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Affidavit says woman stole to cover her casino losses

East Lyme - A gambling habit that left the former director of dining services for the East Lyme school system with more than $381,000 in losses led her to embezzle nearly that much from the company that runs the school meals program, according to court documents.

Beverly Howard, 53, of Westerly was arraigned Wednesday afternoon in New London Superior Court on a charge of first-degree larceny.

Howard allegedly embezzled $334,778.31 from the school lunch fund over three years while working as the dining services director. She was employed by Chartwells, a division of the Compass Group, the contracted food services management company for the school system. The company fired her around the time its auditors discovered the missing money in September.

The arrest warrant says the money was used to support a gambling loss that amounted to $381,406 over six years at Foxwoods Resort Casino and $536 at Mohegan Sun.

"I first began going twice or three times a year but began going more and more," Howard wrote in a statement to police, according to the affidavit. "When I would go to the casino, I would play the slot machines. I began to lose money, which was more than my finances would cover. I never used credit cards because I didn't want my husband to find out how much I had been gambling. I began looking for a way to cover my losses."

Howard, wearing a tan suit jacket and black pants, looked over at her husband and son when she was brought into the courtroom with her hands cuffed in front of her. She didn't address Judge Kevin P. McMahon, who set her bond at $100,000 and ordered her not to go near any casino or gaming facility and to continue with therapy.

According to the affidavit, the school lunch program is largely a cash operation; students pay for their food in cash. When the company eliminated its bookkeeper at East Lyme High School as "not cost effective," Howard said, she was put in charge of the money.

Chartwell employees were responsible for making all of the bank deposits into an account assigned to the school system. An annual audit of that account showed a $132,937 deficit in the school lunch fund at the end of the 2008 fiscal year.

Howard said she began taking cash out of the cafeteria revenues before making the daily deposits into the school lunch fund and creating false deposit logs to cover that up.

"In the beginning when I took cash, I would keep a running total of what I would take and try to replace it at a later date," she said in her statement. "If I ran out of money, I would write a check from my own checking account, then I would have to take money from the school on the following day to cover the check I wrote."

Compass Group officials originally thought the amount Howard embezzled was even higher, but discovered she made reimbursements in 2006-07 and 2007-08 that totaled about $35,000.

In July, the Board of Education renewed its contract with Chartwells for one year. It is in the middle of a 5-year contract that is renewable every year. The school system pays an annual operating fee to the company.

Dining service and cafeteria staff are employees of Chartwells. The school provides money for the kitchen equipment. If Chartwells runs a deficit at the end of the year, the school system does not have to make up the difference. If there is a profit, it's shared between the company and the school system.

Kevin Seery, the chairman of the Board of Education, said Chartwells management assured district officials that if it was determined that the district had lost money from the embezzlement, it would be reimbursed.

School officials could not provide details Wednesday on the contract or say how much revenue is collected into the lunch fund each year.

Salvatore Ritacco, a Pawcatuck attorney, and Hartford-based attorney Carmine Giuliano are representing Howard. They said those who know her have nothing but nice words to say about her.

"She's been cooperating with police from the very beginning," Giuliano said. "Obviously these are serious allegations. We'll see what happens."

Giuliano said Howard's family paid her bond Wednesday.

Howard's case was transferred to the upper level of Superior Court, where more serious crimes are tried. She is due back in court Dec. 2.

m.naughton@theday.com

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