable to these fashion police quality control measures that we've been trying to impose to ensure higher quality development,” he said.
While Comitta said that several “fussy edits” and zoning issues still need to be ironed out in the initial design concept for the planned project, Comitta encouraged the board to seek the input of the Chester County Planning Commission and the township's Planning Commission and then set a date for a hearing. The board approved the motion, 3-0.
To contact Staff Writer Richard L. Gaw, email firstname.lastname@example.org.