Kennett Township unwraps Lisa Moore embezzlement12/14/2021 03:09PM ● By Richard Gaw
By Richard L.
The State Correctional Institute at Muncy, formerly known as the Industrial School for Women, is located 18 miles east of from Williamsport, Pa. in Lycoming County, and serves as the diagnostic and classification center for all women entering the state’s prison system.
Of the medium-maximum security facility’s 793 acres, 30 are enclosed within a security fence at the institution’s perimeter, where inmates live in 15 permanent and modular inmate housing units, in both dormitory-style arrangements and in private cells.
At Muncy, the visiting room is closed to outside guests on Tuesdays from Labor Day until May 31, so on the night of Dec. 7, it is not known how Inmate No. PE4676 of the Pennsylvania Prison System spent her evening.
At the same time however, 189 miles to the south at the Kennett Township Building on Burrows Run Road in Chadds Ford, more than one dozen residents who gathered in the meeting room and over 50 more who watched on Zoom listened to a two-hour discussion about how Inmate No. PE4676 – former Kennett Township Manager Lisa Moore – managed to embezzle $3,249,452 from the township over at least an eight-year period dating back to 2013.
Over the course of six presentations – three of which were given by supervisors Whitney Hoffman, Scudder Stevens and board chairman Richard Leff largely in the form of pre-written remarks – the public meeting unraveled the impact of Moore’s scheme on the township, which led to a months-long investigation in 2019 and eventually her sentencing on Oct. 4 to incarceration for a minimum of three years and a maximum of 10 years, for first-degree felony Theft by Deception and additional crimes.
‘It was one big, tangled mess’
The meeting’s purpose was clearly defined at its beginning by Leff, who provided a summary of the two-year investigation into Moore’s theft.
“Tonight, we are going to explain how the crimes of Lisa Moore plunged Kennett Township into a crisis,” Leff said, “involving the theft of more than $3 million and how that township today has recovered from those depths of that financial emergency and now is governed by many of the best of today’s financial safeguards.”
Leff then gave details about how the investigation began in late April 2019, when he received a call from a fraud analyst at Capitol One Bank, who was inquiring about township checks that had been deposited to a customer’s account that was later determined to be Moore’s account.
Leff said that several days later, the township showed the Chester County Detectives a stack of canceled township checks made payable to Moore that totaled three quarters of a million dollars, using the signature of Stevens that had been affixed by a rubber stamp – which was later found in Moore’s work desk at the Township Building.
Stevens said that when he was alerted to the suspicious signatures by authorities, he saw that each of his signatures was identical to the other.
“Then I signed my name five times, and every one of those signatures was discernibly different, so it was very clear that I didn’t recognize [the checks] and I didn’t sign and of them, and it was on that same occasion that they went into Lisa Moore’s office and found in her desk not one but two rubber stamps with my signature.”
“It was an awful day, and it began a long journey filled with one bit of discovery after another, that has lasted nearly three years so far,” Leff said. “One of our own, the once trusted and respected manager of our township had betrayed us, right under our noses and the noses of every one of our financial experts, service providers, staff and state watchdogs.”
Leff said that the investigation led to an across-the-board distrust in the township’s entire financial system – every document, payment, bill and every account balance. He said every entry would need to be examined, verified and repaired.
“The whole structure Lisa Moore created was corrupt,” Leff said. “It was one big, tangled mess.”
During the summer of 2019 – while the investigation by the Chester County District Attorney’s Office was kept under wraps -- the rumor mill concerning the investigation reached its highest volume, and implications went as far as to point the finger of accusation at the township’s supervisors. It was just the beginning, Leff said.
“It hurt, but we were committed to staying the course, because we knew that the truth would eventually come out,” he said. “As is the case for most public officials, we were not prepared to deal with embezzlement and fraud – crimes with so many difficult-to-deal-with consequences. Nothing about our training had prepared us for a crisis of this magnitude, including suddenly not knowing if we could trust the people we worked with.”
Leff said that as the investigation continued, the township hired an accountant; created a new accounting system; engaged the support of a non-profit organization that helps municipal governments; hired a temporary township manager and eventually Eden Ratliff as its full-time manager; and hired a team of forensic accountants led by Ricardo “Ric” Zayas of Marcum, LLP.
‘Inside the Forensic Investigation’
From his first meeting with the township supervisors, Zayas said that he had three objectives: to follow the evidence of the investigation that he and his staff had been given; to fully cooperate with authorities investigating the then-alleged theft; and to do a thorough investigation.
“That was our charge, and that’s what we did,” said Zayas, who told the audience that the investigation traced Moore’s suspicious transactions back to 2013. “We started off with the evidence that was available, which was that three-quarters of a million dollars [had disappeared from the township’s records]. The accounting records of the township were not accurate. [There were] omitted entries and false entries. It either wasn’t recorded or recorded incorrectly.”
Nicole Donecker, a senior manager at Marcum, LLP with over 20 years’ experience in forensic accounting, said that despite several inaccuracies found in the township’s QuickBooks system, it still allowed the firm to detect where Moore manipulated money and concealed her thefts. Marcum also consulted the township’s payroll schedule to determine when the township’s invoices were normally paid to vendors, and worked with third-party references to help verify those transactions that were not used for the benefit of the township.
Marcum LLP’s investigation also looked into Moore’s use of the township’s credit card that was traced to her personal purchase of several items such as designer clothes and leisure trips.
As a result of its collaboration with the township’s banking centers, as well as the Chester County Detectives in May 2019, Marcum, LLP was able to achieve what Zayas called an “expedited result” that ended with a criminal complaint filed against Moore in December of that year.
Rather than become absorbed in the emotional aspects of the investigation – such as being the recipient of a violation of trust in a colleague – Zayas said that Marcum, LLP conducted their work with “a lack of emotion, with objectivity and with extensive experience.”
“Another piece of the experience we brought to the table was in understanding the type of evidence that is necessary to bring a matter like this to court,” Zayas added. “We weren’t dealing with a civil investigation with the proof threshold of preponderance. We were building a case, amassing the necessary evidence to put together a case that meets the criminal burden of proof beyond a reasonable doubt.”
‘Financial management in Kennett Township looks nothing
like it did two-and-a-half years ago’
In his presentation “Rebuilding our township government,” Ratliff walked those in attendance through the township’s overhaul of its accounting systems, which he said will significantly reduce the likelihood that fraud would ever be committed in the township again, as well as substantially provide better internal and external oversight.
Ratliff said the township has introduced a new accounting ledger that is fit for a small, local government that is streamlined, automated, Cloud-based and made easier for township residents who need to pay a township bill.
Ratliff also said that the township has also moved to a Governmental Accounting Standards Board (GASB) accounting system that establishes accounting and financial reporting standards for U.S. state and local governments that follow generally accepted accounting principles.
“Financial management in Kennett Township looks nothing like it did two-and-a-half years ago, and it is something that we can have pride and confidence in,” he said.
“We want to make sure that the Board of Supervisors and the community have all of the information that they need and that they want. There is no hidden information and access remains open to anyone who needs it.
“To rebuild trust and confidence in the township government, we wanted the community to be involved and knowledgeable. In addition to financial management, the Board of Supervisors challenged us to rethink all of the areas of township government and restructure as needed.
“We’ve done and continue to do our best to do that.”
Restitution and Recovery
Referring to Moore’s crimes as an “enormous tragedy” and a “mess,” Stevens introduced what is on the township’s plate to recover the more than $3.2 million that Moore stole from the township. So far, the township’s recovery effort has two main parts: restitution from any assets that Moore has that will come back to the township via the court system and the District Attorney’s Office, and tapping other possible sources, including insurance from service providers and from others the township hopes to settle with.
At its last tabulation, the township has recovered $2.7 million – or about 85 percent of the total that Moore stole. The township’s restitution effort got a large boost on Oct. 4, when before her sentencing, Moore provided a certified bank check in the amount of $1.27 million to the District Attorney’s Office. In addition, the township acquired the proceeds from the sale of her Kennett Township home which was recently sold for $355,000, as well as $82,000 that was seized from one of her personal accounts.
In addition, the township’s recovery included a $1 million bond the township carried on Moore.
“Another $440,000 was saved from Lisa Moore’s pension and is being used to support other township pension obligations,” Stevens said. “This is possible because of a state law that prohibits anyone from profiting from a fraud committed while working for a municipal or state agency.”
Stevens said that since the investigation into Moore’s embezzlement began, the township has spent a little more than $1 million in an effort to recover the stolen money, which has largely been used to pay for legal and accounting fees.
When Joseph Poluka, an attorney with the firm of BlankRome, LLP, was first retained by the township in September 2019 to recover the money that Moore had stolen, he met with the township’s supervisors.
“I told them, ‘You may recover nothing,’ because in a vast majority of these cases, there is no money,” Poluka said. “It is the proverbial ‘wine, women and song.’ It’s gone. There was no guarantee that a nickel would be recovered.”
During BlankRome’s investigation, the township gave the firm full access to all township documents and employees, which resulted in confidential interviews, which confirmed that Moore was the only individual who perpetrated the crime.
Poluka then referred to the news that the township has recovered 85 percent of what it lost through Moore’s embezzlement.
“This is a happy result, and I think it’s going to get happier if we dig in a little more, but I think the township residents need to know that this is an unusual recovery,” he said.
Poluka said that the efforts to reclaim the balance of the stolen money include an order of restitution and the filing of a civil suit, which is currently on hold.
‘In a Greek sense, this is a tragic, tragic story’
During an hour-long question-and-answer period, a portion was spent analyzing the mindset of those who commit government-related fraud and embezzlement similar to Moore, as well as further examining what possible motivations Moore had for stealing from the township.
“The crucial element that invariably exists in these situations is the ability to get people to trust you,” Zayas said. “Ms. Moore was a trusted person in this township, not only with the supervisors, but with the citizens. She was by all accounts respected.
“That had always been a critical factor in any of these [cases]. They break that trust and a lot of people are devastated.”
“I have tried to figure this out from the beginning,” Hoffman said. “Was this about being a big deal in the community? Was this about somebody who had a hardscrabble background and raised herself up to be admired? That was the exact reason why none of this made sense to me, because I couldn’t understand why someone who had worked so hard to become a pillar of the community would put it all at risk. That’s a gamble to me that just doesn’t make sense.”
“I feel very bad for [Moore],” Stevens reflected. “I feel very bad for us, and when I say us, I am talking not just about the supervisors but the township and the larger area.
“In a Greek sense, this is a tragic, tragic story. I can’t guess what drove her to do this.”
Leff recalled when Judge Bortner gave Moore an opportunity at her Oct. 4 sentencing to make a statement before him, the board and those in the courtroom.
“She had a chance to answer the judge directly, yet she only spoke through her lawyer,” he said. “Personally, I didn’t see any remorse except maybe that she got caught. I can’t speculate on [her] reasons [for committing such a crime] except for greed and selfishness.”
To contact Staff Writer Richard L. Gaw, email [email protected]