By Chris Berendt
August 14, 2013
A former Garland town clerk pleaded guilty Tuesday to 11 counts of embezzlement and a count of misdemeanor financial card fraud and saw judgment continued in the case, in which she paid in excess of $35,000 back to the town, the largest amount of restitution the presiding judge had ever seen.
Longtime clerk Teresa Vaught, 68, who was officially dismissed by the town in March 2012, entered the plea in Sampson County Superior Court. Standing next to her attorney Kenn Thompson, Vaught said she knew she was pleading guilty. Other than yes and no, Vaught did not speak.
Assistant district attorney Robert Thigpen prosecuted the case for the state and presented the facts to Superior Court Judge Arnold Jones, saying that state evidence showed Vaught, who was hired by Garland in July 1992, had used town funds to pay for her son’s medical expenses for at least a decade, despite never receiving authorization to do so.
“The offenses reflect medical insurance payments for fiscal year 2001 up until 2012,” said Thigpen of the embezzlement charges. “Insurance records for 1992 to 2000 were not available.”
Thigpen said the town clerk paid those bills from the town “with no additional oversight.”
Vaught was the town’s longtime clerk up until early 2012. She was officially terminated from her duties in March 2012 by the Garland Board of Commissioners after being placed on probation just two months earlier following a scathing audit report that found discrepancies in the town’s finances and bookkeeping.
During an emergency meeting Feb. 25, 2012, the board placed Vaught and deputy clerk Kristie Kersey on administrative leave with pay on the advice of the N.C. Local Government Commission. Days later, that suspension was modified, halting pay but still extending retirement and health insurance benefits.
On March 27, the board officially fired the two employees.
District Attorney Ernie Lee was notified of the alleged incidents of embezzlement in late February 2012 and immediately contacted the State Bureau of Investigation, which assigned agent Bill Brady to the case. Brady made contact with Garland mayor Winifred Murphy, who told authorities the clerk and deputy clerk were giving themselves pay advancements not authorized by the town.
“During the course of the investigation, it was determined that the defendant, the deputy clerk and a third employee received pay advancements,” said Thigpen. “However, to make up for the advancements, the defendant would not submit their pay until the next pay cycle and the financial records for the town did not indicate the town suffered a financial loss.”
However, Thigpen said Vaught was also paying her son’s medical insurance premiums from town funds since she was hired, saying it was an agreement between her and Garland town leaders before she accepted the job. Brady, under the advisement of Lee, sought out previous board members and meeting minutes to see if that was the case.
Investigators found that no other relatives of town employees received medical insurance coverage but Vaught’s, Thigpen said. Of the five board members and the mayor seated at the time Vaught was hired, three said insurance was not authorized for Vaught’s son, while two said they did not recall the board making that authorization. The other is deceased.
Board minutes also reflected no such authorization, Thigpen noted.
He went through the amounts paid out by the town of Garland in insurance premiums to Vaught’s son, ranging from $2,000 to $4,200 for each of the 11 years from 2001-12. Additionally, a town-owned Walmart credit card was utilized by Vaught for her personal use in March 2011 to buy $167 worth of groceries, mainly food and drinks.
During the investigation, Vaught conceded the signature on the store receipt was hers. In total, the 11 years of medical insurance premiums and the use of the town’s credit card totaled $35,629.89.
Vaught was charged by the N.C. State Bureau of Investigations on Jan. 4, 2013.
She pleaded guilty Tuesday as part of a plea arrangement, by which the state would not proceed with the greater offenses of embezzlement by a public officer or trustee, with the stipulation that the terms and conditions of the sentence be determined by the court.
The 11 counts of embezzlement were punishable by up to 27 years in prison, carrying a maximum sentence of 30 years in prison for each count. Financial card fraud, a Class 2 misdemeanor, carries a maximum sentence of 60 days.
Thompson asked the judge to consider that Vaught is 68 years old, has no prior record and cooperated with law enforcement throughout.
“This was originally an investigation about early payment, which she acknowledged from the outset that she would pay herself, another clerk and some other employees early,” he said. “No extra payment was discovered. She would simply pay herself earlier than when the scheduled pay was due.”
Thompson said the defense was not disputing any of the state’s facts, but addressed the embezzlement offenses.
“In 1992, Mrs. Vaught was working with her husband. At trial we would present evidence, not only from the defendant but from other witnesses, that she moved to Garland and took this job specifically on the condition that not only she receive benefits but that her son receive benefits, because in her prior job her son was covered,” Thompson said.
“The last 20 years Mrs. Vaught wrote checks from the town of Garland, she never wrote or signed any check that was not co-signed by a mayor,” Thompson continued. “So every single insurance payment check that the state has alleged are part of the embezzlement was also signed by whoever the mayor was that particular year. Every single check. I would like the court to keep that in mind.”
Thompson said a $35,000 check was handed to Thigpen early Tuesday. That check was then given to Murphy. If circumstances were different, Vaught would go to trial in the case, Thompson said.
“If this lady was not a cancer survivor, not 68 years old with no prior record and she was 20 years younger, this case would be going to trial,” Thompson remarked. “With that being said, she has voluntarily paid back every penny that the city of Garland is alleging they’re owed.”
Thompson asked the court to consider continuing judgment. Thigpen said the state opposed.
“Judge, there has to be some accountability,” Thigpen said. “She was given a public trust and the evidence clearly shows she abused that trust. They were pleased they were receiving the restitution, but the state is asking that there be some accountability.”
Murphy was asked if she wanted to speak.
“The main thing is getting the restitution for the citizens of Garland,” the mayor said. “And we would like to make a statement that accountability is very, very important.”
Jones asked Vaught to stand for sentencing. He said, in his five years as a judge, he had never seen such a large restitution amount, calling it a “significant amount of money.”
Jones said he considered Vaught’s culpability, her position as a public official, as well as her bout with cancer and the fact she did voluntarily pay the town of Garland back the $35,000 Tuesday morning before her hearing. He also considered the stance of the victims, and the town officials’ chief desire to see money owed to Garland back in town coffers.
“With that in mind, upon your plea of guilty, in my discretion I am going to continue judgment in this case,” Jones said. “I am doing that whether you work for the town or you work on a farm. I would treat no one differently.”
That prayer for judgment would be granted for 24 months, Jones said, with a few conditions.
A prayer for judgment is neither an admission of guilt nor a plea of innocence. If accepted by the judge, the charge against the accused is dismissed though the judge usually has conditions for the violation to not go on the person’s record. Jones laid out his conditions after the ruling.
Vaught was ordered to pay the cost of holding Superior Court and a fine of $1,000 within 90 days; write a letter of apology to the town of Garland, specifically to Murphy, within 10 days; and to commit no crime or break any law, excluding minor traffic violations, during the next two years.
“I have tremendous respect for Judge Jones and his discretion,” Lee said following the ruling. “We just respectfully oppose it.”
Lee credited the SBI for its hard work and said, with the agency’s assistance, the DA’s Office will continue to prosecute embezzlement cases to ensure everyone, especially those who entrusted by the public and with taxpayers’ money, are held accountable in such cases.
“We’ve had so many embezzlement cases involving public officials in this district,” Lee said. “We spend a lot of time and resources and it takes a lot of time for prosecutors. We’re very pleased with the amount of resources the SBI placed in this case. If we have enough evidence to go forward with charges in any embezzlement case, we will. We will continue to be aggressive in them.”
Chris Berendt can be reached at 910-592-8137 ext. 121 or via email at firstname.lastname@example.org.