New York public workers stole $30M over the past 3 years, auditors find

About once a week for five-and-a-half years, Brenda Kennedy left her Rensselaer County office with more than $800 in her lunchbox. No one else knew; not even her husband.

By the time her crime was discovered in August 2012, Kennedy had stolen $208,597 from her job as a clinical billing clerk for the county Department of Public Health. Last month, she admitted she swiped the money on a near-weekly basis starting in January 2007.

She awaits sentencing.

Kennedy's initial motivation to steal was simple.

"I was getting ready for Christmas and I didn't have enough money to give my kids the best Christmas," Kennedy told investigators. "No one was reviewing my paperwork at work."

Kennedy's case provides a snapshot of government workers who steal from the public. Prosecutors say the scenario has become all too familiar in public offices across the state.

"They dip their toe in the pool when they might get a little behind in their rent and they realize 'Holy cow, I can get away with this,'" Nelson Sheingold, deputy comptroller and counsel for investigations with the state comptroller's office, tells the Albany Times Union.

New York's comptroller and attorney general have formed a team of auditors and prosecutors to ferret out the embezzlement and file criminal cases against the thieves. In Kennedy's case, the comptroller's office examined the records and the Rensselaer County district attorney's office prosecuted the case.

Restitution agreements are often inked, but it can take years of criminal and civil litigation for the victims — taxpayers — to be repaid. In some cases, the money never comes back.

It is a common thread in embezzlement cases that defendants have a hard time coming up with the restitution because their criminal records make it very hard to land well-paying jobs.

An examination of arrests and prosecutions by the comptroller and attorney general, as well as cases in county courts between 2011 and 2014, revealed the embezzlement of some $30 million of taxpayer money.

State auditors say there have been 80 arrests in the past three years, with the culprits typically taking small amounts when they start. As they get away with it, the temptation of free money becomes more enticing. Many told investigators that at first they planned on paying it back.

"We see some who were doing it for a decade or more, so they think they will never get caught," Sheingold said.

Kennedy's attorney, George LaMarche, said his client quickly realized she was getting into trouble and feared she'd be exposed.

"She feels tremendously remorseful," LaMarche said. "It's also had a terrible impact on her family and children."

Kennedy and dozens of others who have been caught said they were able to steal because they were not closely supervised. Their thefts have been brought to light by anonymous tipsters and co-workers who unearthed financial discrepancies. State auditors also uncover embezzlements during scheduled governmental audits, officials said.

Some embezzlers go on spending sprees, while most use the money for day-to-day expenses, electronics, bills, rent, jewelry or even online dating services.

A village clerk in Suffolk County used part of the $60,000 she took to pay for her divorce. A fire department president in Hudson who embezzled $34,000 spent $4,100 of it on pornography.

A Bronx medical subcontractor, who billed the state for thousands of hours he did not work, including several instances in which he was paid for working more than 24 hours in a day, stole a total of $721,000 in public funds. He took overseas vacations, shopped at high-end clothing stores and frequented casinos.

The offenders are often trusted employees who have positions with little oversight from senior staff, according to a review of audits and court cases. They steal incoming cash payments for building permits, dog licenses, tax-penalty payments and sometimes even money donated to support the local Little League park.

After a review of 63 cases dating to 2012, it appears that more than half the thieves are lower-level employees, and a smaller percentage are supervisors, elected officials and contractors doing business with local or state government.