BENNINGTON — Police say the Arlington Lions Club leaders knew of its former treasurer's alleged embezzlement activities and agreed to a repayment plan before the matter was brought to authorities.
Mary Kerner, 60, of Arlington, pleaded not guilty Monday in Vermont Superior Court Criminal Division Bennington Unit to a felony count of embezzlement. She was released without bail under the basic conditions of informing the court where she lives, coming to future court hearings, and not having probable cause found for more charges.
Kerner is a former treasurer, president, and vice president of the Arlington Lions Club, having joined in 1998. She is accused of taking $18,560 in Club funds.
According to an affidavit by Vermont State Trooper Lauren Ronan, on May 5, 2015, she spoke to Susan Jennings, who at that time was the Club's treasurer. Jennings reported finding unauthorized purchases on some of the Club's bank accounts. She believed these were made by Kerner.
According to Jennings, Kerner admitted to other Club members that she had misused $6,500 of the Club's scholarship fund. Jennings said all of the money in this fund comes from fundraising events and donations.
On June 24, 2015, Kerner met with police and admitted to taking $6,500 in Club funds because she had fallen beyond on her mortgage payments and her mother was ill. She intended to pay the money back, and borrowed $2,000 from friends in order to do this, but said she has only returned $1,200
Kerner told police she met with the Club's board of directors and together they agreed to a repayment contract calling for Kerner to pay back the money at the rate of $100 per month. She was unable to produce said contract.
In March of this year, police met with James Erickson, who was Club president during the time Kerner was treasurer. He said that several years before, Kerner approached the board and admitted to misappropriating funds from the Club because her house was under foreclosure. He believed the amount taken to be around $6,000.
Erickson told police that he and the other board members collectively decided not to bring the matter to police and to have Kerner slowly repay what she had taken at the rate of $100 per month, shortened later to $50 per month. Kerner was relieved of her duties as treasurer but remained active within the club.
Erickson told police that the Club had, for years, not been documenting its funds properly and that it was possible Kerner had misappropriated more.
On April 7, police spoke to Nick Monte, the current Club president, who was on the board during the period Kerner was president. He said that before the board learned Kerner had taken funds, it underwent a reorganization. He said that after the reorganization, Kerner came to him and admitted to taking $8,000 in Club money.
Monte said the original amount Kerner was to pay per month was $200, but it was changed to $50. He said there was no signed contract with Kerner regarding this payment plan. He said the scholarship fund had $10,000 at its peak, much of which was depleted by Kerner. Flooding during Tropical Storm Irene in 2011 destroyed most of the Club's records on how money came to be in the scholarship fund, according to Monte.
He said Kerner's checks to the Club read "repayment of loan," however no one on the board agreed to calling this a loan. He said she has since paid back $2,000.
In an interview, Jennings told the Banner she uncovered discrepancies in the Club's scholarship fund shortly after she became treasurer in 2014. She said the paper trail was fairly easy to follow and after talking about it with a friend and fellow Club member she brought it to the board's attention.
According to Jennings, board members told her they knew nothing of the matter, then told her not to pursue it further. She consulted with police, who took over the investigation, then she quit the Club.
"I could not be involved with such things going on in that Club," she said.
A message left with Monte was not returned Monday. The Banner was unable to reach Erickson for comment.
— Contact Keith Whitcomb Jr. at 802-447-7567 Ext. 115