Ex-Mass. museum CFO gets up to 5 years in prison

WORCESTER, Mass. – The former chief financial officer of a local museum has been sentenced to serve time in state prison in connection with embezzling more than $1.3 million from the institution, Attorney General Martha Coakley announced on Monday.

On May 5, 2010, Peggy Kempton, age 53, of Hollis, New Hampshire, pled guilty in Worcester Superior Court to charges of Larceny over $250 by Single Scheme (14 Counts), Fraudulent Use of Credit Cards (3 counts), and False Entries in Corporate Books. Today, Judge Richard T. Tucker sentenced Kempton to serve three to five years in State Prison, followed by ten years of probation. While on probation, Kempton must stay away and avoid all contact with her former employer and notify any future employers of her conviction. Judge Tucker also ordered that Kempton make full restitution in the amount of $1.3 million to the museum.

“This defendant abused her position of trust to defraud her employers and misuse charitable funds for her own personal gain,” AG Coakley said. “With today’s sentence she has been held accountable for her actions and has been ordered to pay full restitution back to the charity.”

In September 2008, the Attorney General’s Office began an investigation after Kempton’s activities were reported by her former employer. From July 1997 through February 2008, Kempton worked as the Deputy Executive Director and Chief Financial Officer (CFO) for the museum. Her duties as CFO included managing the institution’s accounts payable and receivable, payroll and general ledger. On numerous dates between January 2002 and February 2008, Kempton stole funds from her employer to pay for over $1.3 million in personal purchases that Kempton and her children made using 14 different credit cards. One of the credit cards was in the name of a co-worker who had no knowledge that the card existed and was being used by Kempton.

Kempton also used “cash advance checks” from credit cards in the names of three co-workers to pay for personal purchases that Kempton made on her own credit cards. Kempton did this without the knowledge or authorization of the co-workers. Investigators also discovered that Kempton manipulated the financial records of her employer to make it appear that the employer’s funds that Kempton used to pay for personal purchases and other expenses were being used for legitimate expenses. Kempton reportedly spent the money she embezzled on antiques, trips, jewelry, and even college tuition.

A Worcester County Grand Jury returned indictments against Kempton on June 19, 2009. At that time, the indictments were sealed and a warrant was issued for Kempton’s arrest. Kempton surrendered herself to authorities on June 23, 2009, and was arraigned in Worcester Superior Court where she pled not guilty and was subsequently released on $5,000 cash bail. On May 5, 2010, Kempton pled guilty to all charges. On June 28, 2010 she was sentenced to serve three to five years in State Prison.

The case was prosecuted by Assistant Attorney General Brendan O’Shea for the Attorney General’s Corruption and Fraud Division. It was investigated by Financial Investigators Jessie Dean and Jim McFadden of the Financial Investigations Division, and Massachusetts State Police assigned to the Attorney General’s Office.

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