Suspect Arrested in Fla. on Suspicion of St. Mary Embezzlement

By Chris Engle
Gaylord Herald Times
August 12, 2008

GAYLORD — The woman officials believe embezzled $295,000 from St. Mary Cathedral over a 2 1/2-year period was arrested Friday in Florida.

Those stolen funds include donations to the church and school tuition, as well as fundraiser and event proceeds.

Though local officials decline to identify the suspect, staff at Volusia County Branch Jail in Daytona Beach, Fla. confirmed Shelly Jean Patterson, 44, was arrested Friday on a fugitive of justice warrant out of Michigan. A letter sent Friday by the Diocese of Gaylord to parishoners of St. Mary Cathedral said the parish's former business manager, Shelly Patterson, had "recently been arrested" as a result of an investigation into embezzlement of approximately $295,000. The letter states Patterson had resigned in September 2007 to accept an out-of-state position. Read the letter

Shelly Jean Patterson

During a press conference Monday, Gaylord City Police Chief Joe FitzGerald and Otsego County Prosecutor Kyle Legel said an arrest was made without incident Friday by the Port Orange Police Department in Florida on a warrant their offices filed only an hour earlier in Otsego County. See a more in-depth video and transcript from the press conference

The suspect is charged with five felonies, including one count of embezzlement of $100,000 or more, a 20-year felony; and two counts each of forgery and uttering and publishing, 14-year felonies. Legel said the uttering and publishing and forgery charges come from bad checks that were written. He could not disclose particular amounts, though he did say the investigation looked at the suspect's personal bank and credit card records for evidence of wrongdoing.

Legel said the suspect, whom officials say is in custody but decline to identify pending arraignment, will be extradited from Florida to Gaylord likely within 30 days following an extradition hearing. The suspect could waive their right to the hearing or appeal, in which case Gov. Jennifer Granholm would need to send a letter requesting extradition, according to Legel.

Candace Neff, Director of Communications for the Diocese of Gaylord, said Monday that Patterson had worked for the church for 2 1/2 years after being hired in 2005. Neff could not disclose Patterson's specific job duties or salary. Read a Q&A with Neff

The letter stated that after Patterson's departure the decision was made to have the diocese assume bookkeeping duties for the parish — an action which Neff said was "not because of any questionable activity but ... simply how the parish decided to move forward following the resignation."

In October, when budget reports were sent to school and department heads, "a staff member inquired about a line item expenditure which seemed unusual," the letter stated.

Neff said general funding for the parish and school staff, maintenance, supplies and programs comes from donations, tuition, fundraisers and event proceeds. She added the church has received $250,000 from the insurance company; full restitution, however, will be sought.

FitzGerald said the lengthy 10-month investigation was a result of the amount of money involved.

"These things take time, especially when you're dealing with this kind of money," he said, calling the case "another wake-up call."

"It does give us all a wake-up call again. It is unfortunate and sad that it got to this point. It can happen anywhere and we need to make sure we have people — not just one person — checking the books and safeguards in place," he said.

The diocese then contacted authorities and hired the auditing firm of Dennis, Gartland and Niergarth of Traverse City to conduct a forensic audit.

Legel predicts sentencing in this case could be similar to that of Sherrie Burns Schuster in July. Schuster is serving a minimum of 36 months for stealing $280,000 from the Gaylord Downtown Development Authority and the Michigan Downtown Authority, with which she was executive director and treasurer, respectively.


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