In a small, but significant victory on Monday, Coventry officials recovered taxpayer monies held by a former town clerk who is accused of embezzling more than $1 million.
Judge Robert Bent ordered on Monday that Cynthia Diaz turn over about $5,000 to the town. Diaz served as town clerk and treasurer until late last month when the selectboard forced her out.
The money, which was collected as part of delinquent tax sales, had been held in escrow by the former town’s attorney Bill Davies.
Davies, who was fired in early May, wrote three checks totaling $5,107 directly to Diaz later that month. The money came from the sale of several properties for back taxes.
Diaz deposited the money in a personal account. Community National Bank froze the funds.
The former Coventry town clerk, who is representing herself in court, told the judge the money did not belong to the town. Diaz argued that it should be returned directly to a buyer who purchased property at tax sale.
Scott Morley, a member of the Coventry Selectboard, said the town had already returned the money and the funds from Diaz’s bank account would be a reimbursement to the town for that payment.
Bent, the presiding judge in Orleans County Superior Court, ordered that the money be released to the Town of Coventry.
The 10-minute hearing is the latest development in the town’s civil case against Diaz. On Aug. 1, the judge will hear oral arguments regarding Coventry’s demands that Diaz turn over records, financial documents, thumb drives, keys and other town property.
Diaz has been under investigation by the FBI since December.
The Vermont attorney general’s office in 2011 convicted her on two misdemeanor accounts of tax evasion but did not bring embezzlement charges despite complaints from the town dating back to 2005.
Meanwhile, Davies, the longtime town attorney, has defended Diaz and has resisted turning over town records, including audits that indicated early on that the town clerk was allegedly taking cash for property tax payments and failing to deposit the money in the town account.
Morley says he’s “confident” that the town will receive the documents eventually. The selectboard asked Davies for more than 100 financial records, contracts and other documents two months ago and has only recently received a dozen or so tax sale records.
Correction: Scott Morley is a member of the Coventry Selectboard, not its chair. The chairman is Mike Marcotte.