SPRINGFIELD – Susan Duffy entered two guilty pleas in U.S. District Court yesterday morning, admitting to stealing $110,278 while employed in the Collector’s Office for the City of Westfield.
Judge Michael A. Ponsor questioned Duffy extensively to determine if she was pleading guilty of her free will or if she was under duress. Ponsor asked Duffy if she understood the consequences of her plea, which stripped her of her right to a trial by jury, the right to appeal his decision at her sentencing, and the right to argue that her civil rights were violated in any way during the investigation.
Duffy will appear in court on March 27, 2013 to be sentenced on two counts for the embezzlement charge and for filing a false income tax return in 2010 at a hearing slated for 2 p.m.
“You are here today to bring closure to this case,” Ponsor said. “Are you admitting guilt knowingly, intelligently and voluntarily?”
Duffy said that she had consulted with her attorney, Thomas Kokonowski, and that she understood the charges and the federal sentencing guidelines applicable to her case.
Ponsor said the maximum sentencing he could impose might be between 10 and 15 years in federal prison, and a fine of up to $250,000, in addition to making restitution to the City of Westfield and Internal Revenue Service.
Ponsor said that the sentencing guidelines are based on a grid format that takes into account the individual criminal history of the person being sentenced and the severity of the offense.
U.S. District Attorney Paul Smyth said the guidelines for the Duffy case call for a sentence of between 12 and 18 months in federal prison, in addition to making restitution to the IRS and city.
Ponsor said he has the authority to impose a more severe or a more lenient sentence than that under the guideline formula.
“I have no idea of what sentence will be imposed on you,” he said.
Ponsor also questioned Duffy about her physical and mental health and the fact that she is taking anti-depressant and anti-anxiety medication.
“I understand that this is a very stressful moment,” Ponsor said. “You appear to be coherent. Are you understanding what I am saying to you?”
Duffy replied “yes” to Ponsor’s questions.
Duffy, as part of the plea agreement, wrote a first-person account of how the scheme worked for three years. Duffy was hired, under the name Susan Hall, in 2005, and in 2008 began to skim property and excise tax and utility bill payments from the Collector’s Department.
Cash and checks received in that office are reconciled, or accounted for, through several records that were supposed to be created each day.
Duffy found a way to manipulate that system beginning in 2008. To “conceal my theft of cash, I posted checks received on the “checks” adding machine on a given date, but did not post the corresponding bill on the “bills” adding machine tape until weeks later for the bills to be posted as paid. By not posting the corresponding bills until a future date, I concealed the theft of cash receipts given that the Tax Collector’s Office computed cash receipts by subtracting the total for the checks adding machine from the bills adding machine tape at the end of each business day.”
Duffy said that on several occasions she received a large payment, then “posted portions of those checks to the accounts of tax payers from whom I have stolen their cash payments in order to conceal my theft.”
Duffy gave an example of a 2011 payment by Westfield State University of $82,317.91 that she used to credit tax and utility accounts from which she skimmed money.
It was one of those large payments, $50,000, that was posted as delinquent by the city, while the taxpayer had proof that the payment had been received, that tripped the investigation of an “irregularity” in the department, leading to an internal audit and, subsequently, criminal investigation by the Westfield Police Department and Internal Revenue Service criminal investigation division.
The plea agreement requires Duffy to enter into payment plans to reimburse the city for the stolen $110,278 and to recoup the IRS a total of $30,800 based upon the calculation of the additional income tax Duffy should have paid for her ill-gotten gains between 2008 and 2011, when her employment with the city was terminated.
Ponsor released Duffy on her personal recognizance pending the March 2013 sentencing hearing.
“You are a good risk, that you will not attempt to flee,” Ponsor said to Duffy, but also informed her that “jumping bail” is itself a criminal act which carries severe penalties.
Ponsor ordered Duffy to surrender Wednesday to the U.S. Marshall’s Office to be “booked”, finger printed and photographed as part of her formal arrest process, that she accept pretrial supervision and keep the court’s probation office up to date on her address.
To read the plea agreement, click here.