Ulster County
6:05 pm
Fri October 12, 2012

Woodstock fire department treasurer charged with embezzlement

An audit and investigation by the New York State Comptroller into the financial activities of a local Fire Company has ended in an arrest ... Hudson Valley Bureau Chief Dave Lucas reports...


The audit released Friday by State Comptroller Tom DiNapoli reveals that the former treasurer of Woodstock Fire Company No. 3 embezzled more than $200,000 over a five year period: Dale D. Hughes, Jr. was arrested and charged by Ulster County District Attorney D. Holley Carnright with grand larceny in the second degree. The 64-year old Hughes was arraigned before Woodstock Town Court Justice Richard Husted and remanded to the Ulster County Jail in lieu of bail.

Fire department officials contacted DiNapoli's office after questioning Hughes about the check. The Comptroller says Hughes' web of deceit unravelled quickly: the audit and investigation by DiNapoli’s office revealed that Hughes endorsed 83 checks totaling $200,385 that were made payable to cash. Auditors estimate the former treasurer pocketed an additional $21,000 in cash proceeds from various pancake breakfast fundraisers.

The fire company’s executive committee – which consists of the company president, vice president, treasurer, secretary, chief officers, and three directors – was unaware of the fraud until May 2011 when a payment of $10,000 for a new fire truck bay was returned for insufficient funds.

After Hughes was questioned by fire company officials about the bounced check, they contacted the Comptroller’s office about the situation. The former treasurer then attempted to cover his tracks with a series of undocumented deposits into the fire company’s account. These include:

· A wire transfer made on May 24, 2011 into the fire company’s checking account in the amount of $50,000 from the account of Hughes’ sister. · Deposits made to the company’s checking account from Hughes’ personal checking account totaling $68,600 on three separate dates: June 3, 2011 ($60,000), June 20, 2011 ($5,000) and August 31, 2011 ($3,600). · A check for $51,159, dated August 1, 2011, from the Hughes’ checking account used to open a certificate of deposit in the fire company’s name.

It is estimated that Hughes, a resident of the Town of Lake Hill, replaced as much as $170,000 of the missing funds as of July 2012.

DiNapoli’s office made a number of recommendations that, if implemented, would safeguard fire company finances. Specifically, the company’s executive committee should:

· Provide oversight of financial transactions, approve individual invoices and properly monitor the treasurer’s activities. · Review bank records to ensure that transactions match approved disbursements. · Prohibit checks being made payable to cash. · Review all checks that were made payable to cash and take steps to recover any funds not used for legitimate fire company purposes. · Establish procedures to ensure that all funds received from fundraisers are properly accounted for and recorded.

Officials with the fire company agreed with the findings of the audit. Their response is included in the audit, available here as a PDF file.

Woodstock Company 3

Related Program