[T]he town of Coventry, a tiny Northeast Kingdom municipality, recently submitted an insurance claim trying to recover nearly $1 million in missing money.
For more than 13 years, the Coventry selectboard has been attempting to reconstruct the town’s slipshod accounts. But Cynthia Diaz, who during that time has served as treasurer, clerk and until earlier this month delinquent tax collector, failed to cooperate with auditors.
While other officials have been reluctant to assign blame, Selectboard Chairman Mike Marcotte says he believes Diaz has been embezzling from town accounts. No charges to date have been filed against Diaz.
On Tuesday, Coventry submitted a claim to the Vermont League of Cities and Towns for $876,383. The league will cover only up to $500,000 if an instance of employee theft can be proven.
Marcotte said he was shocked by the size of the claim. “It was pretty amazing,” he said, “and, actually, that’s a conservative number.”
He said it only includes missing tax money, not other fees that Diaz is required to collect. In total, the town identified more than $1.4 million in unaccounted town funds, according to a spreadsheet submitted with the claim.
Another expense to the town are auditor and attorney fees. Since 2004, the town has paid auditors more than $380,000 to inspect its accounts, though Town Administrator Amanda Carlson, who provided this total, worries it may be inaccurate because the town’s finances have been kept inconsistently. Carlson said the town has also spent nearly $6,000 on an attorney to sue Diaz.
The Vermont League of Cities and Towns has not yet determined whether it will accept Coventry’s claim, but Carlson expects a decision in the next few weeks.
Diaz said the claim is “ridiculous.” Taxes were deposited, she said, and the town isn’t missing nearly a million dollars.
“It’s insurance fraud, as far as I’m concerned,” she said.
In October the Vermont State Police launched an investigation into Diaz and the town’s accounts and is sharing findings with the Orleans County state’s attorney’s office. The investigation is ongoing.
Jeff Graham, the sixth auditor hired by the Coventry Selectboard, is the first to complete an audit and identified about $150,000 in missing town funds. He said his estimate would likely rise.
Although the FBI won’t confirm it, Graham says agents contacted him in late December to review his records.
The scope of the FBI’s investigation is unclear. What is known is that Diaz was keeping an offshore bank account in the Bahamas and in early 2000 received more than $90,000 in wired money from Panama, according to state investigators.
Diaz says she has no account in the Bahamas and said the wired money is of a personal matter and has nothing to do with the town.
Diaz was elected to three town offices in 2004 and has since won re-election, often handily, despite an embezzlement investigation at a company where she worked, a guilty plea to tax evasion and intense scrutiny by auditors.
Her support, however, appears to be waning. At Town Meeting Day earlier this month, residents overwhelmingly passed an article that changed the delinquent tax collector from an elected position to an appointed one. Its passage barred Diaz from running for another one-year term.
Coventry’s new delinquent tax collector is Kate Fletcher. The board appointed her Wednesday. Diaz was not among the four others who applied.
