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Michael W. Heller (Banner file)
Michael W. Heller (Banner file)
Michael W. Heller (Banner file)

BENNINGTON -- The former principal of Readsboro Elementary School pleaded not guilty Monday to allegations that he diverted $4,000 in grant money to his personal uses and took lunch money students had turned in to the school's secretary.

Michael W. Heller, 40, of Fairfax, pleaded not guilty Monday in Vermont Superior Court to a felony count of embezzlement, and petit larceny. He was released under the condition he not go to the school. He had been the school's principal for two years.

According to an affidavit by Vermont State Trooper Lauren Ronan, on Dec. 19 Readsboro Elementary School interim Superintendent Richard McClements contacted police to say he and the school board suspected Heller of embezzlement. He and the district business manager, Karen Atwood, met with Ronan and turned over the results of their own five-week investigation.

According to Atwood, she began to suspect Heller when conducting a school audit. The school had been awarded three grants, which Heller applied for and deposited into a "Principal's Account" at the People's United Bank. This account was unknown to anyone at the school's central office and had not been authorized. The account's existence was discovered when a donation check for $94 from Target Corp. was mistakenly put into the "Readsboro School Activity Account." Atwood discovered $6,094 had been deposited into the principal's account and what appeared to be personal purchases made from it.

Atwood confronted Heller about the account and asked him to provide invoices, which took him several weeks to produce.

The account contained a $5,000 grant from Lowes Corp. to be used for security improvements. Macy's Corp. donated $1,000 to pay for a production of "Yes, Virginia," while Target had donated $94 for miscellaneous purchases.

Readsboro Town Clerk Amber Holland had been given the invoices provided by Heller and asked to check them as a neutral party. Holland told police she got the original invoices from each vendor, and found they did not match what Heller provided.

According to the affidavit, on May 15, Heller made a purchase from Lorex for $1,499 in equipment. This was according to Heller's documents. Lorex, however, showed the purchase was only for $464. Another purchase on June 6 from Qualified Hardware indicated Heller made a purchase for $2,590. Qualified Hardware's documents show it was only for $763. A third transaction was on Dec. 10, for $937 from Amazon. The item was a headset, and according to Amazon's records cost only $159.

Ronan wrote that Heller's invoices also appeared different from the ones obtained through their respective companies, not just the dollar amounts but the layout and formats as well.

There were other purchases from the account, according to Ronan. Two occurred in May, each for less than $100 at Rite Aid and Anchor Seafood. There were 17 withdrawals made in June, with 10 being $100 or more. They were from Pet Meds Corp., Walmart, and Days Inn Hotel. Six were for under $100, made at Home Depot, Shell Oil, Exxon/Mobil, Dunkin' Donuts, Prince Chopper, and Christmas Tree Shops. The Qualified Hardware purchase was made during this month.

In July, Heller made 18 transactions through the account. Thirteen were from Price Chopper, and gas stations for under $100. Four were for more than $100 made at Killington Lodge, and one was for the school, made with Adams Lock and Key for $297.

Heller made nine transactions in August, four being cash withdrawals of more than $100. The others were for under $100, made at Price Chopper and gas stations. In September, six transactions were made, all for under $100 made at gas stations and Rite Aid.

In October, there were 15 transactions, and another six in November, all similar to the others. The account was closed Dec. 13.

Ronan wrote that $4,536 was spent on personal things, while $1,060 went to security equipment for the school.

Police also spoke to school Secretary Patricia Kidney, who said in the 2012/2013 school year there had been an issue regarding missing lunch money. She said common practice had been parents would drop their children's lunch money off at her desk, where she would keep it. She said about $200 total was missing over the course of the year. Kidney said it would often be a few dollars short, which she would make up by putting her own cash in.

Kidney asked Heller about it, and was told not to worry about it because a bookkeeping program would sort it out. Kidney did not understand how, and told police there were a number of odd instances surrounding the lunch money that made her think Heller was responsible, including an empty envelope she found in his desk allegedly from a parent who had put $20 in it for their child's lunch.

Ronan said here were other small thefts reported around the school.

Heller came to the State Police barracks in Shaftsbury on Jan. 6, accompanied by a family member and his attorney, David Silver of the Bennington firm Barr, Sternberg, Moss, Lawrence & Silver. Heller admitted to misusing the grant funds and forging invoices to make the account look balanced. He said he took the money because he suffers health problems, as does his mother, and to pay off $1,500 in outstanding motor vehicle fines she had incurred. He said he planned to return the money via a lawn care business he would run over the summer.

Heller denied taking any lunch money, as well as responsibility for the other thefts reported at the school.

Ronan said she contacted Heller's previous employer, North Carolina Public School System, and spoke to Ron Villines, Heller's former supervisor. Villines told police Heller managed an expensive school trip where he allegedly did not follow protocol and some money went missing.

"He voluntarily came in and made a full and honest statement to police," said Silver in an interview Monday. "He is prepared to pay back the money he improperly borrowed."

Silver said his client's medical bills, as well as his mother's, made him desperate.

"The allegations about lunch money are outrageous and false," Silver said, adding that there is no evidence to show Heller took it, and that the person who was responsible for that money should be the prime suspect in its disappearance.

Silver said the police information about Heller's previous job, as a math teacher, is likewise irrelevant. "We have no information that any money was missing, and we have no information that he was ever suspected of that," said Silver, adding that Heller received a "glowing" recommendation from his previous employer when he began at Readsboro Elementary School.

Contact Keith Whitcomb Jr. at kwhitcomb@benningtonbanner.com or follow him on Twitter @KWhitcombjr.