Former Hospital Secretary Arraigned in Connection with Allegedly Stealing Over $200,000 in Check-Lapping Scheme
Diane Thistle, age 63, of Beverly, was arraigned in Salem Superior Court on charges of Larceny over $250 and Making False Entries in Corporate Books.
In April 2010, the Attorney General's Office began an investigation into Thistle's alleged activities after the matter had been referred by Beverly Hospital and one of the hospital's vendors, Sodexo, Inc. Thistle was an administrative assistant at Beverly Hospital for over 14 years, and one of her duties was to oversee the processing of checks and cash generated by the food services division. In the spring of 2009, the hospital decided to stop using Sodexo to manage its food services and the two parties began the process of settling their account. Sodexo's records showed that invoices to the hospital totaling hundreds of thousands of dollars remained open. The hospital's records, however, showed that those invoices had been paid in full. After this discovery, Sodexo immediately initiated an audit of the account.
Authorities allege that Thistle stole money from the account using a "check-lapping" scheme. Investigators discovered that Thistle allegedly stole cash that came to her from the cafeteria revenue and then replaced the stolen cash with older checks that the hospital intended as payment for catering. When the amounts did not perfectly match, Thistle would insert her own personal checks into the deposit to balance the amounts. When the hospital paid Sodexo, Thistle received the check and arranged for its deposit into the vendor's food services bank account. Thistle would then access Sodexo's cafeteria records and fraudulently change the entry for that day's cash intake. She allegedly entered a new amount that equaled the catering invoice. Thistle would then pocket some or all of the cafeteria cash, but deposit the hospital's catering check as if it were the cafeteria cash. As a result, Beverly Hospital's records would show it had paid its catering bill, while Sodexo's records would falsely show that the deposit was for cafeteria revenue. At a later point, Thistle would pay the open catering invoice with an older catering check from the hospital, and use her own personal checks to balance the amounts if necessary. Authorities allege that between 2005 and 2009, Thistle stole over $200,000 from Sodexo and used those funds for her own personal use.
An Essex County Grand Jury returned indictments against Thistle on June 30, 2010. She was arraigned yesterday before Superior Court Judge John T. Lu where she entered a plea of not guilty and was released on personal recognizance. She is due back in court on August 17, 2010 for a pre-trial conference.
The case is being prosecuted by Assistant Attorneys General Marc Jones and David Waterfall, both of Attorney General Coakley's Corruption and Fraud Division, and was investigated by financial investigators Davin Lee and Jessie Dean and members of the Massachusetts State Police. Beverly Hospital and Sodexo, Inc. cooperated fully with the Attorney General's investigation.