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Accountant charged with stealing $729K from three towns

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Staff Writer
Saturday, September 19, 2020

HATFIELD — An independent contractor from Harvard who handled accounting services for both Hatfield and Hadley is alleged in an indictment from a statewide grand jury to have stolen more than $729,000 from three municipalities — but no money appears to have been taken from either Hampshire County community, according to town officials.

In July, Justin Cole, who ran Baystate Municipal Accounting Group Inc., was indicted on charges resulting from a joint investigation by the Massachusetts Office of the Inspector General and the Massachusetts Attorney General’s Office. He is scheduled to be arraigned in Worcester Superior Court on Sept. 18.

The indictment charges Cole with five counts of larceny over $250, two counts of larceny over $1,200, four counts of false claims, four counts of securing an unwarranted privilege, and one count of unlawful financial interest of a municipal employee for stealing $657,335 from Uxbridge, $24,597 from Monterey, and $47,600 from Millville, between 2012 and 2017.

Hatfield Select Board Chairwoman Diana Szynal read a statement at Tuesday’s board meeting saying that internal controls in place at Town Hall prevented any loss of money. In addition, a forensic audit was completed and there was no report of any unusual activity, she said.

“At this time we are confident that Mr. Cole did not improperly access any funds from the town of Hatfield,” Szynal said.

Hatfield had used Baystate since early 2018, after an audit in 2017 cited concerns with the town’s financial practices. Those practices caused the tax bills due Feb. 1 and May 1, 2018 to be sent out late and a special Town Meeting to be called to plug a $315,000 deficit so the town’s financial books could be brought into compliance with state Department of Revenue requirements.

In Hadley, Town Administrator David Nixon said officials became aware of possible improprieties in May 2019 and immediately began looking for any signs of irregularities, double-checking vendor warrants, undertaking an exhaustive review of town finances, doing independent audits and reviewing specific vendors.

“We found no evidence of any money going missing or any indication of any improper use of money,” Nixon said.

Nixon said the town’s AAA bond rating and many layers of review by the Select Board, Finance Committee and municipal staff help to prevent issues. Baystate was the accountant for Hadley beginning in fall 2015.

Both Hatfield and Hadley had to find new accountants after Cole informed the communities in a letter last October that his business would be closing due to the need to “focus on my health, and my family.”

According to the complaint from the state attorney general’s office, Cole, from 2012 to 2017, while employed as Uxbridge’s town accountant, stole town funds by submitting and approving dozens of false invoices and related submissions that caused the town to pay for services not provided. In July 2017, Cole allegedly continued to defraud other municipalities through his company by fraudulent billing and misleading officials about municipal loan applications.