Hardwick Electric Settles Suit Related To Embezzlement

In this file photo from January 2012, former Hardwick Electric Department office manager Joyce Bellavance arrives at U.S. District Court in Burlington, Vt., for her sentencing. (AP Photo/Burlington Free Press, Glenn Russell)

The Hardwick Electric Department announced the settlement of a lawsuit worth $960,000 related to embezzlement by a former employee.

The suit was against the Certified Public Accounting firm Kittell Branagan & Sargent LTD in St. Albans.

In a statement, HED noted, “This settlement brings closure to the financial harm suffered by HED from the embezzlement of $1.67 million by former HED employee Joyce Bellavance.”

The amount of money embezzled is considered the largest known government embezzlement in Vermont history.

The crime was discovered by other utility staff in 2010. Bellavance was convicted on federal charges in 2012 and sentenced to 3½ years in prison. She had been an employee of the utility for 38½ years.

HED recovered assets worth over $700,000 from Bellavance including luxury vehicles, furniture, jewelry, IRAs, and her Mackville Road home in Hardwick.

Part of the embezzled money, $100,000, went to assist daughters with home purchases. Instead of requiring the forfeiture of their homes, the government agreed to allow each daughter to provide $50,000 to offset the money fraudulently used by their mother.

HED also previously obtained a Vermont civil court settlement for 50 percent of Bellavance’s municipal pension.

“Over the last ten years the HED Board of Commissioners diligently pursued all possible avenues to recover the stolen funds,” HED said in the statement.

The final push was the lawsuit claiming professional malpractice against Kittell Branagan & Sargent in 2016. The firm audited HED’s financial statements from 2006 through 2010 - when over $1.26 million was embezzled, HED noted.

The settlement was reached with the CPA firm with no admissions of accountability by the firm. A message seeking comment was left for Greg Sargent, of Kittell Branagan & Sargent. He did not reply.

“We are very pleased that HED has been able to recover 100% of the moneys that were embezzled,” said Lynne Gedanken HED chair in the statement. “We will now begin the process of evaluating how to use the moneys to provide the greatest benefit to our ratepayers.”

The utility serves about 4,200 customers.

Attorney L. Brooke Dingledine, of the firm Valsangiacomo, Detora & McQuesten, PC, was credited by Gedanken for representing the utility in the civil matters related to the embezzlement.

Dingledine said she has been on the embezzlement case on behalf of the utility for 11 years.

The utility’s lawsuit against the CPA, filed in 2016, initially sought a court order payout of $1.26 million, and the plan was to go to trial in May 2020. The pandemic altered the court plans and the settlement was negotiated.

“We did really well (with the $960,000),” said Dingledine. She said the utility’s case was strong but there is no guarantee of an outcome with a trial. One of the defenses that could have been made before a jury was a claim of contributory negligence against the utility in which case the judgment could have been greatly reduced.

“I’m so satisfied,” she said. “It’s about what was in the public interest and not to risk possibly ending up with nothing.”

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