For Immediate Release - August 26, 2009

Former Accountant Pleads Guilty, Sentenced for Stealing Over $202,000 From Her Former Employer

Woman Also Convicted of Stealing More Than $12,000 in Unemployment Benefits

WORCESTER - A Worcester woman pled guilty in Worcester Superior Court yesterday to stealing over $202,000 from her former employer while working as the company's financial controller. Karen Peryea, age 44, pled guilty to the charges of Larceny over $250 by Continuous Scheme (2 counts), Unemployment Fraud (19 counts), Fraudulent Use of Corporate Credit, and Making False Entries in Corporate Books. Immediately after the plea was entered, Superior Court Judge John S. McCann sentenced Peryea to serve 18 months in the House of Correction, 30 days to serve, with the balance suspended for a probationary period of five years, on one count of Larceny over $250 by Continuous Scheme. On all of the remaining charges, Judge McCann ordered that Peryea serve five years of probation, upon the completion of her House of Correction sentence. While on probation, Peryea must: pay $12,225 in restitution to the Department of Unemployment Assistance; pay $5,000 in restitution to her former employer; disclose her convictions to any potential future employers; forfeit her rights to any property seized during the investigation; and pay nearly $2,300 to the Commonwealth for prosecution costs.

In August 2008 the Attorney General's Office began an investigation after Peryea's former employer, a manufacturing company in Shrewsbury, brought her activities to the office's attention. Between December 2006 and September 2007, Peryea worked as the company's financial controller, where she oversaw the company's bookkeeping and invoicing. During this period, Peryea fraudulently used her company-issued credit card to take cash advances and make unauthorized personal purchases. Items seized during a search executed by Massachusetts State Police assigned to the Attorney General's Office at Peryea's residence included an elaborate fish tank, riding lawnmower, large flat screen television, two all-terrain vehicles, tournament pool table, and multiple home furnishings. Peryea secretly used company funds to pay for the cash advances and personal purchases made on the credit card, hiding the unauthorized payments by fraudulently entering the payments into the company's computer system as shipping expenses. In September 2007, Peryea was laid off before the company became aware of the scheme. After the discovery of Peryea's fraud, Peryea's former employer contacted the Attorney General's Office. In total, Peryea stole approximately $202,000 from her former employer. All but $5,000 of the theft was reimbursed by insurance, with Peryea ordered to pay restitution to her former employer for the uncovered balance.

While unemployed, Peryea began receiving regular unemployment payments from the Department of Unemployment Assistance (DUA). Investigators discovered that even though she later found a new full-time job, Peryea continued to certify to the DUA that she remained unemployed. During the period of January 2008 through May 2008 she fraudulently received 19 checks from the DUA totaling over $12,000 in unemployment benefits to which she was not entitled.

A Worcester County Grand Jury returned indictments against Peryea on March 19, 2009. On April 9, 2009, she was arraigned in Worcester Superior Court where she entered a plea of not guilty and was released on personal recognizance . Yesterday, Peryea entered a change of plea to guilty and was sentenced.

The case was prosecuted by Assistant Attorney General David Waterfall of Attorney General Martha Coakley's Corruption and Fraud Division. The case was investigated by Financial Investigator Sallyann Nelligan, as well as State Police assigned to the Attorney General's Office. Investigators from the DUA also assisted in this case.