For Immediate Release - June 23, 2009

Former Chief Financial Officer of Local Museum Indicted, Arraigned in Connection with Allegedly Stealing Over $1.3 Million From Former Employer

WORCESTER - Today, the former chief financial officer of a local museum turned herself in to authorities after a Worcester County Grand Jury returned indictments against her in connection with the alleged embezzlement of more than $1.3 million from the institution. Peggy Kempton, age 53, of Hollis, New Hampshire, was arraigned in Worcester Superior Court on charges of Larceny over $250 by Single Scheme (14 Counts), Fraudulent Use of Credit Cards (3 counts), and False Entries in Corporate Books.

In September 2008 , the Attorney General's Office began an investigation after Kempton's alleged activities had been referred 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. Authorities allege that on numerous dates between January 2002 and February 2008, Kempton allegedly 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 allegedly 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 allegedly did this without the knowledge or authorization of the co-workers. Investigators also discovered that Kempton allegedly 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.

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 today, was arraigned in Worcester Superior Court, where she pled not guilty and was ordered held on $5,000 cash bail. Pending her release on bail, Superior Court Judge James Lemire ordered that Kempton must surrender her passport, report to probation three times a week by phone and once in person every 14 days, and she cannot leave Massachusetts or New Hampshire without first reporting to probation. She is due back in court on July 22, 2009, for a pre-trial conference.

The case was referred to the Corruption and Fraud Division of Attorney General Martha Coakley's Office, and is being prosecuted by Assistant Attorney General Brendan O'Shea. 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.