For Immediate Release - May 06, 2010

Former Chief Financial Officer of Local Museum Pleads Guilty in Connection with Theft of Over $1.3 Million

WORCESTER - The former chief financial officer of a local museum pled guilty in connection with embezzling more than $1.3 million from the institution. Peggy Kempton, age 53, of Hollis, New Hampshire, pled guilty yesterday afternoon 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. Kempton will be sentenced on June 9, 2010, before Judge Richard T. Tucker in Worcester Superior Court.

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.

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. Yesterday, Kempton pled guilty to all charges. She is scheduled to be sentenced on June 9, 2010.

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.