NORWAY – KeyBank may have allowed then-Community Development Director Deborah Wyman to deposit thousands of dollars worth of checks not made out to her into her personal bank account, according to a recently completed forensic audit of missing public money.
Town Manager David Holt said the Main Street bank branch released subpoenaed records to investigators showing that the former town employee accused of embezzling thousands of dollars from the town may have deposited as much as $25,000 during the past several years from checks signed to others.
Holt said he suggested that KeyBank help cover the town’s investigation expenses.
Officials at KeyBank in Norway and at the bank’s corporate headquarters in Cleveland, Ohio, declined comment on the case when contacted by the Sun Journal Monday.
“At this point I can’t confirm or deny anything,” said Rachael Hiatt, a spokeswoman for the bank in Cleveland. Hiatt said she had no knowledge of the situation in Norway. A local executive for the bank, who asked that her name not be used, also said repeatedly the bank would not comment on the case Monday. Hiatt said executives in Cleveland may comment today but made no guarantee of that.
“In the world I would paint to be a better world, KeyBank should offer and come forth and pay for the investigation,” Holt said Monday. “It is due in some part by their allowing this to happen.”
Auditing and attorney bills resulting from the case are costing Norway around $40,000. Townspeople voted last week to use surplus funds to pay the bills until the town receives either restitution or insurance money.
Wyman was charged in March with stealing at least $10,000 in federal grants from January 2003 to January 2006. She pleaded not guilty to the felony charge of theft and is free on a $2,500 cash bail.
She worked part time as Norway’s community development director starting in 1986, overseeing $5 million in grants from the federal CDBG program.
Holt announced last week that the audit, which took more than two months to complete, showed more than $100,000 has been taken from the town since the early 1990s.
The audit was delayed because subpoenaed records from KeyBank were slow to come, Holt said.
The checks Wyman reportedly deposited were made out to various people, such as recipients of CDBG grants, as well as to the town of Norway under a couple different official titles, he said.
The checks were not endorsed over to Wyman, Holt added.
The audit also found that Wyman may have used several alleged forgery methods, including falsifying some checks, Holt said.
Many of the transactions were carried out through an ATM machine, Holt said.
Donald Groves, a bank regulator with Maine’s Bureau of Financial Institutions, said Monday that banks are required by law to file suspicious activity reports if employees detect any unusual transactions in certain accounts.
Banks file the reports with the Financial Crimes Enforcement Network, which are then picked up by law enforcement agencies, such as the FBI or IRS, Groves said.
At that point, a bank’s obligation ends.
But banks also have the option of terminating an account.
“If they don’t like the activity going on with the account, and it involves potential exposure to them, they can close it or not,” Groves said.
It wasn’t clear whether Wyman’s account ever triggered a report by KeyBank seeking an investigation by a federal agency. Because customer records are confidential, KeyBank could not report any information to Norway even if bank officials were concerned, Groves said.
Had the FBI or IRS investigated and found wrongdoing, federal officials could have filed charges at the federal court in Portland. No charges against Wyman are on file there, according to a court clerk.
Suspicious activity reports can result in no action, depending on the priority or prominence of the case.
“Thousands and thousands of these things are filed nationwide,” Groves said. “Since 9/11, financial institutions and brokerage accounts are filing big time,” as anti-terrorism and anti-laundering pressures increase, he said.
Holt said following the resolution of the criminal case against Wyman, he will discuss with selectmen possible civil action against KeyBank.
KeyBank is a national bank regulated by the Office of the Comptroller of the Currency, an agency within the United States Department of the Treasury.
Groves said that federal regulators can fine banks for not picking up on suspicious financial transactions. Many banks use automatic security systems to detect questionable patterns.
Also, ATMs might make it easier for dubious transactions to slip through the cracks, Groves said.
“Tellers really still have a better shot than even a computer of catching this stuff,” Groves said.
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