How Alleged $1M Embezzlement Was Uncovered: Grand Jury Report

A Lehigh County grand jury report detailed how an alleged embezzlement scheme by former South Whitehall employee Nancy A. Tonkin unraveled. She and her husband, William, a former township police officer, are charged with conspiracy and other charges. 

According to the grand jury report:

—In the winter of 2011-2012, township Manager Jon Hammer restructured jobs and reassigned employees in the Finance Department. He promoted longtime employee Lenore Horos from purchasing agent to assistant director of finance.

—Utility Supervisor Nancy Tonkin was told to stop processing water, sewer and recycling payments and bank deposits and to concentrate more on her supervisory role. She repeatedly ignored the directive and continued to handle cash payments.

—The township offered early retirement packages to several employees. Tonkin, about to turn 65 at the time, refused a generous early retirement package from the township, which surprised township officials. She said she planned to work five more years before retiring.

—After Finance Director Linda Perry took an early retirement package, Horos was promoted to the director's job and became suspicious about several events involving Tonkin.

Among them: Tonkin had exclusive control over the processing of billings and payments for water, sewer and refuse/recycling, and Perry never exericised any oversight. Also, Tonkin was repeatedly told not to open mail payments and process cash payments, but she continued to do so. Tonkin was seen taking mail payments home at night and was ordered by Horos to stop.

—In mid-April 2012, a discrepancy was found in the trial balance of the utility accounts under Tonkin's control. Tonkin denied the discrepancy, but it was later determined that it had been caused by a computer backup of some utility payment accounts.

—As a followup to this computer backup discrepancy, Tonkin was confronted about whether she had entered the mainframe computer room and executed the backup. She denied it but security reports showed she had used her security fob to get into the computer room three times on Saturday, March 17, 2012, of duration periods needed to complete a backup.

—Tonkin and the township Human Resources Director Renee Bickel found that a batch of utility checks totaling more than $37,000 had not been been deposited in a bank. They asked the bank for deposit records and when delivered to the township, Tonkin asked to review them but Horos would not allow it. Tonkin became "overly anxious and nervous" that Horos was overseeing her work.

—In early May 2012, Horos and Bickel alerted township Manager Jon Hammer that "something is just not right here."

—Also in May, residents complained that their water and sewer payments were not being properly credited.

—Horos and township Director of Administration Tony Ganguzza told Tonkin she was being physically moved out of the Finance Department and would no longer have access to the cash drawer and to focus on her supervisor role.

—On May 17, Hammer and the township solicitor brought in a certified fraud examiner to investigate.

—On May 23, when Tonkin's work location was moved out of the Finance Department, she stomped around and treated her co-workers miserably. Two days later, her access to the computer system was terminated.

—On June 6, after Tonkin returned from vacation, she improperly went into a cash drawer in the cashier's office, using another employee's code.

—On June 7, Tonkin was confronted by township officials about her behavior, the $37,000 in missing checks and another $4,536 in missing cash payments handled by her before she went on vacation. Told to find the missing money, she said in anger, "Well, go look in my bank account if you think I have $37,000 in it." She also said she had no idea where the checks were.

Reached later by phone at home, she said, "Good news. I found the money." Asked why she didn't immediately tell Horos, she said, "Oh, I locked it in my desk drawer."

—On June 8, Bickel got to work early to meet with Tonkin, who had a red cloth grocery bag full of more than 1,000 green Refuse & Recycle invoice/billing notices that she was attempting to hide. Tonkin handed over an envelope with cash, saying, "Well, here's the money." She said she could not find the $37,000 in checks. 

—Tonkin was suspended because she did not follow protocol with the money. 

—Several days later, Tonkin retired.

—The township subsequently did a "painstaking review and examination" of utility account records.

— In July 2012, township officials notified Lehigh County District Attorney James Martin about the missing money.

See More on Patch:

New Safeguards Installed Since Alleged Embezzlement

Who to Contact With Questions About Alleged Embezzlement