Ex-clerk embezzled $927,000
FEDERAL COURT PLEA: Wagner-Dano admits to thefts involving two dairy co-ops and town of Lewis
By DAVID WINTERS & STEVE VIRKLER
TIMES STAFF WRITERS
TUESDAY, APRIL 20, 2010
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A former Lewis town clerk and dairy cooperative bookkeeper confessed Monday in federal court to embezzling money from the town and two cooperatives.
Melissa L. Wagner-Dano, 33, Fish Creek Road, West Leyden, pleaded guilty in U.S. District Court, Syracuse, before Chief Judge Norman A. Mordue to wire fraud, federal court documents show. She could receive up to 20 years in federal prison at her sentencing Aug. 16.
Federal prosecutors said the losses were estimated at about $927,000 to three groups: the Oneida-Lewis Milk Producers Cooperative ($642,540.67), the Boonville Farm Cooperative ($33,861) and the town of Lewis ($250,614.67).
No other suspects are being investigated in the case, prosecutors said.
"These were not large organizations," Assistant U.S. attorney Edward R. Broton said. "There was a significant financial hit to them as a result of this."
Defense attorney George F. Hildebrandt, representing Ms. Wagner-Dano, told the court he needed some time to confirm those figures before agreeing to a restitution amount, Mr. Broton said.
The defendant hasn't repaid any money yet, and it's unknown what the stolen funds were used for, he said.
Ms. Wagner-Dano, 33, Fish Creek Road, formerly worked as a bookkeeper for the Oneida-Lewis Milk Producers Cooperative and the Boonville Farm Cooperative. She was appointed town bookkeeper in 1998 and was elected town clerk in 2000.
While Ms. Wagner-Dano chose not to run for re-election in 2005 to seek the District 10 seat on the Lewis County Legislature, she continued to serve as town bookkeeper.
She defrauded the town and dairy cooperatives from Jan. 1, 2007, through Dec. 1, 2009, court records show.
The case stems from a nearly half-year probe by the U.S. attorney's office and the Federal Bureau of Investigation.
"It's unfortunate for our farmers that this happened," said Michael Kraeger, president of the 18-farm Oneida-Lewis cooperative, noting that low milk prices are making it tough enough for farmers without additional shortfalls. "We hope we can gain some restitution."
Mr. Kraeger said his wife, Lisa, an accountant, has taken over the cooperative's bookkeeping duties, helping to conduct an internal investigation and bring the organization back "on our feet."
Michele E. Ledoux, executive director of Cornell Cooperative Extension of Lewis County, said her agency has offered to assist affected dairies with financial planning, as is available to any county farmer. State Department of Agriculture and Markets officials have indicated they could provide some form of assistance to the cooperative, but only after completion of the federal investigation.
Mr. Broton said cases like this occur "usually because of a lack of checks and balances at an organization."
Ms. Wagner-Dano in April 2009 set up an Intuit Quick Books payroll program for the town and, using fictitious payroll accounts, transferred money from the town's account to the dairy cooperatives' accounts, then withdrew that money, the U.S. attorney's office alleges. She allegedly wrote checks from the Oneida-Lewis Milk Producers Cooperative payable to Melissa Dano and signed them as Melissa Wagner.
In May, she made a wire transfer of $29,996.01 from the town to the Oneida-Lewis cooperative through Intuit computer servers in Reno, Nev., leading to the wire fraud charge, court documents state.
In a letter dated Oct. 29, she told the Boonville Farm Cooperative board of directors that the "unauthorized transfers" from its bank account happened because her computer system crashed, according to court documents.
Ms. Wagner-Dano "well knew her computer did not crash and the unauthorized fraudulent transfers were knowingly and intentionally made by her," according to court papers.
Judge Mordue released her on several conditions, including that she not travel outside the Northern District of New York without court approval.
The Boonville cooperative has 39 farms in Oneida, Lewis and Herkimer counties, while the town of Lewis has about 800 residents.
Mr. Hildebrandt and Lewis Town Supervisor Dawn M. Zagurski could not be reached for comment Monday.