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'Sophisticated scheme' bilked $2 million from Lawrence probation department

E-mail|Link|Comments () December 3, 2009 03:02 PM

By John R. Ellement and Peter Schworm, Globe Staff

SALEM - A former accounting clerk was arraigned today on charges that she stole more than $2 million from the Lawrence District Court's probation department, crafting a massive embezzlement scheme that managed to elude detection for nearly three years.

Prosecutors said that Marie Morey, a 38-year-old who had worked in the probation department since 1990, employed a host of complex accounting maneuvers to pocket some $12,000 a week from 2006 through this summer, when she left work amid sharp questioning from suspicious auditors.

"This case involves a very elaborate, intricate, and sophisticated scheme," Assistant District Attorney Michael Patten said at today's hearing at Essex Superior Court. Morey, the only person in the department authorized to change entries in the court's accounting system, used her position to manipulate the records and bank deposits to cover her tracks, prosecutors said.

Auditors who uncovered the alleged fraud over the past several months said they had only encountered one of Morey's methods, known as a "negative, non-money error reversal," once or twice over the past 20 years. Francis M. Wall, deputy commissioner of the state's probation office, declined to comment on the case, saying it was a pending criminal matter.

Morey is also accused of pilfering courthouse fees paid in cash and then submitting falsified money orders to mask the theft.

"She would pocket the cash and substitute the money orders to make it look like the proper amount of money was deposited," Patten said. Prosecutors said Morey apparently acted alone.

Morey pleaded not guilty to larceny of property over $250 and submitting false written reports. She had been arrested Sept. 30 for allegedly stealing $6,350, but investigators suspected far more money was missing. She was arrested yesterday after being secretly indicted on the new charges. Her lawyer, John Valerio, said the new charges were out-of-line with her modest lifestyle.

"I was completely surprised when I heard the allegation of $2 million," he said. "There is a vast, vast gulf between what the government says has happened here and what her lifestyle is."

Valerio described Morey, a single mother of two, as a "lowly accounting clerk" and a "homebody" who lives modestly and has struggled to pay her bills since leaving her job. She earned her GED and does not hold an accounting degree. One of her children attends private school but on a scholarship, he said.

Morey's mother, who attended the hearing and left in tears, lives in the Dominican Republic, and Judge Timothy Feeley expressed some concern that Morey might flee. He set bail at $400,000 in cash.

"She could well have stashed money there," he said. "There is strong evidence of embezzlement of large amounts of money."

Morey was forced to surrender her passport after her initial arrest. If convicted she faces up to five years in state prison.

An American citizen born in Methuen, she was paid $47,000 in 2008 and her home, a single-family residence in Lawrence, is valued at $228,800, public records indicate. She declared bankruptcy in 2000.

The allegations arose from a routine audit in February that found discrepancies, triggering a broader investigation. When auditors interviewed Morey, she stonewalled, prosecutors said.

"She was nervous, disoriented, frozen-up, and ignored their requests for documents," Patten said. In July she abruptly stopped showing up for work.

"The paper trail ended with the defendant," Patten said, who said discrepancies were limited to the days that Morey worked.