- Associated Press - Friday, April 18, 2014

MONTPELIER, Vt. (AP) - A former state employee was charged Friday with embezzling more than $50,000 by using what Gov. Peter Shumlin called a “fairly sophisticated” scheme that involved setting up false claims against the state and then using the money that was to pay those claims for her own purposes.

The state charges that Lisa Peduzzi, of Plainfield, used the money to buy guitars, boats, automobiles and jewelry. Officials allege she used a state check to pay her property taxes.

“As governor, there is nothing more disappointing or infuriating to me than a state employee who takes advantage of their public trust and steals taxpayer money,” Shumlin said at a news conference in Montpelier with the head of the state police, the commissioner of the Department of Public Safety and other top state officials.

The investigation is ongoing, and officials said it could be some time before the scope of the case becomes known.

Peduzzi, 51, had worked for the state since September 2006. She resigned this month from her position as a claims examiner in the office of risk management, where she was responsible for paying claims against the state.

It could not immediately be determined if Peduzzi has an attorney.

Public Safety Commissioner Keith Flynn said Peduzzi was arrested Friday afternoon. She was being held at the Chittenden Regional Correctional Facility on $10,000 bail. Her arraignment was scheduled for Monday in Barre.

Investigators have gone back through 2013, and Shumlin said the charges involve 19 incidents in which Peduzzi misdirected state funds for personal gain.

Flynn said the case came to the state’s attention after Peduzzi allegedly tried to buy a guitar with a state check through an online auction site from a man in Michigan. The man became suspicious and contacted authorities.

Flynn alleged that Peduzzi took advantage of her position and apparently fabricated claims within the scope of her work.

State officials planned to go back and examine all the transactions Peduzzi was involved with since she joined the state payroll, even those beyond the six-year statute of limitations.

“Our goal will be not only to determine and identify all criminal acts but also to determine the complete and full amount of restitution that will be due to the state,” Flynn said.

Since this case came to light, the state has changed its practice, and it now requires two signatures on all state payments.

Police said it appears Peduzzi sold some of the items she purchased with state money. Shumlin asked anyone who has done business with her to come forward.

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