Coventry town clerk firing decision to be made Friday

Coventry’s entrenched town clerk and treasurer, Cynthia Diaz, will lose her job at midnight Thursday if she has not found a $2.5 million bond to cover her offices, officials said in a meeting Monday.

“My thought is we have to prepare for that – one way or the other,” Coventry Selectboard Chairman Mike Marcotte said.

Cynthia Diaz

Cynthia Diaz, the Coventry town clerk, treasurer and delinquent tax collector, at her desk at the Coventry Community Center. Photo by John Lazenby

Board members agreed the town would not take action until they discussed their options Friday.

Marcotte said state law will automatically disqualify Diaz as clerk and treasurer if she does not meet the deadline Thursday night. Once that time has passed, the board must transition Diaz out.

Efforts Monday to reach Diaz were unsuccessful.

State law requires towns to insure offices that handle public money.

The town lost its insurance policy in late May when the Vermont League of Cities and Towns paid Coventry a $500,000 claim for nearly $870,000 in missing tax money.

The payout was the maximum amount the insurer could pay Coventry.

The Selectboard demanded that Diaz find a bond to cover a $2.5 million insurance policy, equivalent to the amount in the town’s checking account. Board members are worried that those funds, too, could go missing.

Auditor Jeff Graham found that in total Coventry is missing more than $1.4 million.

Since Diaz took office in 2004, the Selectboard has tried to explain discrepancies in the town’s accounts, but five previous auditors the town hired made little progress because Diaz denied them the documents they needed. The first auditor said she suspected fraud was occurring in Coventry. Others raised similar alarms.

But without definitive findings, a portion of the town discredited the Selectboard’s concerns.

Now 13 years later, fewer people can.

Town officials say the insurance company’s payout gives Graham’s forensic accounting credibility and reinforces the Selectboard’s longstanding fears that Diaz has been embezzling for years.

Twice before, Diaz was investigated on criminal charges of embezzlement by the Vermont Attorney General’s Office and Newport Police Department. She was not convicted in either case.

The FBI is now conducting a separate probe into Diaz. At one point, she had an offshore bank account in the Bahamas and received tens of thousands of dollars in wire transfers from Panama.

The Vermont State Police is also investigating.

Dan Schwartz

Dan Schwartz has worked as a staff reporter at daily newspapers in Alaska, the Four Corners area and Santa Fe, New Mexico, for half his 20s. He has received numerous awards for his investigative reporting on corruption. Read more

Email: daniel.james.schwartz@gmail.com

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  • wendywilton

    No treasurer’s reports to the select board and no annual audits. Big mistake for any town or school district. The selectboard has not held her accountable for years. Unbelievable.

    • DougHoffer

      That’s disrespectful. As the article made clear, the selectboard has been trying to get to the bottom of this for years. They paid for five audits that were hindered by limited access to data controlled by the Treasurer. The voters kept re-electing her so there was little the board could do. Selectboard Chair (and Republican State Representative) Mike Marcotte has been working on this for years.

      • Jim Manahan

        Agreed, the Selectboard appears to have done everything legally within their powers, and amazingly she gets away with not cooperating on those audits. That in itself should be criminal.

    • Steve Baker

      I agree Wendy, As long as the money kept disappearing and the Town Clerk/Treasurer was allowed to stonewall, the Select”board” wasn’t doing enough.

  • John farrell

    Coventry will never get the rest of the money back.It is probably in some offshore account just like the other thousands she ripped off. Best to try her find her guilty(is there any doubt) and lock her up.

  • DougHoffer

    David – I’m not sure what you mean by an “investigation.” The selectboard hired auditors on multiple occasions. Doesn’t that qualify as initiating investigations? In any case, what other options were open to unpaid part-time elected officials with no direct authority over another independently elected official? It’s a weird situation.

  • DougHoffer

    I hear you. But you were an employee. She is an independent elected official who does not answer to the selectboard. Oddly, the voters kept re-electing her.

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