Mathews Fire Department volunteers were glad to see justice done Monday, when Judge R. Bruce Long found former treasurer Paul Reardon guilty of embezzling the department’s funds and ordered him sent to jail, but they wonder if $200,000 is just the tip of the iceberg.
Reardon always conducted the fund drive himself, said Tomlinson, so "we don’t know what we’ve had or what we’ve missed." A number of times over the past 10 years or so, fire department members brought up the idea of having the books audited, said Tomlinson, but Reardon was always against it, he added. At one time, the board even appointed a couple of people to help Reardon with the treasurer’s job, but he wouldn’t let them get involved, said Tomlinson.
A retired state trooper, a former magistrate for the court, and an apparently upstanding citizen who was involved in numerous non-profit organizations, Reardon was well respected and trusted by everyone in the fire department, said Tomlinson, so members always deferred to him.
"Nobody wanted to hurt any feelings," he said. "And it’s one of those things you think happens to other people. ‘This couldn’t happen to us—we have a retired state trooper here.’"
Besides, said Morgan, there always seemed to be enough money to take care of the department’s business.
"I don’t remember a year when we operated in the red," he said. "We always had money to pay the bills."
It wasn’t until Reardon became ill last year and had to go in the hospital that the truth began to come to light. Then-president Danny Howlett, who is also the Mathews County Sheriff, took charge of retrieving and depositing fund-drive donations while Reardon was sick.
With bank records in hand, Howlett began to see that the balances on the deposit slips didn’t correspond to the balances Reardon had reported at the November and December 2009 meetings. Suspicious, Howlett told the board what he had found, and Morgan went to the county’s two banks—Chesapeake Bank and Bank of America—to try to reconcile the discrepancies.
On the very day Morgan visited Chesapeake Bank to try to secure the account there, while he was talking with bank employees, Reardon came in and made a withdrawal "under my nose," said Morgan.
Immediately afterward, Morgan went to Bank of America to see if Reardon had deposited the money he had just withdrawn into the fire department’s account there, and the bank employee said no. In fact, Reardon had been there, but he had withdrawn money, for a total of $5,000 from the two banks "in five minutes’ time."
"That’s when everything fell in place and we knew what we had to do," said Morgan.
As soon as it became clear to board members that there was a problem, they "went full-steam ahead to solve it," said Tomlinson. Howlett reported the matter to the state police, which launched its own investigation and conducted a forensic audit. The results were so irrefutable that Reardon eventually admitted to embezzling $216,500 from the department. The commonwealth came up with a higher figure—$221,000—and Reardon was convicted of embezzling "over $200,000." (See related story.)
While they suspect that the theft had been going on longer than two years, Morgan and Tomlinson said they didn’t intend to try to find anything more. The only way they could do so would be to hire someone to further examine the records, said Morgan, and "chances of getting the money back are very, very slim."
The department’s volunteers "don’t know what we had or what we’ve lost," said Tomlinson. "It’s been a difficult six months. We’ve basically had to start over financially and figure out everything from scratch."
Asked what they have to say to county residents who contributed money and might no longer trust the fire department to handle its own finances, Tomlinson and Morgan said that since the theft occurred the department has elected a new treasurer, Michael Callis, and has enacted a broad range of changes in its financial practices.
Two people now have to be on hand to open all mail and two people have to count any money that comes in, Morgan said. In addition, all members have access to the financial records at every meeting via online banking, so "there’s not another set of bogus figures." Finally, the county has instituted a yearly audit requirement for all non-profit organizations that receive $30,000 or more in contributions.
"It’s gonna be daggone tough to pull one on us now," said Morgan.
Tomlinson pointed out that such things happen often in the world of finance, with banks, churches, and even Mathews County itself among the victims. He said that every county resident who paid taxes the past two years was affected by the crime because of the money donated from county coffers. He and Morgan said all they could say to county residents was that they’re sorry.
"That doesn’t go very far," said Morgan. "We all learned a hard lesson. We’ve got a lot of questions, but they’ll never be answered."
Anyone who would like a copy of the fire department’s new financial policy may pick one up at Tomlinson’s business, Mathews Lawn and Garden at Ward’s Corner.