NORWICH — Town officials have brought back the town’s former finance director to help with day-to-day operations as authorities continue to investigate what they are now calling a “business email compromise” scam involving Norwich’s general fund.
And in an email post to the listserve early Thursday morning, the Selectboard said “an employee has been placed on paid administrative leave pending the outcome of the investigation,” though did not specifically identify the worker.
Earlier this week, Norwich Town Manager Herb Durfee declined to comment on the employment status of Donna Flies, who began as Norwich finance director in June, but said the town has retained Roberta Robinson to serve in a “short-term, contracted capacity to assist the Finance Department’s day-to-day operations during this period of investigation.”
Robinson retired in June and was replaced by Flies, who according to her Facebook page is from Williamstown, Vt., and co-owned the Billtown Barbecue restaurant there with her husband. The restaurant closed several months ago. Flies was not in the office on Wednesday and could not be reached for comment.
In the listserve post early Thursday, the Selectboard said Norwich police and federal authorities are investigating “what has been labeled a ‘Business Email Compromise’ (BEC) scam. They have confirmed that there were transactions, all within the past month, that were not properly authorized where monies were transferred out of the town’s general fund.”
The post said the town “has accordingly modified both financial and IT procedures to mitigate future occurrences,” as well as placing the employee on leave.
Norwich Police Chief Jennifer Frank last week said the financial activity appears to involve electronic transfers from the town’s general fund but declined to say how much might be involved.
Norwich officials first learned of the matter last week after longtime Treasurer Cheryl Lindberg noticed the activity and brought it to their attention.
Minutes from the Aug. 28 Selectboard meeting indicate officials met in executive session for more than an hour “regarding a personnel matter.” Lindberg and Durfee were present, Flies was not.
At a special Selectboard meeting Tuesday night, town officials met again in executive session for more than two hours on the matter, with Lindberg, Durfee, Frank and the town’s attorney invited to attend.
Before the board went into the closed-door meeting, Durfee and Frank said that because it is an active investigation, they could not provide details.
Frank said her department is “actively” working with FBI offices in Rutland and Albany, N.Y., multiple banks and “multiple individuals” involved.
“We are trying to identify the parties involved and have made significant progress in the last 24 hours,” Frank said.
Town officials have not said publicly how much money was involved or whether it can be recovered. The town has contacted its insurer, the Vermont League of Cities and Town.
When the board came out of executive session Tuesday night, members authorized Selectboard Chairman John Pepper to issue the news release, which was released early Thursday.
Pepper last week released a statement that said, in part, “Town officials noticed unusual financial activity that was taking place in real-time. That activity has been referred to the authorities and is being investigated.”
Norwich has a $4.7 million municipal budget.
This story was updated at 7:50 a.m. Thursday. News editor John P. Gregg contributed to this report. Patrick O’Grady can be reached at pogclmt@gmail.com.
